442: Set And Manage Remodeling Client Expectations Without Hiring More People

Contractor Success Map with Randal DeHart | Contractor Bookkeeping And Accounting Services

This Podcast Is Episode Number 442, And It's About Four Things To Consider Before Expanding Your Service Offerings Balancing customer experience and setting client expectations against your time and budget is a difficult task. It would be best if you had excellent planning, efficient project managing, and perhaps the right amount of staff working to keep customers happy, but not so many people that workers are standing around looking for things to do. If your customers have long wait times, that's good news for you initially—it means your business is popular. The bad news is that homeowners won't wait around forever for you to fix your time management issues. If they like your services, they'll be a bit forgiving, but too many long waits will send them to your competition. For instance, when a homeowner decides to remodel their living space, they dream about how it will look and feel when it is done, but they have no idea what an emotional roller coaster is in store.

Surprises were great when you were a child because you were conditioned to believe that surprises meant you would get something good! As adults, you have been conditioned that surprises are not always pleasant. Highly profitable remodel contractors understand this and have processes in place to deal with it.

Fear on both sides

Contractors without financial reporting systems they can trust to generate accurate Key Performance Indicators and Reliable Job Cost Reports do not know if they are making or losing money from day to day, which leads to doubt, which leads to stress, and the result is they tend to work faster and harder. Their frantic behavior raises everyone's stress level.

Contractors in this situation tend to feel like they are driving down the freeway at midnight, wearing a blindfold hoping for the best, and fearing the worst.

A Comprehensive Bookkeeping and financial reporting system can reduce or remove the feeling of being out of control.

A Simple Easy To Understand - Remodel Invoicing System to keep track of the following:

• Original Contract Price
• Change Orders
• Job Deposits
• Advance Payments
• Each Progress Payment
• Running Balances Showing What Is Done
• Running Balance For What Is Still Unbilled
• Percentage Of Completion On Each Major Section

Invoicing Residential Remodel System

Fast Easy Accounting Sample Pay Application We Prepare For Our Clients Using QuickBooks Reports

It needs to be in place before starting any remodeling project. It will save you and your remodel client much grief, and your cash flow and profits will soar. We work with contractors like you to develop strategies to deal with these issues and more.

Homeowners expecting their house to be improved suddenly find themselves under siege from a group of cavemen who are ripping and tearing their living quarters apart, and they panic. Some homeowners will tell you they are miserable; some will say nothing, having decided to get even with you once the job is done by withholding final payment! Some consider calling 9-1-1, but they don't because they would be laughed at and perhaps irritate the contractor.

Under-promise and over-deliver

At some point, your remodeling business will be so busy that customers will be stuck waiting for service. In those cases, under promise and overdeliver. If you know something will take five days, tell the customer it will take a week. Customers are happier if something takes less time than expected than if it takes more.

This tactic also buys you time in case of unexpected delays. The worst thing in this situation is that you have to tell customers their wait will be longer repeatedly. That frustrates them and makes them less likely to come back.

Final thoughts

Line-ups and wait times are inevitable, but they don't necessarily mean you need to hire more employees. There are solutions available to you that enhance the customer experience without you hiring more people.

It is your responsibility as a contractor to understand the fears and concerns of your client and have a communication plan in place as part of the overall project plan.

About The Author:

Sharie DeHart, QPA, is the co-founder of Business Consulting And Accounting in Lynnwood, Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on how to manage the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. Call 1-800-361-1770 or [e-mail]