Return on investment is a complex calculation when applied to our employees, tougher still when applied to ourselves.
In this countryâs continuing immigration debate, one âsell lineâ of certain reform advocates goes like this: âAll weâre proposing is a fair system for granting citizenship to undocumented workers who want to build a life in this country, most of them by doing jobs that Americans donât want to do anyway.â
While I strongly favor immigration reform, I disagree with pretty much everything about this politically charged statement. And the thing I find most disturbing is that last bit about âjobs that Americans donât want to do anyway.â
While itâs troubling to me on several levels, what speaks most directly to our purposes here is that it runs counter to what many of us grew up hearing from our Depression era-raised parents: âQuit your complaining and be thankful youâve got work in the first place!â
Secretly, everybody harbors dreams of easy money. We hope to discover the hidden treasure, to get the big payoff, to create the invention so simple yet so outrageously profitable that we canât believe no oneâs thought of it before â or, failing all of this, to buy the winning lottery ticket. Iâm as guilty of such dreams as anyone â and I donât even play the lottery!
When we return to reality, each of us knows in our hearts that success requires commitment, hard work and an insatiable interest in our vocation. That interest pushes us onward, keeps us engaged in the little things and allows us to see the bigger framework to which those little things contribute.
In our business we hear a lot about âreturn on investment,â especially in relation to the money we spend on equipment.
Returning to the example of undocumented workers for just a moment, some reformers argue that the low wages these residents accept are an excellent return on investment for the people who hire them.
But have we really come to the place where we think of people as nothing more than equipment? Where weâd rather characterize some work as being beneath us âworthy citizensâ because saying so is the politically expedient way to sell changes everybody knows are inevitable â no matter what Lou Dobbs might be blathering about?
I hope not.
I think all of us â regardless of our country of origin â would benefit grandly by looking at the work we do from the standpoint of how it serves others and as a necessary part of that larger framework I mentioned. Only this time, Iâm referring to a global framework.
Whether the particular âlittle thingâ we contribute is curing disease, harvesting food, sanding a tabletop or creating a great work of art, we all have important roles to play. The more we can see the truth in this, the less likely we are to marginalize a particular vocation â or group.
Often, when doing or hearing about a task thatâs bound to be less than pleasant, Iâll joke, âThatâs too much like working!â It usually gets a laugh, but at the same time, in its amusing way, it defines the task as something most of us would rather not mess with.
But some of us (fewer and fewer it would seem, if we believe the way some are framing the debate over undocumented workers) hunker down and do it anyway, because we know it comes with the turf.
It may be firing an employee, sanding a kitchenâs worth of cabinets, taking the trash out or putting down roofing on a hot day. Whatever it is, if it contributes to the larger success we visualize for ourselves and our families, one day we can look back and see that it was just one step; one small investment we had to make in order to realize the larger return we were seeking.
But some have trouble visualizing that larger return, let alone appreciating the character-building pluses of sustained effort. All they can see is a task theyâd rather not do, one they want somebody else to do â preferably as cheaply as possible.
This is why it is so critical to choose a vocation that we care about.
If what you do all day long feels too much like working, rest assured: Youâre not doing what you were put here to do. And you wonât be very good at it, either.
Similarly, when you care about what you are doing so much that it keeps you searching for new ways to do it better, smarter, more efficiently and to the benefit of everyone who works for you and with you, it will almost never feel too much like working.
Will there be moments when you question your purpose? Sure.
But 95 percent of the time, you will know that youâre doing work that fits who you are, and youâll bring to that work the confidence that comes with knowing your persistence will eventually pay off.
So you need to decide: Is what youâre doing too much like working?
Anthony Noel owned and operated Noel Custom Woodworking for 15 years. He is now a consultant helping custom shops with the business of woodworking. He has written for the magazine since 1994. Past articles are available at www.iswonline.com.
My reply to Seth Walterâs question about finding a better way to pre-qualify customers, which appeared in the June issue, prompted the following notes from readers wanting to share their own strategies.
I just read your answer to Seth Walter in CWB. Good tips, I use some of them myself.
Hereâs another one Iâve had success with: I do a quick board-foot calculation in my head (rounding up, of course), multiply it by a rough B.F. price for the species, take an educated guess on what the finishing costs are going to be, and say something like, âSo the wood is going to be around $1,200 and the finishing another $900. Weâre up to $2,100 and I havenât touched anything yet. Are we out of the game?â
[This strategy] separates out the folks who are going to be shocked pretty quickly. And for the real clients it shows them that you know what youâre about and gives them an idea of where the dough goes.
Scott Ernst Custom Woodworks
La Cueva, NM
Hey, back atcha, Scott, and thanks for writing!
I like this approach as a quick way to pre-qualify buyers, but it also does more than that: It distinguishes between tire kickers and serious buyers.
Thereâs a difference between a buyer who can afford what you make and one who is ready to buy now. The nice thing about this tactic is that it puts a pre-labor number in their head, so if theyâre not ready now, theyâll have an idea of what theyâll need to have on the table in order to be ready.
To readers who are thinking of using Scottâs approach, one word of caution: Avoid the temptation to figure out an âaverageâ labor-to-materials ratio and tack it on, in order to give the customer a âmore completeâ rough estimate. If you throw out a number that includes labor, theyâll try to hold you to it.
Use the strategy exactly as Scott does, and be sure to emphasize that even the materials estimate is subject to the vagaries of the lumber market.
Curt Andersen, owner of The Country Woodworker in Green Bay, WI, also shared some of his process:
[I] give them an estimate (or guess-timate) based on past working knowledge (you should have some idea if you are keeping track of your time and other costs)...If they say [they want to move forward], I explain how the system works: First, the estimate. Second, the proposal (or two or three, depending on bells and whistles). Then, once the options are clear, I give them the bid.
Once that is done, I have them pay a deposit for the drawing work, if they want it. I occasionally work just from sketches and the customers are happy with it. I always give the drawings to the customer, since they paid for my time. If they want lower quality, fine...those are bad customers anyhow. Good riddance.
Once they understand the drawings, they sign the contract. But they MUST understand the drawings completely. Some customers are shy about admitting that they just canât read blueprints. I explain that some of the smartest people I know canât read them because of brain wiring. Itâs like being left-handed, blue-eyed or being able to throw a really fine spiral pass. Some can and some canât.
Make sure the contract spells out the payment schedule. I use a three- or four-payment schedule, depending on the size of the job.
If the job is huge, I consider using an escrow account set up at the customerâs bank. That will protect you and the customer in case of a dispute. They cannot stop paying you, and you cannot take the money without finishing.
Personally, Curt, Iâve always resisted letting the drawings go. But I agree that if you must, you need to get paid for them. My problems with letting them go are (1) practical and (2) what some might call esoteric and selfish.
From the practical standpoint, I want the job, pure and simple. I donât want to make it easier for some other shop to come in, knock a little bit off my quoted number and get the work.
More esoterically, I find it hard to put a number on the intangible of creativity. And, selfishly, itâs my design. My attitude: Let the prospective customer start again from scratch, because thatâs what I had to do when designing the project. (I warned you that itâs selfish!)
All of that being said, though, the key thing is that youâve done what Iâve always encouraged readers to do: Find a system that works for them. What works for me doesnât matter, any more than you should care about a competing shopâs hourly rate. Their costs are theirs, yours are yours, and as you say, if youâre keeping track of them, you know what you need to charge.
Thanks, Scott and Curt, for sharing your ideas!
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