Who wouldn’t like to gain the equivalent of an extra work day per week, speed up employee training, reduce mistakes increase sales and profits, sleep better and take two real vacations every year?
Thanks to a 250-page three-ring binder on his desktop, Matt LeFaivre of J.R. LeFaivre Construction, Taneytown, MD, says he is enjoying all these good things. LeFaivre’s 250-page Standard Operating Procedures (SOP) Manual, based on Turnkey System, does more than 20 custom management checklists.
The checklists provide step-by-step procedures on to open the office in the morning, make bank deposits, handle telephone leads, do kitchen estimates, write up change orders, file job records and close up the office at night.
To make a bank deposit, for example, there are eight specific steps to follow, including how to endorse a check, fill-out the deposit slip and record account numbers. The checklist for paying bills has 18 items covering things like the right way to get an approved list of invoices, how to locate checks and how to enter bills on the computer program.
The SOP manual also covers estimating, design production. For kitchen estimates, for example, LeFaivre says checklists cover every phase of the project in a thorough and consistent manner:
- A Pre-Estimate checklist ensures that complete information is recorded accurately during the first appointment to specify existing conditions, functional needs and design wants.
- A Kitchen Estimate checklist nails down products and costs.
- Once completed, the Kitchen Estimate checklist is so comprehensive that someone unfamiliar with the project can use it to develop the final specification document.
- Using the accepted specification document, office staff can follow another checklist to produce the job contract.
- Once the contract is signed, field staff use checklists for production steps and change-orders.
If this all sounds like getting bogged down with too much paperwork, LeFaivre says the exact opposite is true.
“Having a system in place is giving me the equivalent of one extra work day per week,” LeFaivre says. “Checklists cut out all the unnecessary things I used to have to do – like being tied up on the phone answering questions all day long. That’s time I need to be out in the field and on sales calls because we’ve never been busier. In recent months we’ve been doing about five estimates a week and closing 60 percent of them.
“Checklists also let everyone in the company know exactly what to do, including our subs. They let me know that things were done, and if not, why not. There will always be human error, but a system puts an end to excuses and shows you areas for improvement.”
Sold on Systems: A logical progression
Moving to systems management was a natural step, LeFaivre says. His father, Jim LeFaivre, started the company 26 years ago when the former school teacher’s summer work grew into a full-time business. LeFaivre began helping on jobs when he was young. After attending Franciscan University, Stubbenville, OR, he worked full time in the field.
In 1997, LeFaivre moved into the office to help his father expand business past the $500,000 mark.
LeFaivre’s first step was to do a complete financial analysis. It showed greater opportunity, especially in kitchen remodels and additions, and sales and marketing were improved to target this work.
The result has been steady growth. In 1998, the company did $1 million in gross sales. In 1999, they reached $1.2 million. This year they are projecting $1.5 million.
But as the company began to grow, working together as a father-and-son team posed new challenges.
“Everything I was doing was on the computer, but Dad was doing stick estimates and hand-written contracts,” LeFaivre says. “Our concern was that if we didn’t get on the same wavelength we would get so busy that we would lose control. We were writing messages on sticky notes and scraps of paper.”
When Jim LeFaivre heard about the Turnkey System at the Remodeling Success Systems Boot Camp in 1997, he advised his son to look into it. The company bought it from the Master Builder Group in 1998.
“What 1 really like about the Turnkey System is that it’s easy to customize. You do have to make the time to customize it and put it into effect, but if you take the time the system will later reward you with more free time to do other things.
One step at a time
The Turnkey System provides management checklists for administration, sales, marketing, estimating and production. Developed by David Lupberger, a remodeler and industry consultant, it can be implemented as is or customized.
LeFaivre started by customizing the administrative section, the easiest to do, and the most critical in terms of saving him time.
“There was not enough order in the company,” he says. “Getting administration organized saved me years of fooling around trying to figure out a system of my own. Now, anytime we have a problem everyone knows how to take care of it by going to the binder. More than 90 percent of questions can be answered through our manual.
“The growth we’ve seen in the past two years would have taken five without a system in place. And we’re not only doing more work but we’re making more money.”
Implementing a system starts with commitment from the top (By Linda Francis)
Run Your Business so it Doesn’t Run You! The need for systems is a sign of success. When a remodeling business grows, adds people and multiplies the number of times something gets done, then new systems become essential for both profitability and sanity.
However, a system by itself is no guarantee that the desired benefits will be gained. For a system to work, support for implementation must come from the top. That means commitment to change is needed from the owner and managers.
The first challenge to successful system development and implementation is finding the time. You need to commit at least an hour or two per week to develop your systems. No magic solutions here. As Nike so loudly exclaims, “Just Do It.” Commit to creating one system at a time until all are developed.
Creating systems or customizing a program is a relatively easy process:
- First, identify procedures you do repeatedly – Change orders, invoicing, estimating, purchasing, hiring, etc.
- Next, prioritize the list in terms of frequency of occurrence, level of frustration, money lost or time wasted.
- Now, in order of priority, pull together the people involved with an operation and have them diagram the current methodology.
- Then, have them create or adopt a new system that works. Keep it as simple as possible.
- Use the new system for a predetermined period of time.
- Once you have lived with the system for a while, modify and tweak it as needed.
- Review all your systems regularly to make sure they still meet your needs. That’s the easy part of the process! Now comes the hardest part – implementation.
The four keys for implementing successful systems are
- You have to let go. Most likely the new system has someone doing something you used to do. Work on your delegation skills and get out of the way.
- Provide the necessary training. Just because your new system says that Charlie will do the change orders does not mean that Charlie knows how to do them.
- Inspect what you expect. Check in regularly on how things are going until the new system becomes a habit.
- You have to set the example. The worst offender for not following a system is usually the owner. Your leadership is critical.
- Systems are a great way to improve quality, productivity and your personal sanity. As long as you know the results you need and the personal commitment required, the investment in time and costs is well worth it.
Linda Francis is a remodeling industry consultant and trainer, OR’s Staying Sane columnist, and author of Run Your Business So It Doesn’t Run You. She can be reached at Ifrancis@pacific.net.
After administration SOPs were in place, sales and marketing were done next. For LeFaivre, this meant simply refining and codifying the changes they had already put into place.
Implementing SOP checklists for production has been the most difficult because the work done is so diverse, LeFaivre says. One challenge is that production checklists don’t apply to every job. Kitchens are so unique that LeFaivre developed some separate checklists for them. He is also considering creating separate checklists for baths.
Despite the difficulties with production checklists, they tell employees and subs exactly what to do on each job. Checklists are included in field job folders and employees and subs are required to check off, sign and date the forms as the work is completed. This provides a management tool for LeFaivre to review jobs and identify areas for improvement if there were any problems.
LeFaivre also wrote a section for the manual to cover company personnel policies, and has developed or revised business forms.
Customization and expansion of the original SOP manual has increased its pages from 174 to dose to 250. LeFaivre doubts that there is much value in going beyond this point.
“You can only do so much,” he says.
“The possibilities of a system are endless, but you have to be careful because you could go crazy and get to the point where it’s no longer useful. At the same time you have to keep on your system. When we started this I thought we’d get our SOPs in place and that would be it. But you have to constantly manage your system. Your system will run your company, but you have to run your system.”
Matt LeFaivre can be reached at firstname.lastname@example.org. For information about the Turnkey System contact the Master Builder Group at (888) 818-6614 or at www.turnkeyprogram.com.