Qualified Remodeler Magazine

FEB 2017

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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businesses can severely affect profitability. (Email admin@daveyoho.com and request a FREE copy of The True Cost of a Mis-Hire.) The job of a recruiter starts with defining what you want the hired party to do—then creating an ad or job posting to gain inqui- ries. Next, use a script to perform telephone interviews. The job of a recruiter is like that of a salesperson. There has to be a system clearly defined and used to create a telephone interview. When you sell the job by effectively asking questions, you will more clearly de- fine the skills of the applicant. The goal is to get them to want an interview. Successful recruiters also conserve time and money (which transmits to bottom line profits). They use an electronically generat- ed "profile," which enables them to create a more effective interview and determine A) Can the applicant do the job? B) Will they do the job? C) Do they fit the organi- zation and the business model? These instruments enable a recruiter to challenge someone during an interview, i.e., "Convince us you are the right person for this position" versus "We like your back- ground; let's give it a try." Unfortunately, the less you know about professional in- terviewing and the use of instruments, the chances are you will experience abundant mis-hires and dramatic turnover. We've been using profiles for over 40 years and have found that with proper use they save time, vastly improve the amount of informa- tion gained about the applicant, and reduce turnover. I will be happy to email you a com- pleted profile without charge. (Email admin@ daveyoho.com with subject, "PROFILE".) On the subject of "no shows" after phone interviews: Ten years ago, industry earn 15 percent or more. A full-line remod- eling company's goal should be 7 percent pretax net. The better-run remodelers may exceed this. Review without cost or obligation a recent webinar featuring one of the most successful home improvement companies in the U.S. on the subject of Pricing & Profitability for 2017—screencast.com/t/Ss5lw9skY9bn. By David Alan Yoho, Senior Account Executive, Dave Yoho Associates In 2017, your profitability will improve if you hire the right people— and keep them. Recruiting, hiring, train- ing and keeping person- nel is a key profitability issue. The cost of ad- vertising for and then phone interviewing applicants who are hired is expensive. It is seldom identified as a separate item on an operating statement. In the case of salespeo- ple, add in costly time spent training. Then examine the number of leads issued to the new hire and the cost to you. We recently completed a survey and white paper on The True Cost of a Mis-Hire. It made us more aware of how hiring and training for small THE owners of home improvement companies are entrepreneurs who invest time, energy and capital. They also invest in bringing new products to market while facing vast competition, over-burden- some government regulations, hiring and training new personnel and rising admin- istrative costs. If they are lucky, they get sufficient contracts to offset their overhead, complete the work, deal with uncooperative weather and overcome mistakes, which might otherwise put the business in peril. The fact is that even some of the best-run companies in the business do not make the net profit to which they are entitled by virtue of the investment in time, energy and the risks involved. Do most home improvement companies make sufficient profit to offset the risks, in- crease the capital in the business and reward management for the effort and risk involved? Let's be clear, gross profit is an account- ing term describing the difference between your direct costs and your selling price. It is subject to the cost of marketing and sales, plus administrative expenses. What's left is net profit, that which you've earned before paying taxes (pretax net). If yours is a specialty home improvement company (siding, windows, roofing, bath refit- ting, etc.) a 10 percent pretax profit should be a minimum. The better run companies exceed this. Exceptional companies often Running a Profitable (or More Profitable) Home Improvement Business in 2017 By Dave Yoho, President, Dave Yoho Associates Home improvement is a $300 billion industry. It is a cornerstone of the U.S. economy. Its growth is stimulated by consumer confidence and the goal of fulfilling the American dream (homeownership). 44 SPECIAL SECTION: HOME IMPROVEMENT PRO | Februar y 2017 QR QualifiedRemodeler.com

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