2. Manage Your Company Richardson doesn’t have a backlog, he has longer “hatching” periods. Swartz doesn’t have a backlog, he’s in an “organized crunch.” Call it what you will, companies with wait lists have to make tough decisions about how to handle increasing volume.
Many remodelers credit their processes for their ability to grow and shrink with the times. Richardson says that Case is able to control the flow of its projects by the way the company is structured. Its strict adherence to process dictates the timelines. “Is someone disappointed they can’t get going with us more quickly? Yes,” he says. “But it’s not a backlog, it’s the hatching process that determines the time it will take to get going.”
Mark Peterson, president of Minneapolis-based M/A Peterson, says that remodelers need to build in flexibility. “We have seven project managers; four of them are capable of running multiple projects. The carpenters can manage a job under a project manager. The key is having the training where you can stretch capacity with existing staff.” M/A Peterson’s $15 million a year in revenue comes mostly from 25 projects (not including its smaller projects, and cabinet and landscaping jobs).
Tenhulzen stretches its supers, putting them on three or four jobs, using carpenters underneath them to stay on task. “We produce more this way, but there is a fine line between productivity and customer satisfaction. We’ve reached the threshold on what supers can produce, and we still have a backlog,” he says.
Swartz prefers to keep one project manager per job, but when times get busy, he’s ready to ramp up. “Sometimes a manager is asked to run more than one job. We tell both customers affected. If you don’t, you’ll have them calling asking where Don is today.”
Wallace zealously sticks to his one-crew-per-job approach, which he says shaves 40% off the job time, a selling point he uses to dull the disappointment that his 14- to 16-month lead times elicit. “The lead time stretches, but the time of disruption shrinks,” he tells customers. Wallace produces about $3 million a year doing eight projects with three crews.
Many remodelers choose to add people, but that might not always be the right call. Kelly weathered the high-tech bubble of 2001 and is aware of the danger. “Don’t grow your business so fast that you can’t handle it. If I had [the 1990s] to do over, I would have extended the backlog a little longer, but if you get out over three or four months, you lose customers and previous clients that come back for more work,” he warns.
Most important, he notes, “Don’t hire employees during busy times that you would reject in slow times. You have to grow with good employees; we’re successful today because of our training.”