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Managing Job Profitability Part 2: The Budget

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business ownership, financial success, restoration business profitability, restoration estimatingRestoring Success

By Lisa Lavender M.T.R., M.F.S.R., M.W.R.

Production Manager: “If you spend more than you got, you are not going to have a good time.”

There it is! Sounds simple, yet it happens every day. Production manager said specifically “not going to have a good time.” The financial result of our jobs is the revenue stream supporting the business operation. We are doing rewarding and meaningful work, but when we fail at managing our jobs to profitability, it is not fun, it is not good, and it puts the business in jeopardy.

In the 2018 Restoring Success, Managing Job Profitability, you will find a list of a variety of considerations in managing the profitability of a job with a couple of brief notes about the budget:

  • “Budget based on a scope: If a scope of work is properly done before the work is executed, that should be representative of a job budget that is readily available to those responsible for the profitable execution of the job.
  • Benchmarks: In the world of emergency services, we often deploy and then prepare the corresponding revenue. Your company can establish benchmarks based on experience and review of profitable jobs. Example: A water loss of $XXX = 20 Hours”

By definition, a budget is the income and planned expenses of a project. How much are we going to receive, spend, and profit (gross profit)? Consider it a profit plan. If the profit plan goes off track, you have two choices to hit your target:

  1. Increase the revenue.
  2. Decrease the expense.

In the following simple example, please note there are many ways to approach a budget.

We analyze job outcomes and find:

Solutions

The solutions to this problem that is a plague in our industry relates to a variety of complexities. We can make an expansive list: price fluctuations, scheduling pressures, scope changes, workloads, pressures, and more. There is no alternative but to buckle down and fix it.

Based on reviewing job outcomes for over 20 years, I have observed a few issues that can be addressed by using a job budget. I call them the “Golden Rules.” Click the image below to download Job Golden Rules. You can use for training and job reviews.

business ownership, financial success, restoration business profitability, restoration estimating

Golden Rules:

  1. Get paid for what you do. A few tips:
  2. Do not pay more than you get paid.
    • Materials
    • Trades/Subcontractors
    • Anything
  3. Proactively Manage In-House Man Hours to a Budget

Find the Root Causes and figure out what you Need to Do. As you evaluate what your organization needs to better manage job profitability and employ the use of budgeting, consider the following based on the following approach: Download Needs Analysis

  • Operations: Do we have best practices? These are clearly defined expectations, assignment of responsibility, accountability, and workflows that support the execution of budgeting. As you analyze the operational needs, you may find it helpful to evaluate other related processes such as:  the selections process, upgrades, and supplements.An example of a best practice may look like:< Insert Position > has < X days > from job assignment to establish a job budget and record in job file. < Insert Position > has < X days > from time submitted to review and approve budget and record approval in job file. An example of a workflow may look like:As the job progresses, purchase orders, must be verified and approved based on the established job budget on file. Define who owns this responsibility(s). Those responsible who do not follow the plan should be held accountable. If the needed purchase does not fit the approved budget, define your company’s next steps:  change orders, supplements, other.
  • Tools | Equipment | Supplies: You may identify the need to evaluate software, systems, templates, and budgeting forms. There are many tools that can help support the establishing and maintaining of the budget.
  • Skills: As you evaluate the skills and abilities, you may identify a mismatch of those who are assigned the budget responsibilities, or you may identify a need to develop your team. As I am currently going through a program to receive a certification in what is referred to as a High Performance Learning Journey. A High Performance Learning Journey is in reference to the expertise, research, and methodology developed by Professor Robert Brinkerhoff, is an engineered process, a journey, and by design is built around performance outcomes and business rationale.

The reasons we consider a High Performance Learning Journey for managing a budget are:

  • The risk to the business is high.
  • The skills and abilities are complex, intertwined, involve many other people. A few training considerations:
    • Negotiation Skills
    • Financial
    • Critical Thinking
    • Communications
    • Ability to use company software and systems.
    • More, more, more

Some quick tips to employ a High Performance Learning Journey in your organization, you can start by breaking down the performance objectives. Create a journey that includes training, practice, mentoring, and feedback. (This is a very compressed version to get to help create action.)

