Residential Remodelers: Six Proven Strategies to Double Your Profits in Just 90 Days
As a residential remodeler, you know how tough it is to keep every project profitable and cash flow positive. Rising material costs, skilled labor shortages, and intense competition can leave you feeling like you’re spinning your wheels.
But what if you could double your profits on every project in just 90 days? It may sound ambitious, but with the right strategies, it’s entirely achievable. Here are six proven strategies to help you dramatically increase your profitability, drawn from years of experience helping remodelers thrive.
1. Craft a Clear Strategic Plan
Many remodelers operate without a solid plan, leaving their businesses reactive rather than proactive. A well-crafted strategic plan can turn the tide by providing clarity, focus, and measurable goals.
Why It Matters:
Without a plan, inefficiencies multiply. A clear strategy ensures you know where you’re going and how to get there, making every decision purposeful.
Actionable Steps:
Define Your Vision and Values: Write down your business’s focus and long-term goals. This should guide every decision you make, from the projects you take on to the way you structure your team.
Set SMART Goals: Create Specific, Measurable, Achievable, Relevant, and Time-bound objectives. For example, aim to increase your gross margins by five percentage points (i.e. from 20% to 25%) in 90 days. Break these goals into weekly and monthly milestones to track progress.
Use a One-Page Plan: Summarize your business’s mission, key metrics, and priorities on a single page. Include actionable steps for each function (or department) to ensure alignment across your team. Review this document weekly to stay on track.
Conduct Regular Strategy Sessions: Schedule monthly check-ins with your team to assess progress and adjust the plan as needed.
Real-World Example:
A Denver-based remodeler implemented a strategic plan and shifted from taking every job to focusing on high-margin projects. They prioritized upscale kitchen and bathroom remodels, which aligned with their expertise and market demand. Within three months, they saw a ten percentage point increase in profits and improved client satisfaction.
2. Leverage the Profit Equation
Profit isn’t just about cutting costs; it’s about optimizing the variables that drive your bottom line. The Profit Equation focuses on increasing leads, conversions, average project size, and profit margins.
Break Down the Equation:
Leads x Conversion Rate = Clients
Clients x Average Project Size = Revenue
Revenue x Profit Margin = Profit
Actionable Tips:
Increase Lead Generation: Use referral programs, targeted digital marketing, and strategic alliances to attract high-quality prospects. Partner with local realtors and interior designers to gain access to homeowners in need of remodeling services.
Boost Conversion Rates: Improve your sales process by using detailed proposals with clear timelines, costs, and deliverables. Conduct follow-up calls within 48 hours of every consultation to address concerns and close deals faster.
Offer Good-Better-Best Options: Offering different levels of quality and other upgrades like custom cabinetry, energy-efficient appliances, or luxury materials. Bundling these options into tiered packages will make decision-making easier for clients.
Improve Client Retention: Stay in touch with past clients through newsletters, holiday cards, special events, and calls so you keep your business top of mind for future projects.
Case Study:
A remodeler who focused on upselling premium kitchen designs added $15,000 to their average project size and increased their profits by 40% in just 90 days. They also systemized and improved their sales process by implementing software to track client interactions.
3. Implement a Tactical Marketing Plan
Marketing is often overlooked by remodelers who rely solely on word-of-mouth. While inconsistent “incoming” referrals are valuable, a tactical marketing plan can generate consistent leads that positions your residential remodeling business as the go-to option in your local market.
Why Marketing Matters:
Effective marketing amplifies your reach, ensures a steady pipeline of projects, and attracts clients willing to pay for quality work.
Actionable Steps:
Develop a Formal Referral Program: Create a systemized process for collecting multiple high-value referrals from every prospective, current, and past client. Our “Kitchen Tune-Up" Referral System generates seven referrals from every past client.
Showcase Testimonials: Use before-and-after photos and client reviews on your website, Google Business profile, and social media. Post client video testimonials to build trust and credibility.
Create Targeted Campaigns: Use geo-targeted postcards, ads, and SEO to focus on high-value neighborhoods and projects. Highlight specific services, such as luxury bathrooms and “Professional Quality” kitchen remodels, in your campaigns to attract high project value and high-profit margin clients.
Engage on Social Media: Share project updates, client success stories, and behind-the-scenes content on Instagram and Facebook. Use hashtags to increase visibility among local audiences.
Proven Results:
A remodeler in Texas created a referral program and featured customer testimonials on Instagram. Within three months, their inquiries doubled, and their close rate improved by 20%. They also attracted higher-budget clients who were influenced by the glowing reviews.
