What will you accomplish in 2026? Will you drive your company to the success you deserve?
As we wrap up 2025, we are reflecting on our successes, setting our goals for the coming year, and thinking about our sales strategy, our marketing strategy, pricing, production, and the customer experience. It is a great time to focus the owner of a company, the leadership team, and the company as a whole on ways to drive profitability through our people and our processes. Here are some strategies to do just that.
Why Driving Profitability Matters To Your Company
Profitability is one of the most important goals for any business and a measure of the success of the business owner. A company that consistently is profitable provides for the
owner, creates opportunities for all on the team, can invest in training and technology to ensure a great customer experience, and can sustain itself through challenging times.
It should be the goal of every business, after paying the owner an appropriate wage, to still yield a 10 to 15 percent net profit. So, the first step is creating a budget for the coming year that will achieve that objective.
What are the Drivers?
For a successful wood flooring company, there are several critical areas that drive that profit performance:
• Marketing
• Sales (Including samples and estimating)
• Project Preparation (Including design, ordering and scheduling)
• Production (Installation or Sanding/Finishing)
• Accounting (Both on company profitability and job profitability)
Leading the Team to Better Performance
When I get the opportunity to work with companies at their locations, I like to engage the entire team with particular focus on these questions.
• What is a win?
• Why does it matter to each of you that we win?
• What gets in the way when we don’t win?
• What can each team member do to make a win more likely?
When the team aligns on the answers to these questions, we can foster a culture focused on being a winning company, not just in terms of finances, but also in terms of reputation, customer satisfaction, opportunities for employees to grow, and the ability to create
beautiful work.
Some of the most important tools for accomplishing this are clearly defined roles and responsibilities, key performance measures for each position, and a culture of accountability. Companies that do these things well give their team members the best chance of understanding their role, developing their skills, supporting other team members, and measuring their own performance. They know how their performance impacts the company’s ability to “win” and are able to adjust when their performance needs to improve.
Leaning the Team Through Better Processes
Often times, we have the right strategy, a good reputation, a capable team, and we still struggle to perform as well and as profitably as we would like. Business owners would do well to look at their processes, find waste, and embrace the notion of continuous improvement as part of their culture. We see the benefits of better processes in that they are lower in cost, put less stress on the team, and create a better customer experience.
When it comes to process improvement, we want to do more than just look at all of our processes and brainstorm ideas. For this, I like to use LEAN methodology, about which much has been written and it is relatively easy to start implementing. LEAN was born out of the Toyota Production System and is a very methodical approach to continuous improvement
that engages the whole team and recognizes that the best ideas for improvement come from those who are actually doing the work.
Key steps toward continuous improvement include:
• Select one process (or one segment of a process) to focus on based on the impact it would make on the business to improve it, the control you have to change the process, and the ease in making a change in that area. In other words, we look for the low-hanging fruit.
• Next we map the current process (what we actually are doing) step-by-step, recording how much time each step takes.
• Then, we identify waste in the process. This includes such things as waiting time, time
spent reworking mistakes, excess movement of people and materials and other such things
that are in the process but don’t bring more value to the customer.
• Then we brainstorm the future state by asking, “In a perfect world, what would this process look like?”
• From this we choose improvements to make and monitor their impact.
Think about your long-term goals, your commitment to profitability each year, and how you can drive your profitability through your people and your processes.
Doug Howard is the president of Growth Team Strategies, based in Sykesville, Maryland. He specializes in helping wood flooring contractors develop strategic plans, streamline processes, improve profitability, and navigate growth. For more information, email him
at doug.howard@growthteams.com or visit growthteams.com.
To learn more from Doug Howard, check out his Competitive Edge courses in the online NWFA University at NWFA.ORG/NWFA-UNIVERSITY/.