Qualified Remodeler Magazine

MAY 2019

Qualified Remodeler helps independent remodeling firms to survive, become more professional and more profitable by providing must-have business information, namely best business practices, new product information and timely design ideas.

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DURING THE RECESSION of 2008, some ex- perienced remodelers reacted much sooner than others with less experience. They did this because they had previously experienced Ė ĨĤƁĚģĞģĜ ĢĖħĠĚĩĥġĖĘĚ ĩĝĚĮ ĝĖę ġĞīĚę ĩĝħĤĪĜĝĥĖĨĩħĚĘĚĨĨĞĤģĨ These remodelers used what they had ġĚĖħģĚęĞģĩĝĚĥĖĨĩĩĤĢĞĩĞĜĖĩĚĢĖģĮĤěĩĝĚ ĥĤĩĚģĩĞĖġģĚĜĖĩĞīĚĚŻĚĘĩĨĩĝĖĩĨĖģĠĤĩĝĚħħĚ- ĢĤęĚġĞģĜėĪĨĞģĚĨĨĤĬģĚħĨĄĩĤĤĝĖīĚėĚĚģ ĩĝħĤĪĜĝĢĖģĮĚĘĤģĤĢĞĘĨĬĞģĜĨęĪħĞģĜĢĮ ĘĖħĚĚħĖĨĖħĚĢĤęĚġĚħĖģęĖĨĖħĚĢĤęĚġĞģĜ ėĪĨĞģĚĨĨĘĤĖĘĝďĝĚĨĚĚĭĥĚħĞĚģĘĚĨĖġĩĝĤĪĜĝ not fun, provided many lessons learned. ÿĚĥĚģęĞģĜĤģĮĤĪħėĪĨĞģĚĨĨĢĤęĚġĢĖħ- ĠĚĩġĤĘĖĩĞĤģĖģęĝĤĬėĖęĩĝĚģĚĭĩħĚĘĚĨĨĞĤģ ĜĚĩĨĩĝĚħĚĘĤĪġęėĚĢĖģĮĥĤĩĚģĩĞĖġĢĞĨĩĖĠĚĨ ăĤĬĚīĚħ ĩĝĚ ėĞĜĜĚĨĩ ĢĞĨĩĖĠĚ ĢĞĜĝĩ ėĚ ĩĤ ĞĜģĤħĚĩĝĚĢĖģęĩĝĚĞħĥĤĩĚģĩĞĖġĞĢĥĖĘĩĨĤģ ĮĤĪħėĪĨĞģĚĨĨċġĪĨĬĝĮĜĤĩĤĩĝĚġĪĢėĚħ- ĮĖħę ĨĘĝĤĤġ Ĥě ĝĖħę ĠģĤĘĠĨ ĬĝĚģ ĮĤĪ ĘĖģ learn from the experiences of others? Here ĞĨĖĨĝĤħĩġĞĨĩĤěĘĤĨĩġĮĢĞĨĩĖĠĚĨĮĤĪĘĤĪġę ĢĖĠĚęĪħĞģĜĩĝĚĘĪħħĚģĩėĤĤĢĖĨĬĚġġĖĨ ĩĝĚĚīĚģĩĪĖġėĪĨĩĩĝĖĩĬĤĪġęġĞĠĚġĮěĤġġĤĬĞĩ No. 1: Growth Plans Without a Plan B ĄĝĖīĚĨĚĚģĢĖģĮĨĢĖġġĖģęġĖħĜĚħĚĢĤęĚġĚħĨ ĖģęĚīĚģģĖĩĞĤģĖġġĮěħĖģĘĝĞĨĚęħĚĢĤęĚġĞģĜ ĘĤĢĥĖģĞĚĨěĖĞġĬĝĚģĩĝĚħĚĢĤęĚġĞģĜĚĘĤģ- ĤĢĮĘħĖĨĝĚĨďĝĚĤģĚĩĝĞģĜĄěĤĪģęĩĝĚĮĖġġ ĝĖęĞģĘĤĢĢĤģĬĖĨĩĝĖĩĖġĩĝĤĪĜĝĩĝĚĮĝĖę ĖĢėĞĩĞĤĪĨ Ėģę ĚīĚģ ĬĚġġÇĩĝĤĪĜĝĩ ĜħĤĬĩĝ plans, they had no plans ready for when ĬĝĖĩĩĝĚĮĩĝĤĪĜĝĩĬĖĨģĤħĢĖġĬĚģĩĖĬĖĮ ÿĤģšĩ ĢĖĠĚ ĩĝĞĨ ĢĞĨĩĖĠĚÉĖġĬĖĮĨ ĝĖīĚ a Plan B for what you will do when the old ģĤħĢĖġĞĨħĚĥġĖĘĚęĬĞĩĝĖģĚĬģĤħĢĖġĄĨĖĮ ĞĩĩĝĞĨĬĖĮĤģĥĪħĥĤĨĚüĨĤƁĚģĚęĚĘĤģĤĢĮ ĢĖĮėĚĘĤĢĚĩĝĚģĚĬģĤħĢĖġďĝĞģĜĨĢĖĮ ĖģęęĤĘĤĢĚėĖĘĠėĪĩĞĩšĨĖęĞŻĚħĚģĩģĚĬ ģĤħĢĖġ ĬĝĚģ Ğĩ ęĤĚĨÉģĚīĚħ ĩĝĚ Ĥġę ĤģĚ you had assumed would last forever. On the ĥĤĨĞĩĞīĚĨĞęĚĚĘĤģĤĢĞĘħĚĘĤīĚħĞĚĨėħĞģĜģĚĬ ĤĥĥĤħĩĪģĞĩĞĚĨĬĞĩĝĩĝĚĢĄěĮĤĪĝĖīĚĖċġĖģ B ready for the downturn, you can watch for and focus on your next opportunity. No. 2: Adding Overhead You Might Not Be Able to Liquidate or Aord ĒĝĚģ ėĪĨĞģĚĨĨ ĞĨ ĜĤĤę Ėģę ĘĖĨĝ ĞĨ ƀĪĨĝ remodelers tend to increase overhead and assets. They move to an out-of-the-home of- ŽĘĚĤħĪĥĜħĖęĚĩĤĖġĖħĜĚħĨĥĖĘĚďĝĚĮĖęę ĚĦĪĞĥĢĚģĩĖģęīĚĝĞĘġĚĨĖģęĩĖĠĚĤģġĚĖĨĚĨ and loan payments for some, as well as other ħĚġĖĩĚęĚĭĥĚģĨĚĨġĞĠĚĞģĨĪħĖģĘĚħĚĜĞĨĩħĖĩĞĤģ ěĪĚġĖģęĤģĜĤĞģĜĢĖĞģĩĚģĖģĘĚ Potentially worse, some business owners ĪĨĚħĚĨĚħīĚěĪģęĨĖģęÌĤħĬĝĖĩĩĝĚĮĤƁĚģ- ĩĞĢĚĨěĖġĨĚġĮĖĨĨĪĢĚĩĤėĚĥħĤŽĩĨĩĤĥĖĮĘĖĨĝ ěĤħĩĝĚĨĚĖĨĨĚĩĨĒĝĚģĩĝĚĚĘĤģĤĢĮĩĖģĠĨ ĖģęĩĝĚĢĤģĚĮĘĤĢĞģĜĞģĨġĤĬĨęĤĬģĩĝĚĨĚ ħĚĢĤęĚġĚħĨėĚĘĤĢĚĘĝĖġġĚģĜĚęĩĤĠĚĚĥĥĖĮ- ĞģĜěĤħĩĝĚĨĚĩĝĞģĜĨ Ąě ĮĤĪ ĝĖīĚ Ė ġĤģĜÇĩĚħĢ ġĚĖĨĚ ěĤħ ĮĤĪħ ĤƄĘĚĮĤĪĢĖĮģĤĩėĚĖėġĚĩĤĜĚĩĤĪĩĤěĞĩĄě