When job budgets go off track, it is easy to get frustrated by the outcomes that at the surface seem easy to control. Our operations are complex and there are many challenges and strains in the day to day. Regardless, if you identify the issue, there is opportunity in the challenge, but it requires action. Using budgets can help you improve the profitability of the jobs. If this seems daunting, consider the resources and consultants in our industry that can help you make a meaningful change and impact in this area. May budgets bring you much Restoring Success.

Things I Learned From Running A Restoration Company

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company culture employee managementBy Lisa Lavender M.T.R., M.F.S.R., M.W.R.

I absolutely do not know “everything” and am grateful to learn new things every day. As I consider myself an operations person, my work is never done. I have learned and continue to learn from mistakes, others, and anywhere else I can find knowledge. As I continue to expand and grow, I keep saying: “It is just like running a restoration job!” I do not know if those that I work with are finding it obnoxious. However, I keep finding myself amused.

You may have heard of the best-selling book, “All I Really Need to Know I Learned in Kindergarten” by Robert Fulghum. You will find his first nine of sixteen thoughts listed below and see that they are quite profound:

“1. Share everything.
2. Play fair.
3. Don’t hit people.
4. Put things back where you found them.
5. CLEAN UP YOUR OWN MESS.
6. Don’t take things that aren’t yours.
7. Say you’re SORRY when you HURT somebody.
8. Wash your hands before you eat.
9. Flush…….”

At a glance, you can see the value of these lessons shared by the author.

I am still learning in my role operating a restoration company. The things that I have learned in restoration thus far have been put to good use in other ways — in restoration software, restoration training, and six years as a co-owner and operator of a professional arena football team. I also have had the opportunity to share what I learned with friends in other unrelated industries.

As I continue my career journey, I am grateful to learn, apply, and share some of the things that I have taken from my experience in the restoration industry. The following list has served me well thus far:

  1. Proactively Manage Expectations
    Customers, members of the team, and all involved are best served when we proactively manage expectations. We should train and develop our best practices around this concept.

    1. Be upfront and honest.
    2. Explain the process and/or experience: As we seek to master this in our organization, this applies to both “negative” and “positive” elements of the experience.
  2. Manage Projects
    Project management skills are essential to not only restoring homes and businesses but also executing anything that needs to be done. Projects should be managed efficiently and effectively by:

    1. Establishing a scope of work
    2. Setting timelines and accountability
    3. Budgeting
    4. Managing Resources – in-house and subcontracted
    5. Effective communications
    6. Orders of operations – i.e., critical paths
  3. “Start With The End In Mind”
    Stephen Covey nailed this one and it should be used as a guiding principle in all we do. We must have clear objectives and desired outcomes as we define the path and all the necessary steps. I learned to embrace this in restoration, and it is most helpful to keep top of mind as an approach to executing many tasks and projects.
  4. People First
    At the end of the day, our people in the organization are the greatest asset and make the difference. The right people, values, and leadership are always of the utmost importance to reaching goals. There are countless ways to develop management and leadership skills. There are so many opportunities to grow and develop. A good start is a true and genuine care for people which will propel you to continuously grow and lead you in the right direction. Even if you make mistakes, people who feel cared for and respected will stick together and rise to the challenges.
  5. Things That Get Assigned Get Done
    Be clear on expectations and assignments of responsibilities. The story of Everybody, Somebody, Anybody, Nobody reminds us of this important lesson:  https://www.youtube.com/watch?v=Wgucw8ZJijc
  6. Communicate
    This may be the equivalent of “Flush” in the kindergarten book. It is a vital element for effective internal operations, serving customers, managing resources, and even marketing and business development. Not just communicating, but good communicating and listening are critical.
  7. Best Practices 
    Clearly defined expectations that are documented and repeatable are important to create consistently excellent outcomes. Best practices can lead the way in supporting growth, accountability, and training.
  8. Be Resourceful And Never Stop Learning
    You never know what you need or what you need to know.
  9. Continuous Improvement – You Are Never Done
    The world is constantly changing and evolving. Accept that your work is never done and enjoy the challenges and the opportunities as you go.
  10. It Does Not Work If You Do Not Use It
    This applies to equipment, software, knowledge, and the NeoraFit Wellness & Weight Management System that I purchased.

May sharing the things that I have learned help bring you much continued Restoring Success.

Originally published in R&R Magazine online.

Harnessing the Power of Experiential Learning in your Training Programs

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restoration business planning
GlobalStock/iStock / Getty Images Plus via Getty Images

August 31, 2022

By Lisa Lavender M.T.R., M.F.S.R., M.W.R.
Training is an important function in any operation and is critical to our companies’ effectiveness and efficiency. It has a direct impact on our key objectives from profitability to customer service. For all individuals, training is critical to their success, growth, and morale. Field experience, on-the-job training, and apprenticeships are a few types of experiential learning that we likely already employ.

This holds true in all industries and professions. It is happening on an ongoing basis whether we are deliberate about it or not. You can draw a parallel to programs for electricians, plumbers, physicians, and our industries and professions. Can we better harness the power of this type of learning and improve our outcomes? Yes, we can.

In How to Train Someone From Outside or Inside the Restoration Industry, “experience” is part of our training process. Even if you are not proactively managing or executing experiential learning in your organization, it is happening and natural. Your organization likely already respects and values experience. It may be a requirement of positions that you are filling, or a qualification when someone is being considered for advancement.

Experiential Learning is an entire field of study in and of itself. There are many great resources readily available to learn more about it, Northern Illinois University, Center for Innovative Teaching and Learning provides the following overview.

You can relate to the value of experience when you reflect on your own professional journey, observe the team, or consider apprentice and intern programs. The concept applies to all positions and skills in your organization.

A few of the benefits of experiential learning are:

  • The more we do things the faster we get. This applies to a wide variety of skills from keyboarding, estimating, processing contents, or setting equipment in a water loss.
  • Learning is enhanced when someone can apply information in an experience-based format.
  • Our ability to troubleshoot and manage complexities often derives from experience.
  • Have you ever reflected on how you said something or handled a situation? Most soft skills are developed through experience and reflection.
  • Learning from mistakes is a cliché for a reason.

The following are some easy-to deploy tips to get the most out of your experiential training:

  • Define with trainees
    • Objectives
    • Timelines
    • Define specific experiences
    • Define specific skills and abilities to be gained
  • Assessments and Documentation
    • Mentors, supervisors, tools to check in throughout the learning processes.
    • Assessments can be utilized to both evaluate the outcomes and document the training.
  • Audits, QC, and/or Reviews
    • If using real work and jobs for training, develop checks and balances so that customers and the company are not impacted by a trainee’s lack of experience. A few examples:
      • Estimator — estimate reviewed by a seasoned estimator before submittal.
      • Water Tech — allow the trainee to set up the equipment, perform other duties, come back, adjust, and explain why you may have made changes to the set up.
  • Training Culture
    • Training Overhead: This is a consideration when your field trainers also have the responsibility for job profitability. Allow for the recording of extra time in the context of training to be recorded to an overhead account.
    • Name It: Give it a name and keep it top of mind. “We are always training and retraining each other in our day to day.”
    • Why: In our busy day to day, it is easy for us simply fix, correct, and forget to focus on teaching opportunities. I refer to this as finishing the sentence as it does not take long and can help others learn and engage them. Take the time to explain the reason behind your thinking. Example: We want to do it this way because…
  • Field Trainers
    • Train the trainers: Some are natural, some are in need training.
    • Reward and acknowledge, In A New Tech Under your Wing, you will find more tips and “What is more valuable than a great technician? A technician that can teach others to be as good or better than they are.” Celebrate those who teach and train in the day to day. 
    • Make it a job duty to be performed.
  • Use Kolb’s Experiential Learning Model 
    • A well-recognized approach to the experiential learning model was developed by David Kolb and provides some insight and understanding that may help you develop and formalize your programs. The article, Kolb’s Learning Styles and Experiential Learning Cycle, summarizes as follows, “Ideally, activities and material should be developed in ways that draw on abilities from each stage of the experiential learning cycle and take the students through the whole process in sequence.” McLeod, S. A. (2017, October 24). Kolb – learning styles. Simply Psychology. www.simplypsychology.org/learning-kolb.html

