Southwest Airlines is one of the only profitable airlines flying these days, and one of the main reasons is their use of standards across their business. For example, Southwest operates short hop flights in secondary cities, has the quickest turn-around time in the industry and only flies one type of plane, the Boeing 737. This means they only have to worry about purchasing, maintaining, equipping, training, flying and buying parts for one kind of airplane, and it works.
Remodelers are doing the same
Over the last few years I have seen a lot of contractor advertising for fixed-price remodels; $9999 basements and $3000 kitchens come to mind. I think the idea is brilliant for a few reasons.
- You can buy, warehouse and deliver a limited inventory which drives down overall costs.
- By limiting the product, you can perform more jobs each month, which increases top line revenue.
- Any upgrades are premium-priced, which helps with margins.
- Easily marketed
- More jobs going at the same time
I have to imagine this can work outside of the remodeling category too, but you have to be a bit more creative…and willing to say no to jobs that are not part of your company’s core competency. Tough to do in a bad economy, but still an idea worth considering to some degree.