A successful business starts with developing a financial blueprint, according to Doug Sutton, CGR, CAPS, president of Sutton Siding & Remodeling in Springfield, Ill.

In an educational session during the International Builders’ Show in January geared to builders interested in diversifying and remodelers seeking tips on how to be more successful, Sutton discussed the 10 best practices that he believes helped him become the 2009 NAHB Remodeler of the Year.

That list includes:

1. A Business Plan. A written business plan serves as a financial road map and blueprint for the future, helping to measure business goals on a regular basis, Sutton said. “You need to plan your work and work your plan,” he said.
   
   
2. Education. “Knowledge is power,” Sutton said, and it is essential that everyone in the organization is educated. He urged remodelers to provide their employees with certification training. “If you are certified by a manufacturer, it gives you a competitive advantage,” he added, and he suggested that membership in a trade association opens up important networking and educational opportunities.
   
   
3. Sales/Lead Generation. A successful operation needs to follow up on all leads, logging and tracking them, and thank you notes should be sent out after sales contracts are signed. At the job close, remodelers should ask their customers for referrals. “If you only get three jobs per year by asking for a referral, it’s well worth your time and effort,” said Sutton.
   
   His firm reviews all qualifying leads to find out why potential customers called and how they heard about the company. Sutton Siding & Remodeling does not use telemarketing, but instead relies on referrals and advertising to generate new business.
   
   
4. Sales Time Management. “Time is money,” Sutton said, and it is important to plan calls in a given area to minimize travel time and know where you are going before leaving the office. Before the appointment, make sure to have all presentation materials in order and review lead sheet information. During the customer call, keep small talk to a minimum and get right down to business. Try to close during the presentation by asking what color and styles the customer prefers. Always listen and take notes to reduce the need for call backs.
   
   Never be late for an appointment, Sutton advised, but if you are, call your customer and ask if it is still ok to come. Never look at your watch during a presentation and most importantly, tell the truth and deliver what you promise.
   
   
5. Time Management. This starts with good planning, Sutton said. He advised remodelers to plan their schedules each day, up to a week in advance. They should also maintain records outside of prime-selling times, minimize coffee breaks and meal times and avoid late-morning starts and early-afternoon departures. “You also need quality time for yourself,” said Sutton. “Block out an hour a day, no interruptions, where you can order materials, open mail and devote this period strictly to what you need to do.”
   
   
6. Niches. Finding a niche will make a business more profitable, said Sutton. “We were known throughout the community to be a leader in siding and people still think of us as a siding company,” he said, even though he has diversified into a full-line remodeling operation. The firm has also opened up a new insurance niche.
   
   
7. Job Costing. The rule of thumb is to know your costs on every individual job your company performs.
   
   
8. Marketing. Sutton suggested creating a database to establish preferred clients and provide them with special offerings through direct mail. Demographics should be studied to determine who to market to. “We are a middle- to upper-middle-income area and we have lots of referrals,” said Sutton. “We use Census data within a zip code to track incomes, family size and age.” Sutton surveys his customers to find out about their experience and also makes it a point to poll the ones that got away. As an inducement to get them to respond, he offers a $5 gift card from a local video store. About a quarter of these surveys come back with responses and many have led to new work, Sutton said.
   
   
9. Advertising. Sutton said that radio is an important part of his company’s marketing efforts. Ads typically run Monday, Wednesday and Friday one week and on Tuesday, Thursday and Saturday the next. The firm also does a little advertising on TV and cable and considers job signs the “best investment you can come up with.” Sutton believes that the yellow pages are ineffective and said that he avoids shopper guides because they attract “the penny pinchers.” He said it is important for companies to keep tabs on how much they spend on advertising, and he said his firm spends a maximum of 2% of its revenues on ads.
   
   
10. Public Relations. Sutton urged remodelers to design programs that increase their visibility in the community, to put up signs when they start jobs and to issue press releases touting educational advancements, awards and recognition.
    
    “Sutton’s Big Thank You” has also worked well. Each year the company seeks entries from the community to receive one of two $5,000 home repair jobs from the firm. No self-nominations are allowed. The ideal winner, Sutton said, is someone who has served the community and is in need of home improvement services. The awards have been featured on local TV and have garnered tremendous publicity and goodwill.

For information on remodeling resources available from NAHB, visit www.nahb.org/remodel; or e-mail Kelly Mack, or call her at 800-368-5242 x8451.