More specifically, Motsenbocker says, “a handyman will have a truck loaded with stuff. He looks at a job, gives a price, does the job, collects the money, and goes home.” At Jud Construction, “When we get a call, we send out a salesman who analyzes what has to happen, returns to the office, writes an estimate, does a proposal or a contract,” Motsenbocker says. “People sign it and then it goes to the production department, which produces it.”
RUN ONE JOB WELL Because you’re using all your resources, the effort that goes into small jobs can be just as much as that in a larger job. “You have to do an estimate, send a subcontractor, schedule the job, maybe pull people off bigger jobs; it can create a lot of churn in the office. There are bills, invoices, reconciliation, a lot of sales calls,” says Downing, which is why many remodelers turn and run from these jobs. The way to pursue them and even enjoy them is, Downing says, “to be really systematized.”
Jud Construction has, since 1968, always worked small jobs. Last year it did 250 total jobs ranging from $200 to $150,000 —bringing in $2 million in revenue. “The key to running this many jobs is running one job well,” Motsenbocker says.
In other words, you must have the systems in place to make it happen. For Jud Construction that means a series of scripted events beginning with the first phone call. A receptionist answers the phone. (Motsenbocker is adamant that from 8 a.m. until 5 p.m. a human being who knows the company answers the phone.) She fills out a lead sheet and sets an appointment. “Everybody needs to keep their calendars up-to-date so she knows when to send them,” Motsenbocker says. The company uses Microsoft Outlook to keep track of these schedules.
“The receptionist has to be aware of the area, how to get there, how long it will take for the salesperson to analyze the job,” he says. “For a bathroom she’ll schedule more time than for a front-door unit. She has to be educated to know that.”
After the salesperson goes out on the lead, he or she fills out a checklist with detailed information. For example if it’s a new exterior door, they’ll need to know the jamb thickness, exterior finish, type and color of trim, swing and size of the door. The salesperson then returns to the office and creates an estimate using MasterBuilder, which is integrated with the bookkeeping system. “This is important because when the project is sold, it’s already entered into the system,” Motsenbocker says. Information is also entered into folders; each salesperson has his or her own personal color. Motsenbocker’s is yellow.
The salesperson brings the contract and down payment to the receptionist, who prepares a maroon, four-tab job folder. “Tab 1 is the checklist, proposals, estimates, final invoice, and job costing info,” Motsenbocker says. “Tab 2 is drawings, the selection sheet, pictures, trade contractor quotes, and the daily log. Tab 3 has previous proposals and bids, previous quotes, insurance info, customer contact info, and miscellaneous, and tab 4 is delivery copies. The whole idea is for everyone in the office to know where to go for information.”
The job is turned over to production, which orders materials and assigns one of 10 carpenters to the job. At the end of the job, that carpenter, in turn, brings the “certificate of satisfaction and direction of payment” for the client to sign. The receptionist and bookkeeper bill out the job, and the salesperson takes the invoice to the house to collect the money and see if the client is satisfied. He or she will also bring a thank-you gift and literature about something else such as new roofing or home modifications for aging in place. “You get your money the same day the invoice goes out, you keep the cash flow, and you can use the visit as a marketing tool,” Motsenbocker says.
Normally, Jud runs about six projects a day but has run as many as 12. “There could be 10 crews or two crews, depending on what they’re doing. They have to be skilled in multiple things,” Motsenbocker says. Most jobs are done for a flat fee, but there is the occasional time-and-materials job. “We use a 75% markup to get a 42.8% gross margin,” Motsenbocker says. “The smaller the job, the more margin we’re likely to get out of it.”
Although the company’s overhead is close to 30% — and Motsenbocker would like to see it at 25% — he wouldn’t work any other way. “We like doing this many jobs,” he says. “People are willing to pay for the service we give. When we arrive we lay down a drop cloth. Everybody carries brooms, dustpans, vacuums, trash bags. They wear neat, clean uniforms. Clients know that when we leave, the house will look better than when we got there.”