Restoration Rewind

Delta Development Group Monthly Newsletter

February 2016

IBS Trade Show – Las Vegas 2016

By Michael Mastous

This marks the fourth year that Delta Development Group has attended the International Builders Show in Las Vegas. The show continues to be well attended by those in the construction industry. Jason Kaber our new VP of Business Development was accompanied by Caroline Hornback, the General Manager of our Northern Colorado office.

The three of us had the opportunity to meet successful new homebuilders and remodelers from throughout the United States. We even had a number of prospects from Canada and one from Nigeria.

Much of the written information about the construction industry prior to the show was that 2016 looked to be a flat year for construction overall. The current events throughout the world and the instability of the stock markets helps support this. Both the Chinese economy as well as the declining price of oil seem to swing US markets unlike anything we have seen

before. However, in talking to builders from around the country at the tradeshow it was by far the most optimistic tone we have heard in our four years at the show. The builders themselves are optimistic for a strong 2016.

Our mission, as it always is, is to find quality builders to add to the Delta Disaster Services franchise family. This year was certainly our most successful year. We met with two strong franchise prospects over dinner while in Las Vegas; we are now in talks with those groups. Additionally, we received over 65 leads from the show that we are going to continue to pursue. A special thanks goes out to Caroline Hornback. Her

presence and support at the tradeshow for three days was very well received by prospective franchisees.

There weren’t a lot of new items at the show that stood out. However I thought you might find this funny and might be a practical application for some of your customers?

Annual Convention Update By Ragan Neblett

Are you ready to come to Denver for our 4th Annual Franchise Convention? If you haven’t made your travel arrangements, the time is now. If you haven’t called The Golden Hotel at (303) 279-0100 to make your sleeping room reservations, the time is now. If you haven’t sent Ragan an email with your attendee RSVP information, the time is now! We are on the downhill to convention time; final details are being set in place and the presentation content is being finalized.

We can’t wait to see you all in Denver and share with you the excellent program that we have put together. Just in case you needed more great reasons to attend here’s two:

The Friday session with Mickey Lee on the IICRC standards of commercial mitigation has been approved with the IICRC and all certified attendees will receive continuing education credit for complete attendance to the session. We are also in the process of getting the session approved for RIA Continuing Education Credits as well.

If you have any questions about the agenda, presentations or anything else make sure to contact Ragan.

Please make sure to get your RSVP in by Monday, February 8 and we will see everyone in March.

CASH IN THE DOOR! Oh my…How could have we forgotten Cash in the Door in the January newsletter…Please accept our most humble apologies!

Ok, (drum roll please) the winner for NOVEMBER is (another drum roll please) Delta Disaster Services of Southern Colorado with just over $230,000 in the door!

-and-

for DECEMBER…Delta Disaster Services of Southern Colorado with $275,000 in the door!

WOW! Great job Emmis, Rosey and the entire team at Delta Disaster Services of Southern Colorado.

LEADERSHIP AND

MANAGEMENT FORUM BY Michael Mastous

Thank you to all those who attended or were virtually present for January’s Leadership and Management Forum. Building a successful, growing business is never easy. Although I am sure they are out there, I don’t think I have ever met any natural born leaders in my lifetime. Most of us have to learn and develop the traits that make us successful leaders.

The overall benefit of the Leadership and Management Forum is it gives our emerging franchisees a rarely found opportunity to have their voices and concerns heard. The old cliché, “it is lonely at the top” is very true. This forum allows us to discuss specific subject matter from a leadership management perspective.

This time together also gives everyone the opportunity to talk about specific concerns or opportunities that they are having within their own operations. Maybe “challenges” is a better word!

For those of you that are attending, I commend you! You are making another investment in your company and yourself. Your franchise team should be proud of the efforts you are making.

For those of you that are not attending either physically or by conference call, you are missing out on a wonderful opportunity to grow personally and professionally.

The forum is open to all owners and general managers, we meet once per month, on a Saturday at the Denver location. Please make a point to attend in the future if you haven’t already.

Delta Disaster Services Marketing Jason Kaber

Coming onboard I just completed my first four weeks with Delta and can say I am thoroughly impressed with all of the people and what makes Delta a great brand. I am looking forward to getting out to each franchise and learning what is working and what is challenging you with your business development. We had a great dialog at our last Thursday marketing call which was very helpful in identifying the trends that all franchises are dealing with. Below is a brief description of these challenges. I will focus on one or two every month and as we get more granular with them I will update with more solutions and subtopics.

Common marketing challenges Per our Thursday learn meeting we covered a number of challenges and possible solutions. Below are the results.

• How do we know when our referral has stopped referring? Keeping count of how many referrals each type of referral source is sending you, I.E plumbers, insurance agents, property managers. Setting up calendar reminders based on these counts or set an incremental time to review these numbers and identify potential loss of referrals.

One tool to help you with this, is the “Marketing Inactivity” report produced out of DMS. This report, of course requires effective data entry on your marketing calls and the referral sources for your jobs within the system, but this is a great report to see who has stopped sending you business.

Setting consistent follow up time frames may also help to determine if your referral source has opted to use someone else. Also asking pointed questions about the last project they referred to you and if they have had any feedback is another good way to get some information on their decision making process. Attempt to get a customer satisfaction survey for each job and review those results with your referral source, even if they are bad.

• How do we separate our services from other companies in over marketed

space?