Experiential learning can take place in many different ways, and it can range from on the job, to replication and even using eLearning. To help you develop your programs, the following is a sample from RTI’s Digital Training Solution. It is defining the objectives of field experience for Water Tech Level 2 followed by a digital assessment which will allow a supervisor to determine if the expectations have been met and/or give insight to proceed with the team member’s development.  

There are many ways to create and innovate your approach to training. Share your tips in the comments below. May developing your experiential learning programs in your company bring you much restoring success! Developing people is one of the most rewarding things we can do.

Checking Your Work: Attentiveness to Detail as a New Year Initiative

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Restoring Success

January 6, 2022
Lisa Lavender, M.T.R., M.F.S.R., M.W.R.

It may be predictable, but there is something about a new year that inspires goal setting, resolutions and fresh visions. I have a personal list of things I plan to do to further develop myself in different ways: improving my effectiveness, efficiency and being more organized to name just a few.

The story of Santa, a toilet and a wrong phone number was told in “He’s Making a List” and emphasized the importance of “checking your work” with some tips for success.

My passion for “checking your work” on an individual and company level comes from the consequences I have observed, and experiences I have had, when this discipline is lacking. The concept applies to both our individual work habits and our company’s operational approach. We all make mistakes and even our best efforts may lead to errors.

We recently had a piece go out with a misspelled word. It was checked at least five times and our director of training operations proofs by reading things backwards to avoid missing a misspelled word. As a team, we missed it; it happens. Next, we examined the matter and developed our approach to checking. The program where the word resided was lacking editing tools; going forward, we will spell check in a different program with better editing capabilities.

Why such a fuss over one word? It is a reflection on our attention to detail. We are trainers and believe in setting an example in all we do. Is it possible that the 100 people who saw this error will think less of us? In the years of observing the fallout of not “checking your work” and being a designated checker, there seems to be a pattern of two possibilities: 1) gaining an understanding of how something could have been missed, versus 2) what seems to be a lack of care.

If you are still searching for a personal or companywide new year initiative, consider “checking your work.” Making progress on this can bring about great rewards. It is a very specific behavior of people who are highly conscientious, a trait consistently tied to positive performance. It is something that applies to all in the organization and can directly impact the credibility, effectiveness, efficiency and quality of service to others.

In addition to some of the tips offered in “He’s Making a List,” the following are considerations for the “check your work” initiatives in your organization:

  • Check your own work: It starts with ourselves. Whether rereading an email or examining our craftsmanship, we should establish habits to check our work, even if someone else will be reviewing it. Identify it as an important practice in our day-to-day work and coach those who may need to improve.
  • Provide training: Include steps that address “checking your work” during training. Do not assume. At Restoration Technical Institute, we incorporate this as a step in our training curriculum.
  • Measure and document outcomes: Whether in a standard of care, best practice or standard operating procedure, having a formalized process for certain types of work that includes a defined inspection and/or testing with supporting documentation of the outcome will give protection, as well as add to the credibility of the services delivered.
  • Be open to constructive feedback: It is important that when we check each other’s work and mistakes are made, identified and corrected, the spirit is positive. Avoid a potential debacle and treat it as an opportunity to do something better in the future.
  • Find a buddy: It is great to have buddies in the company to “check” everything from an estimate to a drywall job when you need fresh eyes.
  • Set clearly defined company expectations: It is difficult to check certain types of work without a clearly defined and communicated expectation. These expectations can be converted into checklists and quality control documents.
  • Establish clear assignment of responsibility: As a company, employ “checking” as a responsibility of a designated individual. For example, the “lead” on the job might be held responsible for checking the job site before leaving. Or, the marketing manager could be assigned the responsibility to check a mass email before it is distributed.
  • Formalized quality control processes and forms: There are certain tasks and/or job types that are suited for a formal quality control process with established control points. This provides consistency and is particularly helpful when there are many variables and/or details. Forms also provide documentation.

