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Your Business as a Machine – Part 3

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In order to lead and manage your business, you need a way of understanding it; a structure for how it should function that you can break down, measure, train others on, and improve. We call this model your “Business as a Machine.”

In this third of 4 articles, we’ll discuss the how this model for running a successful home performance business works and each function in more detail.

Referring to the Business Machine Chart, you see seven “gears,” representing the different functions of your business. This machine is how a Home Improvement Contractor should work, and is the structure we use at Dr. Energy Saver to help our dealers to greater success.

Last month we discussed the structure of the Business Machine:  each department is represented by a gear, with a manager; the person who is responsible for that function. Each gear has KPI’S, or “Key Performance Indicators.” These are the numbers you need to keep track of to measure the department’s performance.

In the first two articles, we discussed the marketing, appointment center and sales functions. Now it’s the production gear’s turn.

Production is the only thing customers pay us for. They don’t pay us to market to them, set appointments, sell to them, or do our accounting.  They only pay us for what the installers do in their home on installation day. Producing what we do is the reason we exist. It’s what we market, what we sell, and what we service.

Production has a production manager and sometimes a different production scheduler. These may be described as “Miss Inside” and “Mr. Outside.” The KPI is “Dollars per crew per week” which can be measured for the company and for each crew individually. The output is Happy Customers. You’ll notice the dollars, or cash, come off the Production gear because that’s what people pay us for.

Your installers can have a dramatic impact on all the other gears in your business.  Happy customers generate referrals, making it easier for the marketing team to generate low or no-cost leads.  Homeowners that are referred by their friends will more much more likely to book and keep your sales visits, increasing the effectiveness of your appointment center team.  A referrals should have high closing rates, helping increase your sales team’s ADL!  Your foreman and crews must not only know how to do the work, but must be trained in how to best interact with homeowners at the start, during and at the end of every install.  Your lead installers should also be expected to collect payment at the end of every job, facilitating cash flow and reducing or even eliminating any accounts receivables.

In the next and last article, we’ll take on the Service gear and well as the “enabling” gears:  Office and Accounting.

Marc Tannenbaum

Posted In: Building Performance

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