ĮĤĪĝĖīĚĖƀĚĚĩĤěģĚĬĚħīĚĝĞĘġĚĨĤħĚĦĪĞĥ- ĢĚģĩ ĨĚġġĞģĜ ĩĝĚĢ Ĥģ þħĖĞĜĨġĞĨĩ ĩĤ ĘħĚĖĩĚ ĘĖĨĝĢĞĜĝĩĢĚĖģĩĝĖĩĮĤĪħĨĚġġĞģĜĥħĞĘĚĢĖĮ not be adequate to settle with your creditors. Even if your landlord lets you out of your lease at that new showroom you just created, ĮĤĪĬĞġġĢĤĨĩġĞĠĚġĮėĚġĚĖīĞģĜĢĪĘĝĤěĮĤĪħ new showroom investment to your landlord. No. 3: Forgetting About Marketing as well as Marketing to Past Customers ĒĝĚģĩĝĚĚĘĤģĤĢĮĞĨĜĤĤęĢĖģĮħĚĢĤęĚġ- ĚħĨĨġĤĬĤħĚīĚģĨĩĤĥĩĝĚĞħĢĖħĠĚĩĞģĜĞģīĚĨĩ- ĢĚģĩĨďĝĚĞħĩĝĞģĠĞģĜĞĨĒĝĮĨĥĚģęĢĤģĚĮ ěĤħĢĤħĚġĚĖęĨĬĝĚģĄĖĢĖġħĚĖęĮĩĪħģĞģĜ ĖĬĖĮĬĤħĠĄĘĖģģĤĩĥħĤęĪĘĚBig mistake. ĔĚĨĥĚħĝĖĥĨĮĤĪĘĖģĨġĤĬęĤĬģġĚĖęĜĚģ- ĚħĖĩĞĤģĖģęĨĥĚģęĞģĜėĪĩĢĖħĠĚĩĞģĜĨĝĤĪġę ĨĩĞġġĝĖĥĥĚģĆĚĚĥĞģīĚĨĩĞģĜĞģęĞŻĚħĚģĩĞĖĩĞģĜ your business from all of the commodity con- ĩħĖĘĩĤħĨĤĪĩĩĝĚħĚħĞęĞģĜĝĞĜĝĤģĩĝĚĚĘĤģĤĢĮ ĬĝĞġĚĢĞĨĩĖĠĚģġĮĜĪĩĩĞģĜĩĝĚĞħĢĖħĠĚĩĞģĜ ĄěĮĤĪħŽħĢĞĨĬĚġġĠģĤĬģĞģĮĤĪħĢĖħ- ĠĚĩĥġĖĘĚĚĨĥĚĘĞĖġġĮěĤħĖĥĖħĩĞĘĪġĖħĚĭĥĚħ- ĩĞĨĚĥĤĩĚģĩĞĖġĘĪĨĩĤĢĚħĨĬĖģĩĚīĚģęĪħĞģĜĖ ħĚĘĚĨĨĞĤģĮĤĪĖħĚġĞĠĚġĮĩĤėĚĩĝĚĘĤĢĥĖģĮ of choice, even if your competition hasn't ęĞŻĚħĚģĩĞĖĩĚęĩĝĚĢĨĚġīĚĨġĞĠĚĮĤĪęĞę ÿĤģšĩěĤħĜĚĩĩĤĠĚĚĥĢĖħĠĚĩĞģĜĩĤĮĤĪħ past customers so they are aware of the full ėħĚĖęĩĝĤěĩĝĚĬĤħĠĩĮĥĚĨĮĤĪĘĖģęĤĊģĚĤě ĩĝĚĬĤħĨĩĩĝĞģĜĨĖħĚĢĤęĚġĚħĘĖģĝĚĖħěħĤĢ ĖĥĖĨĩĘĪĨĩĤĢĚħęĪħĞģĜĖħĚĘĚĨĨĞĤģĞĨţĒĚ ęĞęģšĩĠģĤĬ ĮĤĪęĞęĩĝĖĩ Ť No. 4: Selling a Backlog Without Considering Rising Costs/Expenses ĒĝĚģĩĝĚĚĘĤģĤĢĮĞĨĝĪĢĢĞģĜĩĝĚħĚĞĨĤě- ĩĚģĤĥĥĤħĩĪģĞĩĮěĤħħĚĢĤęĚġĚħĨĩĤĨĚġġĖėĞĜ ėĖĘĠġĤĜĤěĬĤħĠĄĜĚĩĞĩüĜĤĤęėĖĘĠġĤĜĘĖģ provide a level of comfort for a busy business ĤĬģĚħþĤģīĚħĨĚġĮĖġĖħĜĚėĖĘĠġĤĜĘĖģĖġĨĤ ėĚęĖģĜĚħĤĪĨĬĝĚĩĝĚħĖħĚĘĚĨĨĞĤģĨĝĤĬĨĪĥ ĤħĩĝĚĚĘĤģĤĢĮĠĚĚĥĨĝĪĢĢĞģĜĄěĮĤĪĨĚġġ ĩĝĖĩėĖĘĠġĤĜĖĩĖŽĭĚęĘĤĨĩĖģęĩĝĚģĘĤĨĩĨĜĤ ĪĥĮĤĪĘĤĪġęĝĖīĚĖėĪģĘĝĤěĬĤħĠĩĝĖĩĝĖĨ already lost money even before you start it. ĊģĚĤĥĩĞĤģĘĤĪġęėĚĨĥĚĖĠĞģĜĬĞĩĝĮĤĪħ ĖĩĩĤħģĚĮěĤħĝĚġĥęĚīĚġĤĥĞģĜĖĘĤĨĩÇĚĨĘĖġĖ- ĩĞĤģĘġĖĪĨĚěĤħĮĤĪħĘĤģĩħĖĘĩüģĤĩĝĚħĢĞĜĝĩ ėĚ ĩĤ ĠĚĚĥ ĮĤĪħ ėĖĘĠġĤĜ ęĤĬģ Ą Žģę ĩĝĖĩ full-service remodelers who follow a strate- ĜĞĘĢĖħĠĚĩĞģĜĥġĖģĘĤģĨĞĨĩĚģĩġĮĜĚĩĖĨĩĚĖęĮ ƀĤĬĤěĦĪĖġĞĩĮġĚĖęĨāĤħĩĝĚĨĚħĚĢĤęĚġĚħĨ Ė ĨĞĭÇ ĩĤ ĚĞĜĝĩÇĬĚĚĠ ėĖĘĠġĤĜ ĘĖģ ėĚ ĢĖĞģ- ĩĖĞģĚęėĮħĖĞĨĞģĜĥħĞĘĚĨĬĝĞġĚĩĝĚĚĘĤģĤĢĮ ĖģęħĚĢĤęĚġĞģĜĨĖġĚĨĖħĚĨĩħĤģĜ ĎĪĘĝ Ė ĨĩħĖĩĚĜĮ ģĤĩ ĤģġĮ ĥħĤĩĚĘĩĨ ĮĤĪħ ėĪĨĞģĚĨĨěħĤĢĘĤĨĩĞģĘħĚĖĨĚĨĞĩĘĖģĝĚġĥĜĚģ- ĚħĖĩĚĢĪĘĝĝĞĜĝĚħĥħĤŽĩĨĄěĮĤĪħėĪĨĞģĚĨĨĞĨ the only one still viable because all the other ħĚĢĤęĚġĚħĨěĚĖĨĩĚęĤģġĤĬĚħĢĖħĜĞģĨĮĤĪ ĘĖģĖĨĠěĤħĖģęĤƁĚģĜĚĩĝĞĜĝĚħĥħĞĘĚĨ by Shawn McCadden, CR, CLC, CAPS Costly Mistakes During an Economic Boom McCadden is a speaker, business trainer, columnist and award-winning remodeler with more than 35 years of experience. He can be reached at shawnmccadden.com. UPCOMING TOPICS JUNE: How Competent Are You as Owner? JULY: Finance System Success Is on You AUGUST: Are You Excellent at Mediocre? ON YOUR BUSINESS 16 May 2019 QualifiedRemodeler.com

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