The Restoration Technical Institute is offering free access, through the end of January 2022, to our Audits, Inspections & Assessing course, designed to provide ideas and inspiration regarding inspecting, measuring outcomes and tools to help.

May “checking your work” bring you, the team and your company much Restoring Success.

Originally published at randrmagonline.com

The Resilience of Restorers

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restoration business development
January 7, 2021
Lisa Lavender, M.T.R., M.F.S.R., M.W.R.

“Smooth seas do not make skillful sailors.” African Proverb

If you are reading this, it is likely that you overcame challenges, learned new things, pivoted, showed resilience, supported others, and more, after navigating 2020.

Although challenges and change are inevitable as we journey on into 2021, we should move forward with a new sense of confidence and accomplishment. After all, you did it! You, your team, and your company did it! You navigated a year full of endless challenges and should celebrate the achievement.

There are possibly endless lessons and reflections that we can learn from and share as an industry. I look forward to serving on the R&R Panel, Lesson’s from Covid-19, presented by The Experience University, February 10, 2021, learning the lessons of others, sharing my own, and building a solid future together as an industry.

As individuals, companies, and as an industry, there were many journeys, challenges, lessons, and reflections of the year, 2020. As we move forward and start our new year energized, focused on goals, and ready to take on the challenges and changes ahead, I share a couple of thoughts to keep the momentum going strong:

  • Celebrate Our Purpose: Although there may be a wide variety of ways we communicate and lead each other as purpose-driven organizations, it is easy to lose sight of our true purpose in the day today. I quote a long-time industry friend and instructor, Ron Valega, who reminds classes, “We are not just sucking poop! We are giving people clean and safe environments.” Unite as a team and celebrate the new year and future with a deeper appreciation than ever before of the great works of the cleaning, restoration, and remediation industries. After 2020, we know now more than ever that providing clean and safe environments for people to do their work and live their lives is a noble, rewarding profession to be proud of.
  • Post-2020 Huddle: In What the CAT Just Happened, it is encouraged to post-CAT huddle with the team and evaluates what went well and what could be done better next time. Take this opportunity to gather input from every member of the organization to give ideas and input on preparedness and the identification of opportunities.
  • Opportunities: Take this opportunity to think big and seek opportunities. Ajay Pangarkar, CTDP, FCPA, FCMA’s article, 3 Habits to Innovate During a Pandemic gives a great deal of inspiration and three keys to seizing the opportunity. “While tragic, this pandemic is also a once-in-a-lifetime opportunity to do things differently; to think differently. Prior to the pandemic, you know “normal times,” you could have far-fetched innovations, but if they were too extreme, no one would give you the time of day. But guess what? We can now not only dream of far-fetched ideas but are actually encouraged to do so. You now have implicit permission to try anything even marginally viable and no one will hold it against you for trying to make it a reality.” says Pangarkar.
  • Perspective: It is an excellent time to calibrate a very important meter, your Perspective Meter. Calibrating the perspective meter allows us to focus on what is important, see opportunities, and appreciate all the good by which we are surrounded.

My own 2020 experience was filled with successes and mistakes. There were a few times I had a moment and said, “I don’t know! This is my first Global Pandemic!” I would quickly gather myself and journey on, surrounded by an amazing team, supporters, and friends.

As for the lessons, like many of us, I learned quite a few and look forward to sharing them. I do know one thing for certain, although I always feel a sense of gratitude towards my co-workers and colleagues, it is this year more than ever; that this gratitude almost overwhelms me as I know that I would not be prepared and energized as I am now for 2021.

As we reflect on 2020, we must remember there was no “playbook”. Be proud, you did it!

Originally published in R&R Magazine

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