How Long Do “Things” Last?

So . . . how long should a brand new refrigerator last? When a client asks how long your proposed new flooring will last, what do you say? When you are quizzed about electrical issues, how do you respond? You could say, “Look, why don’t you ask an electrician,” and risk insulting the client, or you might reply with, “Copper plated wiring, copper clad aluminum, and bare copper wiring are expected to last a lifetime. Electrical accessories and lighting controls are expected to last about 10 years.” That’s taken verbatim from the report . . .

In an NAHB study conducted in February this year (2007), they published a report titled Life Expectancy of Home Components. In that report, sponsored by Bank of America Home Equity, they published an unblinking collection of data every remodeler and home builder can use when answering tough questions from prospects. Having answers to these questions would, without question, differentiate a savvy, well-informed contractor from the run of the mill, unlicensed, door slammers competing for the same construction dollars.

Working with an informed client is always better than working for one who is second guessing you at every corner. Clients aren’t born with the knowledge they need to interact competently with you, and like the old saying goes, they don’t know what they don’t know. In fact they normally think they know a heck of a lot more than they actually do. It therefore falls within your realm to, in the process of setting expectations, educate them. Keeping up to date and well-informed yourself is, without question, the sanest path a contractor can take.

There are many reasons to belong to the National Association of Home Builders (NAHB), but if ever there was a single compelling reason to belong, it would be for the unfettered access to their research. To have access to this information is worth the price of membership alone.

The knowledge that we consider knowledge proves itself in action. What we now mean by knowledge is information in action, information focused on results. –Peter F. Drucker

One for the books . . .

NAHB recently predicted that an increasing number of couples are opting to sleep apart . . . well . . . I’m not so sure this is an idea whose time has come . . . at least not in my house.

The NAHB, National Association of Home Builders, recently reported that by year 2015, 60% of custom-built homes will contain two . . . separate, but equal . . . master suites. Others will opt for “special” sleeping nooks off a central master suite.

This has nothing to do with what two consenting adults may, or may not do in the privacy of thier bedroom, but actually has more to do with snoring, as well as the the need for late night emails and early trips to the gym.

So . . . why would I make mention of this? Next time you’re sitting with a client for a new home or preparing to add a spiffy master suite and you need an edge to make the sale, keep this mind. Tactfully handled. this subject might prove you a forward and innovative thinker . . . just the kind of contractor an upwardly mobile couple would want to take on thier next project.

Business Plan II

On January 3rd (2008) I identified the two basic reasons for a business plan; create a map of your business, and preparing for a loan. In that post I briefly discussed the steps to create a business plan ending with keep it simple and well edited. Then I ended with the link to Microsoft’s business start-up kit. Today I’m going to return to return to the business success diagram from January 2nd, and continue the business plan discussion. In this post I’m going to identify and briefly discuss the remaining six reasons to create and follow a business plan.

Analysis – By analyzing the previous year’s plan, a contractor can easily and quickly see if he’s making headway, losing headway, and merely mired somewhere in the middle. Analysis of the previous year’s financial projections against the actual end-of-year results says it all.

Setting Goals – Setting business (and personal) goals is the contractor’s New Year’s Resolution. Goals should realistic and attainable, they should be specific and performance, not outcome related. Guidelines for setting goals:

  • Express as a positive statement
  • Measurable (include dates)
  • Prioritized by importance
  • Written (hold your own feet to the fire!)
  • Immediate, small and achievable

Prioritize Opportunities and Acknowledge Threats – Perform a SWOT (Strengths, Weaknesses, Opportunities, and Threats) Analysis and develop a separate strategy to deal with each.

Review and Set Budgets – Setting budgets for an upcoming year involves an in-depth review of your last year’s financial successes and failures. Ask your CPA to sit with you and point out the incidentals you may miss in your own analysis . . . you pay him/her for their financial expertise, not just for your taxes at the end of the year.

Reorganize Responsibly – Based on your financial and SWOT analysis identify and reorganize your responsibilities to your clients, employees, trade partners, and yourself.

Establish an “Action Plan” – Do you need more and better marketing? Is it time for an influx in capital for growth? Is your mark-up adequate to maintain profit margins? Are your trade partners and vendors contributing to your success? With these and other conclusions create a plan to make all the elements of your business click.