In response to my Baltimore talk “The Dollar Based Business” I was asked a very good question that I wanted to share here. A remodeler approached me and asked what should be done if something is accidentally missed during the estimate. How do we account for the omission? Well, if we miss something on the estimate, what we do about it depends on when we catch the missed item:

PRE-SALE: All projects/estimates are reviewed before they are sold. If a missed item is caught at this stage, we put it back in the estimate/price

POST SALE/BUT EARLY IN PROJECT: We do pre-construction walkthroughs and other “early project” steps to ensure the project starts off on the right foot. If we catch something at this stage, we look holistically at the project to see how we can make up for it – in other areas, sub vs. in-house labor, etc, etc. But we do not go back to the client unless it is something that we could not have known about (i.e. stack running where medicine cabinet was going to be recessed, etc.). We have a “concealed condition” clause in our contract that allows us to charge for such items.

END OF PROJECT: This is on us – at this point we have missed all the gates pre-sale and early in the project….so we have to use it as a “learning experience” to ensure we don’t do it again.

Hope this helps and good hunting!

One of the best decisions a business can make is to diversify. One of the worst decisions a business can make is to diversity. Knowing when to stay on the highway or get off on the side road is generally where genius occurs (or luck). If you share you diversification idea, I will give you the “good bad and ugly” of your idea. Needless to say you should make your own decision but please make it in an intelligent / thoughtful manner. I have seen more business go out of business due to bad diversification decisions than the reverse. So what are you thinking about?

I just did a Google search for kitchens and received the following results:

Results 1 – 10 of about 32,800,000 for kitchens

Let’s face it; it’s become increasingly difficult to generate qualified leads in today’s tough economy. With over 32 million results, how can we possibly appear on page one? As you slowly start reviewing the results you quickly discover that there are many companies battling over the word “kitchens”. Sure there are some remodelers like us, but most are manufacturers of building products for kitchens such as a variety of countertop manufacturers and fabricators, cabinet companies (stock, semi-custom and custom), lighting fixtures, sinks, faucets, flooring, etc.

That’s where partnering with others comes in. I’m a firm believer in strategic alliances. It’s even more important today than ever. Although there are many standard co-op programs available from industry manufacturers many of those may not fit your needs.

We’ve approached strategic alliances very differently than the standard program approach. We simply contact the potential alliance and schedule a face-to-face meeting. The goal of the meeting is an honest and open discussion to understand each other’s goals. It’s interesting what comes out of these discussions.

Usually manufacturers say that their goal is simple -we want to sell more product. Remodelers on the other hand expect a great product offering along with price and service. Interestingly, many times both of those goals are accomplished along with extra things that help remodelers tremendously such as:

o       Product literature to help describe features and benefits

o       Samples to share with potential clients

o       Product knowledge seminars and installation trainings

o       Cooperative advertising both traditional as well as on-line

o       Reciprocating links on websites

All of these lead to accomplishing both goals. It can be done, all it takes is starting out with an open and honest conversation about what’s important to each party.

For those that attended the seminar in Baltimore (or any of my seminars over the years) you know that I have a real interest I using analogies or metaphors as a way to understand or communicate business concepts. The fitness seminars takes the notion that we have a pretty clear understanding of what it means to be personally healthy and fit. By drawing off these comparisons, we begin to realize that business fitness (like our bodies) are many faceted and finding the proper balance is the ultimate goal. What other metaphors or analogies help you to understand your business? What other metaphors help you to communicate to your team or your clients? It was said that “a picture is worth a thousand words…and a metaphor is worth a thousand pictures” Share these gems and we all will gain insights in an otherwise complex world.