To learn more about this topic, Michigan Builders License, and 4 Level Coach are partnering to bring you a free webinar called 10 Reasons Why Builders and Remodelers Fail to Grow, on August 22, 2023, at 2 pm.
Success in the home building and remodeling business isn't just about being good at construction. It actually depends on some important principles. If you ignore these principles, they can hold your company back like obstacles. Feeling stuck in a repetitive cycle is common in this industry. But why does this cycle keep happening? Well, there are ten main reasons for it. These reasons decide whether you're just working within your business (Level 1), managing a small operation (Level 2), growing to a larger (Level 3), or even a sellable business (Level 4).
A lot of builders and remodelers tend to stay in Levels 1 and 2. While these levels are okay for earning a living, they usually don't bring the kind of success or freedom that business owners want. At 4 Level, our goal is to help home builders and remodelers move past Levels 1 and 2, and reach Levels 3 and 4. How can this growth happen? It's about dealing with and mastering the ten reasons we talked about earlier. Until you do that, achieving big growth will always seem far away. So, let's take a closer look at these reasons and figure out the steps to move beyond just having a job in your business.
1. Lack of a Clear Vision
Clear vision is critical in driving success and progress in any venture. It is repeated in many talks and books for a reason. At its core, having a vision serves as a road map. Without it, we are like travelers on a road trip without a set destination, resulting in a lack of purpose and direction. This analogy rings particularly true for businesses; without a specific vision, daily operations lack relevance, leading to a feeling of stagnancy.
A vital piece of this vision is defining a niche. It allows us to identify our unique role in the marketplace and cater to that area, minimizing distractions from unrelated tasks. When a business firmly positions itself within a defined niche, it gains recognition and can develop a forward plan for the next three to five years. Plus, a transparent vision guarantees team engagement; everyone can align with the mission and contribute meaningfully. All of this combined is a blueprint for success.
2. Lack of Business Savvy
Business savvy ranks as the second critical factor in achieving business success. At the heart of being business savvy lies the essence of entrepreneurial leadership, which centers on empowerment. It's about inspiring team members to exceed their perceived potential and encouraging an environment where momentum builds organically.
Strategic thinking is an integral component of this savvy approach, which only becomes relevant when aligned with a clear vision. When equipped with clarity and knowledge of their direction, leaders can make bold decisions, sidestepping the mediocre "status quo" for ambitious targets.
As businesses keep pushing forward, aiming for those impressive Level 3 and 4 milestones, it's clear that having a solid grasp of business smarts is essential. Hitting these levels goes hand in hand with a deep understanding of how businesses work. The journey of growth doesn't just move the business ahead; it also helps you grow as a person, shaping you into a polished leader and a go-getter.
3. Lack of Financial Mastery
Picture building a business like building a solid foundation for a house. One essential block of that foundation is "Financial Mastery," which is knowing how money works in business. It's like speaking the language of business, which is all about numbers and percentages. If we don't get this, it's like trying to run a business in a language we don't understand. And that makes it hard to make smart decisions and move forward. Not having this knowledge means we stay stuck and can't reach the next level of growing our business to be even bigger or sellable.
Think of it this way, just like a pilot needs to understand the instruments in the cockpit, business owners need to understand the financial indicators. You wouldn't want a pilot who doesn't know what their dashboard is showing, right? Similarly, for your business, it's not just about knowing the basics – it's also about being smart with money. This means using money wisely to grow the business, build great teams, and take your business to amazing heights.
So, Financial Mastery isn't just about numbers. It's about understanding things in a way that helps us make good choices and grow smartly. We have a winning combo for supercharging our business when we put together a clear plan, business smarts, and an understanding of how money works. If we're missing even one of these pieces, especially the money know-how, it's like a big obstacle we need to overcome to make our business truly succeed.
4. Lack of Pricing Mastery
One big challenge in growing a business is not knowing how to set prices correctly. It's like when we need to figure out how much to charge, and we copy what others charge or set prices that don't cover our costs. But this way of pricing usually means we're not making enough money, which stops our business from growing. We have a saying: make sure you're making a profit before you focus on growing, or you're just getting bigger without making much cash. So, we need to get a handle on pricing to make sure our business is healthy, and we can invest more in our team.