90% of all your new calls or potential referrals will understand what you can provide upon your introduction. The challenge lies with how you can solve their problems better than your competitor. Talking to their pain points can quickly get their attention and earn you an audition. Below is a typical list of potential pain points.

o Failure, as the service provider to communicate effectively with the referral source and/or reactive not proactive responses form the service provider.

o Poor response times by the service provider to the project, the customer, and the referral source.

o Poor quality or work and/or customer service from the service provider o Service provider lacks the technology and savvy to work efficiently with

the referral source, customer, and insurance company.

• How do we prioritize marketing efforts? Prioritizing in general can be a challenge for most of us however, at least with marketing, some efforts have more value or closer dollars than others. The tough part is one size does not fit all. Each franchise territory will have its own mix of referral sources and lead generation events. Your current initiatives such as revenue growth, stronger brand awareness, or new target markets will dictate the value of each effort. For most, revenue growth will trump the rest of your efforts and should traditionally be where most of your time and energy is spent. From there you can review your efforts based on closest dollars earned or quickest return from each referral source type and build out a priority list of your efforts based on those results. Keep in mind a good mix of short, mid, and long term lead generation will ensure you a stronger, more diverse base of referrals versus always chasing the same dollar.

• How do we maximize marketing efforts?

Once you have prioritized your efforts, your second tier of planning would be to maximize your efforts based on the number of people you can engage per visit. An example of this is the weekly sales meetings held by all real estate and property manager offices. Presenting to these group meetings allows you to engage a large number of potential referral sources at one time and reducing individual meetings with all of them.

Another event to plan your efforts around might be contacting a vendor or supplier of equipment that your potential referral sources use. This can help by motivating them to promote Delta Disaster Services to their customers such as plumbers, carpet cleaners, or other mitigation only companies.

• How do we close for the audition/work?

Always be closing sounds so cliché but it can be so simple. Each communication with any type of referral source must have a desired result or action. A simple example would be a phone call, you could close a phone call by setting an appointment, scheduling a call back to a key person, or even a simple acknowledgement of your services. Each closed action either results in a further

action or the desired result. The key to closing often comes after a few communications have been closed upon and now you are ready to close for the work or the audition for the work. Asking the question on how you can earn their business might be your first attempt however, I would encourage you to be more pointed or specific when asking for work. Examples might be:

o What type of job was your last referral for restoration work and would we be considered for receiving this type of work from you in the future?

o How many of these projects do you refer a quarter and how many of those get completed in a timely manner?

o How do we audition for this work? o Do you have a small job you would like to try us out on? o Is there a job you need a second opinion on?

Do not walk away at your first answer or your first no. It typically takes three pointed questions to get an agreement for you to earn the work.

Follow up We have only touched on the tip of what we can learn from one another in regards to business development. Keep your ideas, solutions, and challenges flowing. One initiative of mine is to create a forum where each franchise can share or address marketing challenges with all the other franchises as well as document best practices and failed marketing efforts. Looking forward to working with you all.

The Money Corner By Dixie Feld

Finances. Compliance. Taxes. Money. Best Practices. Cash Flow. Work in Process. Gross Profit. Margins. Income Adjustments. Committed Contracts. Are these good words in your world? Bad Words? Just a whole lot of mumbo jumbo?

Are your finances in order? They need to be! Tax time is just around the corner… To prepare for this, your Work in Process must be adjusted to reflect your true sales, profits and margins. This is how it works:

You book the job as income (or create an invoice).

You do the work, you charge things to the job (subcontractors, labor, etc.) However, the job is not truly complete and all the costs are not in yet. There is still a subcontractor invoice to be entered in QuickBooks, there are outstanding credit card receipts, and one day of pack back still remaining.

Now you run a P&L for that job. Your income looks AWESOME, it’s 81%. Wow, you hit it out of the park. But what is missing? Obviously, the rest of the costs.

Adjustments must be made at the end of the year (or more often as you grow) to account for the percentage of completion (on open jobs) and your committed costs. The Denver office has a CPA who makes these adjustments. We also never create an invoice until the job is complete. Some phrases that might help:

Revenue, Income, Invoice, Receivable, Completed Work: This should be created in QuickBooks when the job is complete or “substantially complete”. If you create it before then, you are overstating your income, by accounting standards. When the work on the job is starting and you have your Xactimate estimate, an Estimate and/or Sales Order should be created in QuickBooks. Convert this to an invoice once the work is done.

Committed Contracts: This is work that you have signed contracts to perform. This is a real and good number but it is NOT income until the work is actually complete. If you book your committed contracts to an Estimate and/or Sales Order you can run a report of open estimates and you will know what your committed contracts are and what work

you have coming up. Work in Process are the jobs you have in process where you are doing work, creating costs, etc.

Margins, Gross Profit, Net Profit: Did you really make money on the job or not? These figures are the only way to know for sure. If your GPM on a job is 10% and your overhead is 25%, guess what? You lost money. True you made money on the job, but you did not make enough to cover your overhead therefore you lost money on the overall job margin! Gross Profit is the profit after a job is complete. Net Profit is what your profit is after accounting for overhead. Net Profit after Taxes is what is left for you after you pay Uncle Sam!

Hope this helps to clear up some of the mud! Now for another one of those words – Compliance: Your Franchise Agreement states that you must provide Delta Development Group with end of year financials. This package includes your company P&L and Balance Sheet. PLEASE have your accountant make your Work in Process adjustments prior to submitting these to us. PLEASE HAVE THEM TO ME NO LATER THAN FEBRUARY 15! If the adjustments are not made your Gross Profit and Net Profit will not be accurate.

And we will leave you with this…

Teamwork is so important that it is virtually impossible for you to reach the heights of your capabilities or make the money that you want without becoming very good at it. Brian Tracy