|
Your target market is the
people or businesses that want the type of work done in your three most
profitable categories. Who they are depends on your categories. If room
additions are your most profitable category, your “perfect customer” may be
a married couple living in a home valued at $800,000, two children, 2 cars,
income of $300,000 + a year, 1 dog and 2 cats, wife in the family way and
needing more room. If bathroom remodels are most profitable, your “perfect
customer” might make over $150,000 a year and lives in a home at least 10
years old, etc.
With an idea of the
demographics you want to reach, there are any number of companies available
that allow you to build the mailing list you want by selecting the
demographics that are important to you. Take the time to define who your
“perfect customer” is, and aim for them.
Ramp up or start advertising
You have your perfect customer in mind, and now you must figure out how to
get their attention. You want them to know you are in business, ready and
available to help them solve their housing problems.
Depending on how you want to advertise, there are any number of qualified
professionals in your area that can and will help you put together a
campaign to get the attention of the customers you want. Your job is to find
that professional. One of the things you should always check is whether they
have worked with a construction related business before. If they haven’t,
keep looking.
When you find a qualified person to help with your advertising, you also
need a talented graphics artist you can deal with directly. Make sure that
whatever you pay to have developed, whether it is advertising copy, logos,
pictures, whatever, it all belongs to you to do with as you wish. Never let
yourself be put in a position where you have to go through one person or
company to get changes made. If you decide it is time to move on to another
professional, you are free to do so with your entire advertising portfolio
in your own pocket.
One of the biggest mistakes you can make is to write your own advertising.
Plain and simple, it seldom works. Why? Unless you’ve been trained in
advertising, you probably know as much about it as your perfect customer
knows about replacing the lead closet bend in the bathroom. Do what you do
best, and pay the other guy to do what he does best.
Construction has some unique challenges when it comes to advertising. The
buying public can be very demanding of contractors, expecting them to do a
lot of work for free. That includes estimating jobs for free and providing
homeowners all the information they need so they can do the job themselves.
Those aren’t the customers you want, but those are the customers you’ll get
if you use the word “free” in any of your advertising. Your focus needs to
be on people who are willing to spend the money to get a good job at a fair
price. Make sure that’s what your advertising will attract.
Write a business plan
When you decide to own a business, it needs to be a business, not a hobby.
I’ve upset some by describing a hobbyist as the guy that is working on jobs
with the tools, doing what he likes to do, while his wife works outside the
home to pay their bills. I take heat for that characterization, but doesn’t
it fit? Zig Ziglar says his mom told him, “If you're in something, get in
it. If you're not in it, get out.”
If you’re in, make a plan so you know where you are going. A business plan
takes a lot of thinking and is a lot of work. It is a roadmap of where you
and your company are going. Now, you can write this plan longhand or be
smart and use a software program to help you do the job. The best software
we have found is Biz Plan Writer, which you can review at www.brs-inc.com.
When your business plan is complete, you have your road map and know which
way to go.
Develop / polish your sales skills.
As you are working on your business plan, you need to start working on your
own sales skills. Even after 50 years in this business, much of it spent
selling, I still work on my sales skills every day. You should do the same
as the construction business and its products and services change daily. You
must be able to convey a positive message to your potential clients about
the things you can and will do for them. That takes constant study and
practice.
The most effective, productive salespeople are paid straight commission.
Likewise, if you are the company owner and are making sales, you should be
paid a commission as well. That serves a few purposes.
It is one of the best methods I know of to encourage your sales skills. If
you are paid when you have sold, built and collected a job, you will work
harder at making those sales. It keeps you focused.
And it establishes a budget for your personal salary. Far too many business
owners believe that because they own the company, they have the right to
take any amount of money out of the company for their personal use that they
want. Technically, that is true. Your company, do as you wish. However, a
company can only support so much salary for the owner. If you budget your
salary as a percent for management, a percent for sales, your company will
be more financially stable.
So, you say, how do you set that amount? Figure out how much money you want
to make each year and then if you have been in business less than four
years, divide that number by .08 or 8%.
Example: You want to make $75,000 for the next 12 months. Divide $75,000 by
.08 and your company must sell, build and collect $937,500 in business to
support that $75,000 commission. If you don’t get that amount sold and
built, scale your commission back to what the company can support. Trust me,
this will keep you focused on what is important.
If you have been in business over four years, you might be able to pay
yourself a little more, say 10%. Your numbers then become: $75,000 ÷ .10
(10%), or your company must sell, build and collect $750,000 in business to
support that $75,000 commission.
Putting yourself on straight commission will solve many problems in your
business and again, keep you focused. Our book, “Profitable Sales; A
Contractor’s Guide” reviews these issues and many more and it is one of the
few books written specifically about sales for those in construction.
If you want to move from the world of making a living to the world of making
good money, we have given you a good place to start. Determine what jobs are
most profitable and focus on them, then define and start advertising to the
market that wants those jobs. Develop your business plan and work on your
sales skills. There’s plenty to do - will you do it?
Next time we will talk about estimating your work, using the telephone and
taking leads from potential customers.
|
