STRENGTHEN YOUR BUSINESS
by Michael Stone As we see the threat of nervous consumers and negative news about the housing industry, we want to share steps you can take to help your business succeed. These steps are followed by people in this business who don't just make a living, they make good money. Generate Business Nothing happens in this business until somebody sells something, and it starts with you. Advertise, take the sales call, and help your customer buy what they need. Calculate how much was spent on advertising to generate how many phone calls. How many of those phone calls turned into good leads - how many of those leads turned into sales. With that information, you can determine how much to spend on advertising to reach your projected sales volume. Make this the year you abandon the old myth that you can work by referral only. Find someone to help with your marketing efforts. Do what you do best, hire someone else to do what they do best. After you generate leads, you need to sell them. Pages 100 to 112 in the Markup and Profit book layout one of the best approaches to selling. It works, but only if you use it. Customers that use it almost always report more sales and larger profits. If you are only getting small jobs or if you keep hearing "we want the lowest price" or "we are getting five bids", something is wrong. Be sure you are contacting and working with the right market, and that you are using a professional sales approach that can handle those comments. Our sales book and video discusses how to approach many of these comments when you are on a sales call. Make It Profitable Using the correct markup on your job costs will assure you of the correct sales price for your work. You need to make enough money on your jobs to not only cover all your job costs, but also cover all your overhead expenses with a 8% minimum net profit if you want to staying in business. Anything less than 8% means that you are not charging enough for the work or service that you provide. This is not a practice round. You have to do it right the first time. You won't get a second chance, and no one will volunteer to pay the bills that accumulate when you don't charge a fair price for your work. Minimum markup for remodeling would be 1.45, preferable 1.50 and higher. Minimum markup for specialty work would be 1.35 to 1.45. Minimum markup for new home construction would be 1.25 and up. Many of our clients building new homes are marking up job costs times 1.30 and higher. Get paid for what you do. Build the job efficiently. Get your job layouts down to a science. Be affiliated with subs that pitch in and help you get your jobs built. Pay them fairly. Have a system in place to get jobs started on time, built and completed on time and to the letter of your contract. Also have a system nailed down to handle change work orders and problems that arise with or from your customers. Have your employee manual read and signed by any and all employees. Let nothing slip through the cracks. Act Like a Business Return your phone calls. Michael's # 1 Cardinal Rule for Contractors -- Return every call the same day or by 9:00 am the next morning. You never know which phone calls are from potential customers. If you know it's going to be a difficult phone call (an unhappy customer, etc.), we'll talk about the need to . . . Be Responsible Excuse making is a favorite pastime for some contractors. They don't want responsibility for anything they do. They want to be paid to do the work, but if something goes wrong, they cry, "It's not my fault!" and run the other way. Many customer problems can be avoided when contractors return their phone calls and do what they say. Customers don't understand how things go together or what stuff costs. They call with a question and often get ignored. Now the question becomes an irritation. Do this once or twice to a customer, and over the course of a job the irritation grows. Finally, they get angry and find reason to call their attorney or file a complaint with some state agency. Now you have to respond. Wouldn't it have been easier to just return the first phone call? Stop making excuses. If something isn't right, fix it. If the customer doesn't understand why something is the way it is, communicate with them (professionally, of course). Take responsibility for your business, your employees, and your subs. Make Every Appointment, and On Time Your first promise to your customer is when you make an appointment. An appointment is a promise that you will be there, and on time. If you don't keep that promise, how can they know you will keep future promises? Your customer deserves to be treated with respect. Aren't they are the ones writing the checks?
Did you know it doesn't take any more time to be late than it does to be on time to an appointment? True story. Surprise your customer and be the only contractor that shows up on time. You will be amazed at the impact on your business.
Don't Try to Fly Alone Find a good coach and use them. We do. We have one of the best coaches for coaches available. She has helped our company immensely. Mentors, groups, networks and associations are fine for gaining ideas, but you may or may not pay attention to what is said or suggested. When you pay for advice, you will use it. Our clients listen, pay attention and do what we ask them to do. As a result, we have helped our coaching clients generate on average just over $30,000 in extra profits in the past year. Can you do that on your own? Rationalize and/or procrastinate all you want, but the question will always be there...how much more could you have made with the help of a good coach? Give us a call. Remember There is More To Life Make time for your family. If you want to stay healthy, make sure your business is not the most important thing in your life. Are you running your business, or is it running you? If you are working more than about 50 to 55 hours a week, it is running you. Stop here, and read again the comments above about getting help. You need to make a conscious effort each day to do the things successful people do. Make a plan, generate business, make it profitable, act like a business, don't try to fly alone, and remember there is more to life. One day, one item at a time. Michael Stone has more than three decades of experience in the building and remodeling industry. His new book, Profitable Sales, A Contractor's Guide was released in May of 2007, he also wrote the book Markup and Profit; A Contractor's Guide, published by Craftsman Book Co. Michael offers Coaching and Consulting services for construction companies throughout the U.S., as well as audio and CD programs for business management, and is available for speaking engagements. He can be reached by: e-mail: michael@markupandprofit.com
phone: 1-888-944-0044
website: www.markupandprofit.com Copyright (c) 2007 by Construction Programs and Results. All Rights Reserved. No part of this content may be reproduced, distributed or transmitted in any form or by any means, nor may any part be stored in a database or other electronic retrieval system, or any other website, without the prior written permission of CPR. | 
