The Making of a Small-Business Owner

April 16, 2006
Home Performance Special Issue 2006
A version of this article appears in the Home Performance Special Issue 2006 issue of Home Energy Magazine.
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        Running a successful remodeling company is an ongoing challenge. It can start when you walk into your office on Monday morning.You receive a call from one of your carpenters at 7am, letting you know that he won’t be showing up to work that day. Soon after that, the client calls, asking where everyone is. On short notice, you pull a carpenter off another project and send him to the job site where you need help. You then discover that the lead carpenter didn’t order the materials due on the job site that day, and you’re back, in your office, scrambling to put out a fresh set of fires. Is this just another day at the office?
        For many remodelers, this scenario is practically an everyday occurrence. The result is that most remodelers work too hard. Many small-business owners regularly work over 60 hours a week. But working 60, 70, and even 80 hours a week comes at a cost. There is a cost to the company, a cost to the owner’s health and well-being, and a cost to the owner’s family.
        There is a way out of this dilemma, but it will require that you, as a business owner, begin to move from an operational role in your company, to a strategic role. In other words, you will need to move away from working in your business, and begin working on your business. To begin to work on your business, you need to step back and reevaluate your priorities for what you are doing on a day-to-day basis.

Reengineer Your Business


        If you are the owner/president, you have a strategic role in your company, and you are working on where the company is going. If you have an operational role in your company, you are involved with producing what the company has to sell. Marketing, sales, administration, and production are all operational tasks within a business. In the operational role, you are involved in the day-to-day operations that keep your company in business. If you, as the owner, are involved with several different operational roles on a weekly basis, how much time do you have left to work on your business? Who is making the critical business decisions that determine the health and direction of the company? It should be you.
        First, you’ve got to identify what you do best. You can’t be all things to all people, and neither can your company. What do you sell? What services do you offer? To narrow down your answers, ask yourself some questions. What were your three most profitable projects last year? Can you describe your typical customer? What are the reasons why a typical customer seeks your products or services? What are the major benefits of using your products or services from the customer’s point of view? What is your competitive advantage? Price? Quality? Service? All three? Is the service you provide unique in some way? How can I expand my services to include home performance contracting? Is your ability, or are your staff ’s abilities unique in some way? What characteristics do you look for in employees who work with you?
        In answering these questions, you are identifying the best characteristics of your company now. Next, think back over the last five years and list three major business mistakes you have made. Now focus on what you do best and most efficiently and effectively. Make the strategic decision to move away from projects that require too much work and whose profit margin is too low.
         Then list three things you would like to accomplish in the next year. If moving into home performance contracting is one of them, how exactly are you going to do that? Perhaps you want to start by offering energy audits with each job you do. Who will be responsible for doing what? Will you need more people to achieve your goals? Are new positions involved? Can you develop an organizational chart that identifies the operational roles within your reengineered company?
         In asking these questions, I’ve learned that people often don’t know what the new demands on their organization will be. It’s not anyone’s fault; it’s because most owners have little experience with reengineering a business. They’re not sure what all the new roles will be, or where to find a model to follow. Just as you can’t build without a good set of plans and specifications, you can’t build a solid organization without a good organizational model.
         Fortunately, finding an appropriate organizational model to follow has been greatly simplified with the publication of this Home Energy issue. While reading these articles, ask yourself who can I copy? After many years in business, I have learned that no matter what you want to do, no matter what business you’re working in, whatever you are doing, someone has been there before you. Become aware of the resources that may exist now in your area. I’m a member of the National Association of the Remodeling Industry (NARI) in the metropolitan Washington,DC, area, and that association has over 300 members. I’ve discovered that remodelers, at least in our area, are very generous with their time. And they are very willing to share their knowledge and their experience. If you’re a member of NARI, or the Remodelers Council (the remodeling arm of the National Association of Home Builders), or any good builders association, you may have the resources you’re looking for close at hand.
        Home performance contractors are similarly generous with their time and experience. Go to successful contractors and ask them about their organization. Find someone whose firm is the size you want your firm to be and ask that person about the different roles in his or her company. This kind of networking may be most easily accomplished at conferences.ACI hosts both a national and several regional conferences each year; these conferences attract hundreds of home performance contractors.
        Although not directly related to home performance contracting, the Remodelers Advantage Roundtables (www.RemodelersAdvantage.com) may be another useful resource.This is a peer review organization, where members meet to analyze and evaluate each other’s companies. The individual groups are made up of members who are not competing with each other in local markets, but who get together every six months and act as an informal board of directors where members share what they do best, and offer each other assistance. This group would also provide models of companies who are running successful businesses. Additional peer review groups are Business Networks and the Remodelers 20 Club.

You’ve Arrived at the Beginning

         With the help and direction of other professionals, you will be in position to define what your organization will look like, and to begin to document these roles in the form of an organizational chart.You next task is to staff your new company with the people best suited for each role in your new organization. You have laid the foundation for a successful home performance contracting business. You just need to fill in the blanks. Now you’re acting like a business owner.
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