Two main things make up Pricing Mastery. First, it's about understanding something called the "break-even percentage." Don't worry; it's not too complicated. It's just about thinking about percentages, which helps us make smart choices and more money. Knowing these percentages, like how much money we make after covering costs, guides how we can grow.
Next, we can compare our estimates with what actually happens. Sometimes we get so busy that we forget to do this. But it's like driving a car with money falling out of the window! Looking at how our estimates match the actual costs helps us determine where our money is going and how we can be more efficient.
At 4 Level Coach, we've got this excellent tool called the "pricing for profit tool" that helps businesses set prices that guarantee profit, so no more guessing. If we don't learn how to price things right, it's like being on a hamster wheel – we keep running, but we're not making the profit we need to make our business take off.
5. Lack of Time Mastery
So, after we've figured out our vision, business smarts, money stuff, and pricing, another thing can trip us up: handling time. Yep, it's all about getting a grip on how we spend our time. See, even with all the other pieces in place; we react to things instead of taking control if we don't manage our time well. We're always scrambling to catch up with daily tasks. And this usually happens because we still need to set up the basics, like knowing what tasks matter and how to pass off the less important stuff to others.
Think of it like this: you get caught in a loop where you're always in a hurry, just dealing with whatever comes up. You're in the business, not working on growing it. And at the end of the day, you're like, "Wait, what did I even accomplish?"
Breaking this cycle needs a change in how we think. We have to challenge that idea of "I can do it better myself" and start trusting our team. It's about passing on tasks to capable team members so we can focus on the big stuff that matches our vision. That gets the business moving forward, not just stuck in chaos.
6. Lack of Systems Mastery
Not having a good handle on systems often gets in the way of taking your work to the next level. And by systems, I mean organized ways of doing things. When these systems are missing, your business becomes a crazy whirlwind, and you feel like you're running in circles. It's like being on a hamster wheel that never stops.
To tackle this, you need someone who's a "Systems CIA." It's like having a superhero for your business, but instead of fighting villains, they create and manage the systems that keep things smooth. Entrepreneurs, usually the big-idea folks, might not be the best at this. That's where having a Systems CIA comes in. They handle the behind-the-scenes stuff that makes everything work.
Now, let's talk about dealing with everyday issues and roadblocks. To get things under control, you need SOPs (Standard Operating Procedures) for every operation – they're like guides for how to do something. You take one challenge at a time, figure out how to fix it, and then make a system to keep it from happening again. This step-by-step process makes things better over time.
Lastly, when you're aiming for bigger things in your business, you need software on your side. It doesn't matter if you're using BuilderTrend, Jobtread, or any other platform – the key is using these tools to improve your systems. This way, your business can grow smoothly and without hiccups.
7. Lack of Team Mastery
So, here's the deal: the seventh key to success is building a solid team. You're not alone on this journey – you need people who can work together like a well-oiled machine. But it's not just about having a bunch of folks around. It's about creating a team that knows the ropes, follows your business values, and can take on tasks you used to handle. This way, you can focus on the big picture instead of getting caught up in the daily grind.
Imagine this: a team that's like a superpower. When you have systems, everyone understands and uses daily; things run like clockwork. But to make this happen, you need to switch up your thinking. Instead of always hunting for new team members, work on being a magnet for talent. Make your company a place people want to be by offering growth opportunities, cool perks, and a strong brand reputation. That's how you bring in the best players.
And here's the cool part: think of your team as investments, not headaches. When you invest in them, training and development become a priority. This creates leaders who inspire, not just managers who boss around. And guess what? Successful businesses have leaders, not just managers.
But wait, there's more! Just like you have sales plans, you should also plan for finding new team members. It's about being ready when you need new talent. With a clear hiring process and great training, you turn these investments into assets that improve your business. Lastly, keeping your team happy and motivated is a must. You need a 'Keep System' that holds onto your valuable team members and makes sure they stick around, bringing you the best return on investment.
