Approaching the end of the year is the time to look back and see how we did in business in the year 2005. In the last two weeks of December, or between the holidays when perhaps life is a little less hectic, it pays to sit down and evaluate what went right and what went wrong during the past year.

Before I go into the process I use, let me mention that I run a one-man operation, which I started in 1988 in one of the most populated and affluent areas of the country, so I now have the luxury of only working for repeat clients and their selected referrals. As you'll see later in this article, I'm also temperamental and opinionated, and if someone treats me one iota less than the professional I consider myself to be, they'll be treated the same way back or better yet, they'll be sent elsewhere. If you started your business last week, it's likely that many of the things I will describe here are not yet parts of your business life, so please keep my circumstances in mind. I also have no desire to grow my business in terms of the number of employees, which determines the kinds of projects I undertake.

Starting to look back

I start the yearly evaluation process by pulling out all the job jackets from the "Finished Jobs" folder and listing the names of each project on a clean sheet of paper. I normally work on about 50 projects per year, so it's likely that I will remember all the names and faces associated with these projects. The second column will have a simple check box next to it. If I check this box, that means that I had a pleasant experience with the client, both in terms of personal contact and profitable end results. This check also means that I will happily work for this client again. If a check is missing, the evaluation needs to continue. There always will be clients who are not very warm, but the project went without a glitch, and money's been made, we shook hands and that's the end of it. This client will get a check with an explanation.

I had a recent experience with a couple for whom I worked a few years ago, and they bounced a $2,000 check at the end of the project. After about a week, the husband brought a check by but failed to offer any meaningful apologies or explanation. The check cleared, and life went on. I felt personally hurt and insulted by this behavior.

Earlier this year they called again for a small cabinet in their new house. This time they received the fill-in project status, which means that I worked on their project when I had a few minutes, and I was in their neighborhood. It took six months to complete the project this way. Clearly, due to their treatment of me years ago, I had very little concern about their opinion. The price of the cabinet also reflected my attitude as I remembered clearly how betrayed I felt when that final check bounced, so I made sure this time that my costs were compensated for by their deposit payment. They wrote a glowing "thank you" note at the end, the project was finished for the big holiday bash, and life once again has gone on. This client will always get work from me, but under very different circumstances and conditions than some others.

"Never again" clients

Now we arrive at the client who gets no check mark at all. These are the monsters that eat our money and also our soul. I put the word "client" in singular in the hopes that you have only one of these this year. I have very few nowadays, but when I started out, I always had one or two who got the note "never again" next to their names.

Working for regular repeat clients diminishes the exposure to people who are just unhappy in life and make everything and everybody around them unhappy and miserable. With time and many tribulations you will develop a gut feeling for these folks and be able to filter them out earlier and earlier in the timeframe of a project. In the past, I rejoiced in sending them to my competition, but now that I know many of the other shop owners by name and face, either through the Cabinet Makers Association or through other venues, I just send these potentially troublesome folks back to the Yellow Pages.

The other kind of "never again" client is the one who needs a lot more time in evaluating. These are perfectly nice folks, whose project went sour entirely due to me. This is the situation that needs a lot of soul searching and research. In most cases, the initial estimate was poorly done, normal procedures were not followed or overridden to make an unreasonable time expectation work. Sometimes it happens that I take on work that is not in my everyday profile, thereby moving away from the known and comfortable to a new territory, and sure enough, I run into situations related to a learning curve, which jeopardize not only my ability to make a profit but also my existing, very valuable connection with a client. The existing, returning client is the best source of business in the long run and the most valuable asset any business can have. To jeopardize a relationship that took years to develop is like cutting your own throat.

Honest assessments

This is the place to be brutally honest and admit mistakes and either develop a new way to avoid them in the future by working out the procedures in the system (additional money, or raising the price is very seldom the only cure for mistakes of this kind) or abandoning that line of work, which is what I chose to do. My forte is built-ins, entertainment centers and libraries, not kitchens, as was made brutally clear to me earlier this year.

By developing this list and reading through it multiple times and understanding its meaning, you will be able to see a clear picture of where the projects are that are profitable. The list can include the type of project, the location within your area, heck, even the professions or party affiliations of your clients. (I'm in Washington, D.C., hint, hint.) It makes sense to cast your bait where the fish are.

Why I don't work for builders-People sometimes ask me why I'm so adamant about not wanting to work for builders and remodelers. There is a simple reason: money. Let me explain.

I know plenty of people within our profession who have systems in place to achieve financial success (the only reason to be in business, remember?) by working for contractors of all sorts. I'm not one of them. I think too many of us have the tendency to want to build boxes and install them and remain tradesmen or craftsmen, instead of facing the true reason for having a business, which is to make money. The moment some integral part of the business, in this case the sales, is handed over to another party, much of the control of the business is also handed over to another entity. Yes, they may supply you with the work you can do, and they may even make you rich. However, they will also expose you to the ups and downs of their own business, and the moment their business falters, yours will, too. And by then, you're no longer at the controls. Imagine tying your sailboat, which is perfectly capable of handling the Sunday traffic in the bay, to the Titanic. Yes, it's a fast ship and can pull you across the ocean much faster than you ever dreamed, but you also have no control over its navigation. And when the big ship goes down, so does yours.

Offering solutions

Another aspect of this situation is the fact that I don't intend to compete with anyone on price alone, and when cabinetry becomes a commodity, it also brings in competition from close and far. My business is focused on providing a solution to my clients. They come to me wanting to find a solution for their library, not to buy eight or 10 boxes with doors or shelves. Cabinetry is a part of the solution, but only a part, not the total service. By providing a service and bundling cabinetry with all the other aspects of the project, I demand the pay of a professional businessman, not a craftsman. I try to give a solution as close to turnkey as possible. My clients are professionals whose time is valuable, and the less time it takes for them to accomplish the buying of a new wall unit, the happier they are, and in turn, they pay much better. The more professional my solution and the system that delivers it, the better my prospects are for a higher return on my invested hours and skills.

Would you like one more reason for not wanting to EVER work for a builder again? How about those Porta-Potties in August in Washington?

No more comment necessary.

Happy and prosperous New Year!

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