“It’s an unbelievable network that has been very valuable to me and my business.”
Kitchen Design Partners, Inc
A business growth opportunity for independent dealers
Kitchen and bath dealers who turn their project management department into a profit center can add tens of thousands of dollars to their firm’s bottom line! Many industrious dealers see their business increase from quarter to quarter without ever tapping the total capacity of revenue their operations can generate. Owners who believe they can earn higher margins for their business, but aren’t sure how to harness them, should have a quick read of what follows.
A problem facing independent dealers
One of the perennial issues hindering the independent kitchen and bath industry is that businesses earn far lower gross profit margins – 29% instead of 37% – or higher. Even the country’s busiest and biggest independent design firms are not running as efficiently as possible.
Many firms lose 5% to 8% of their margin during the installation process!
It does not need to be this way. There is a reason why independent dealers are missing opportunities to unlock revenue streams. There is also a solution to generate profit from areas of the kitchen and bath business that have only begun to be tapped.
The dealer’s solution
There is no secret to business success, but there are innovative routes kitchen and bath firm owners can take that will support the successful growth and stability of their business. However, there are many unknown and under-used though profitable strategies, tips, and techniques to tighten up controls and significantly increase profit margins by breaking down the steps needed to take businesses into the next stratosphere.
SEN teamed up with 40-year industry veteran Tom Blau who learned how to turn a project management department into a revenue stream. Working with Blau, SEN developed The Online Project Management Course, two four-hour investments over two weeks that will help you determine how to eliminate profit erosion from every project you and your team take on.
What the online Project Management Course covers
In the online SEN Project Management Course, we will discuss how to turn a project management center into a revenue stream.
Estimating methods for generating profit
It’s a common practice for independent kitchen and bath dealers to underbudget their jobs. No one underbids because they want to earn less but because they can’t see or choose not to see the big picture. Typically, owners who are narrow sighted in estimating are not accounting for burden expenses. In the online Project Management Course, Tom will cover the fundamental importance of proper job estimating methods and accounting for burden expenses.
Burden expenses include the project manager’s and delivery driver’s time, warehouse space, truck operational expenses, insurance, payroll taxes, and any indirect expenses related to completing a job outside of the primary materials and labor factored into it. The latter either payroll or subcontract labor – can easily be job-costed, but true burden expenses are more difficult to consider. Tom will cover good business practices in the Project Management Course to help owners become comfortable with accounting for burden expenses.
The importance of scope and specifications
To avoid avoid misunderstandings that cost time and money, every project detail must be thoroughly documented in the job specifications and final agreement’s terms and conditions. It’s just as important to document what the dealer is not doing – such as flooring and painting –
as well as to list what the homeowner is responsible for.
The documentation should cover what happens if, for instance, there are hidden contingencies – such as when a non-bearing wall needs to be removed and an unforeseen pipe shows up. An agreement should spell out what “substantial completion” means because that is when the final payment is due. It should also spell out what the company’s project warranty covers and how long its duration is.
Handling purchase orders
Professional handling of a purchase order starts with a project manager reviewing blueprints, specs, and cabinet orders and including the expected amount before the order is released to vendors and subcontractors.
The online class highlights the importance of accurately estimating delivery dates, job starts, and expected net costs on all purchase orders. Dually important is checking cabinet acknowledgments within twenty-four hours of receipt so the production time slot is not lost with the manufacturer, which can lead to one or more week’s delay in delivery.
Scheduling best practices
Handling the client’s needs goes hand in hand with handling a firm’s needs, so preparation for serving a client is prefigured by planning jobs well. In the two-day online course, SEN will discuss how Gantt Charts are used for unpacking critical installation pathways. We’ll also cover why the best way to communicate job start time includes accounting for “wiggle room” and how to prepare clients for what to expect once the job commences.
Our online project management course tackles managing the scheduling process to get subcontractors, installers, and inspectors to the site at the right time. This goes hand-in-hand with encouraging prospects that it’s in their best interest to have the design firm (a) handle the project design, (b) furnish all products, and (c) install them. When there isn’t one party performing a turnkey installation of the critical pieces, the risk of oversights, outright mistakes, miscommunications, delays, and extra costs becomes very real.
Trade coordination techniques and communication
The rise of software’s role in business took longer to reach center stage in the kitchen and bath industry. Now that there’s a broad and deep reliance on the cyber world among design firms, it’s essential to put our use of it into perspective.
Today, kitchen and project management software such as Co-Construct, Builder Trend, and DesignAlign are integral to the success of small businesses. Still, your team will always be the driving force that uses them for greater success.
In the SEN Online Project Management Course, Tom will discuss how to lead your personnel to have the greatest efficacy with prospects and clients through such habits as:
- Dispatching sales designers to visit the job site regularly
- Updating project managers from the site with changes to a job
- Facilitating client access to project scheduling
The aforementioned topics are among many practices that should be oiled into every kitchen and bath design firm’s operations.
The Project Management Course will also cover how the installation process can be efficiently executed for the best client experience by factoring such practices as using a project manager as an inside quarterback to oversee the highest level of success by the completion of the job, delivery, and storage of products, and deploying dust barriers to keep the job debris to a minimum.
Rounding out the SEN Online Project Management Course, Tom will share his experiences in another overlooked area of efficient remodeling business: how to achieve a zero job completion punch list.
- Agreements and guidelines for subcontractors
- Organizing punch list appointments
- Client sign-off on punch list agreements
The Project Management Course is ideal for learning – or brushing up on methods for sharpening operations – so that kitchen and bath firm owners have a maximalist strategy for injecting more profit dollars into their businesses.
Who should attend the Online Project Management Course
These four information-packed, two-hour sessions are for anyone seeking to advance themselves in the kitchen and bath industry and improve how they do business to earn more income:
- Business owners
- Project managers
- Sales designers
- Design associates
- Installers and subcontractors aspiring to become project managers
Anyone in kitchen and bath remodeling who is looking to take on more responsibilities and perform them exceptionally well will benefit from the Project Management Course. Opening revenue streams is the name of the advancement game. We believe investing in these eight hours is wise for your career.
—SEN Design Group
Master strategic planning, selling more into each job, leveraging technology, Good-Better-Best selling, and other industry-specific implementations at one of SEN University’s valued online business courses. Or contact us to attend our in-person schools.