8. Lack of Key Metrics
Understanding and using important numbers can really boost your business. Think about it – you can make things better when you keep track of them. Not paying attention to these numbers can keep your business stuck and make it hard to see what's going well and needs fixing.
Two types of numbers matter. First, there are KPIs, which are signs that show how well we're doing important things in our business. Then, there are KRIs, which tell us the results of those actions. And the most significant result that matters is money – that's the bottom line.
To keep tabs on these numbers, you can use scorecards for actions and scoreboards for results. You look at your moves and the points you score. But these numbers help you trust your team and let them take over some things. When you have a clear picture of what's happening, you can step back and let your business run itself. This means you can manage things even if you're not physically there.
Remember, these numbers are the key to going beyond just making a living and actually building something bigger. So, understanding and using these numbers isn't just about freedom – it's also about making more money and having a successful business.
9. Lack of a Marketing Machine
The ninth step to making money in your business is setting up a marketing system that works like a well-oiled machine. You know those vending machines that always give you what you want? That's how your marketing should be – reliable and predictable. You should know exactly what you're getting back when investing in it, especially when trying to find your perfect customers.
A big part of this machine is having a website that doesn't just look good but also brings in money. It's like having a salesperson online who attracts potential clients, turns them into leads, and creates opportunities for your business.
Now, you need to do some things to make your website and business more visible online. First, create quality content like blog posts and helpful resources. Next, work on your social media game and run ads to reach the right people. Oh, and don't forget about Google – you need to show up there too. It's like being on the map so people can find you. The real game-changer, though, is getting good reviews and testimonials. These make you look trustworthy and get you noticed by Google.
And finally, let's talk about videos. They're like superstars in today's digital world. Videos can be amazing for testimonials, your website, and social media. They grab people's attention and show what you're all about. So, think of them as powerful tools in your marketing toolbox.
10. Lack of a Sales System
Okay, here's number ten – a big step for making your business rock. Imagine you're building a house. Before you add more floors, you need a strong foundation, right? The same goes for your business. Before you grow, you need a solid sales system that turns potential customers into happy ones.
First things first, find your groove. It's like picking the right outfit for the right occasion – you want to be the perfect fit for your ideal customers. Then, filter out the time-wasters. You know, those folks who aren't interested? Let them go so you can focus on the ones who are.
Now, let's talk about how you stand out. You don't want to be just another copycat in the crowd. Be different, and don't be afraid to charge more. Five secret weapons can help you do this – they make your prices higher and your success rate better. Oh, and tech stuff matters too. With an increasing emphasis on tech, it's imperative to be obsessed with CRM (Customer Relationship Management). A well-implemented CRM manages relationships and provides tools like the pipeline scoreboard, which helps monitor leads, understand costs, and forecast future work. It enables you to keep track of leads, understand costs, and predict future work. This tool keeps your income steady, so you don't have those crazy ups and downs.
Finally, the acquisition scoreboard keeps track of client acquisition costs, ensuring you measure, analyze, and refine your process for continuous improvement. Your sales system isn't just about selling more; it's about building a scalable and sustainable acquisition machine. That way, you can always get better and better at bringing in new business. Remember, your sales system isn't just about selling more – it's about building a strong and steady way to bring in customers and grow your business.
Conclusion: The Roadmap to Growth for Builders and Remodelers
Continuous and intentional improvement is imperative to flourish in the home building and remodeling industry truly. These ten key reasons identify where businesses often fall short. Achieving success isn't merely working hard; it's about working smart, starting with a clear vision. If you feel trapped or stagnant, it's likely due to these outlined reasons. Reflect, recalibrate, and strive for a better tomorrow.
To all builders and remodelers, may you achieve great success, break free from stagnation, and keep pushing the boundaries of excellence. Cheers to growth and prosperity!
- Randy
4 Level Coach
To learn more about this topic, Michigan Builders License, and 4 Level Coach are partnering to bring you a free webinar called 10 Reasons Why Builders and Remodelers Fail to Grow, on August 22, 2023, at 2 pm.
