It wasn’t until Levinson started Maryland Heritage that he experienced the consequences of being so hell-bent on action. He hurriedly estimated a job, forgot to include siding, and had to eat $8,000 in siding costs. Lesson learned? “If I’m a few hours over on installations, it’s not going to kill me. But if I do an estimate faster than I should because I’m not thorough, I could make a mistake and lose thousands of dollars.”
Several remodeler-CEOs cite the importance of having a good accountant — preferably a CPA with existing construction clients. “Ninety percent of the remodelers out there are like me: hammer and saw guys,” Motsenbocker says. “They think it’s all about the craftsmanship, and they don’t realize what it costs to keep a business running.” Admitting that you need help may be half the battle. Before opening the doors at Jud Construction, Motsenbocker enlisted an accountant to help him set up procedures for everything from budget to bookkeeping to timesheets.
Most remodelers aren’t nearly so forward-thinking. Small companies often stay so busy initially that they see quiet number-crunching as an intrusion on their time. “Ignorance is bliss,” says Jeff Hall, who founded Villa Builders in Chester, Md., in 1997. “I started out by putting my belt on, and flying by the seat of my pants.” It seemed to work. “I made a decent living, and my books always showed a profit, but I’ll be damned if I know how,” he says.
Brady also recalls a delightfully lackadaisical approach to finances. “Revenues were pretty small for a while, so it was pretty easy to make piles of receipts and invoices, and to divvy up what was left in the checkbook at the end of the week.”
That’s generally OK if you “see yourself as just making work for yourself,” Case says. You can always work for others when business slows down. “But when you get bigger, when you have employees, you have to understand your finances.”
HITCHHIKING PERSONALITIES You’ll need to put more than numbers in writing to reach your destination as CEO. Delegation is a core component of marketing success, and you can only delegate with good employees and good systems.
“Systems, systems, systems,” Brady says. “They should all be written down,” from budgets to job descriptions to marketing. As his business grew and his workload expanded, “my job changed, and I wasn’t prepared,” he says. Instead of having his staff follow written procedures, “I was doing it on an itinerant level, constantly running out, saying, ‘Are we doing this, guys?’”
Levinson says systems are “pretty much the highest priority in our business right now.” So far, he has concentrated on systems for job folders, job spec sheets, production meetings, and production checklists, with more to come. “Employees need to know what needs to be done, not because you’re saying it, but because it’s a system,” he says. Delegation is a big goal; each of his lead carpenters has a company credit card and knows when to use it. “I don’t want them calling me when they need to buy three more sticks of trim.”
More than announcing systems from the top down, Levinson strives to get “buy in” for them — a strategy that Brady also found essential to making systems stick at Oak Design & Construction. “You’ve got to spend the time educating these guys,” Levinson says. In production meetings, he lays out his company’s revenues, profits, and expenses, including such line items as workers’ compensation insurance. “The guys in the field tend to look at the people in charge and think, ‘they own the business, and they make all the money.”
Levinson doesn’t want his staff to feel that they’re expendable — or that he is either. “A lot of these guys, if you go out of business, they don’t care because they’ll go work somewhere else. I think you should get them to recognize that they’re just as important to the business as you are.” And, “to buy into the mindset, and for it to be extremely important for them to work for Maryland Heritage.”