4. Optimize Operations for Efficiency and Control
Operational inefficiencies often eat into profits. Systemizing and streamlining your processes can significantly improve your bottom line while reducing stress.
The Chaos vs. Control Model:
In the chaos stage, you’re constantly putting out fires. Transitioning to the control stage means implementing systems and processes that keep your business running smoothly.
Steps to Optimize:
Standardize Processes: Develop checklists for project management, permitting, and quality control. Ensure these are easy to follow and accessible to all team members.
Leverage Technology: Use project management applications such as Buildertrend or CoConstruct to track schedules, budgets, and client communication. Automate routine tasks like invoicing and progress updates.
Delegate Effectively: Assign tasks to specific team members based on their strengths, freeing you to focus on growth. Train a project manager to handle day-to-day operations so you can concentrate on strategic planning.
Deliver a "WOW" Customer Experience: Exceptional customer service sets you apart from competitors and turns clients into repeat customers and advocates. Go beyond the basics by:
Communicating regularly and proactively throughout the project.
Offering small, thoughtful gestures like thank-you notes or a gift at project completion.
Responding promptly to concerns and resolving issues with empathy and professionalism.
Creating a memorable "reveal moment" for completed projects, such as a walkthrough celebration with the client.
Conduct Post-Project Reviews: After each project, hold a review meeting with your team and other sub-contractors to identify what went well and what can be improved. Use these insights to refine your processes further.
Case Study:
A remodeler slashed project timelines by 20% using a project management app, enabling them to reduce labor costs, complete more projects, and increase annual profits by 30%. They also reduced material waste by standardizing their ordering processes.
5. Master Pricing and Margins
Many residential remodelers underprice their services, leaving significant money on the table. Mastering pricing strategies ensures you’re compensated fairly for your expertise.
Why Value-Based Pricing Works:
Clients care about outcomes, not just costs. Position your services as premium offerings that deliver exceptional results.
Actionable Tips:
Analyze Your Competition: Identify pricing gaps in the market and position yourself strategically. Research what other top-tier remodelers charge and adjust your pricing accordingly.
Offer Tiered Pricing: Present clients with Good, Best, and Best options to capture more value. Each tier should offer clear benefits that justify the price difference.
Regularly Review Pricing: Adjust your calculation rates to reflect inflation, material costs, and market demand. Conduct quarterly reviews to ensure profitability remains on track.
Educate Clients on Value: Use your proposals to explain the long-term benefits of high-quality materials and craftsmanship, helping clients understand the true value of their investment.
Success Story:
By introducing premium packages for high-end finishes, a remodeler increased their average project revenue by 35% and net profits by 60% within three months. They also created a pricing guide that clarified the value of each service tier, leading to fewer pricing objections.
6. Build a High-Performing Team
Your team’s skill and motivation are directly tied to your profitability. Building and retaining a high-performing team ensures consistent quality and efficiency.
The Power of a Great Team:
Skilled, motivated employees reduce rework, improve client satisfaction, and enable you to take on more profitable projects.
Steps to Build a Winning Team:
Hire Strategically: Develop an employee acquisition plan to attract top talent. Use detailed job descriptions with Opportunity Snapshots that highlight growth opportunities within your company.
Incentivize Performance: Use bonuses tied to project completion times or quality metrics. Offer rewards for meeting team goals, such as paid time off or gift cards.
Invest in Training: Keep your team updated on the latest tools, techniques, and trends. Schedule quarterly training sessions to enhance skills and introduce new technologies.
Foster a Positive Work Environment: Create a culture of recognition and respect. Celebrate team wins and encourage open communication to keep morale high.
Real-Life Example:
A remodeling firm increased client referrals by 50% after investing in training for their team, leading to higher-quality work and happier customers. They also reduced employee turnover by implementing a mentorship program for new hires.
Putting It All Together
These six strategies—crafting a strategic plan, leveraging the profit equation, implementing a tactical marketing plan, optimizing operations, mastering pricing, and building a high-performing team—offer a roadmap to doubling your profits in just 90 days.
Take Action Now:
The time to act is now. Focus on taking specific actions every week with these six strategies for 90 days
To start, choose one strategy, commit to it, and begin transforming your business today.
Action Plan:
Just get started and avoid overwhelm. For example, begin with developing your strategic plan while launching a referral program. As you gain momentum, integrate the other strategies to accelerate your growth.
Fast Track to Doubling Your Profits:
To make implementation easier, faster, less costly, and less painful, use checklists, guides, software, and coaching services specially designed for residential remodelers.
