Category Archives: management

Sales Is A Numbers Game!

What business activity makes the most $$$ for your company? I bet you didn’t say: ‘Sales!’ To most contractors, their total sales effort is no more than picking up a set of plans from a customer, estimating the job, turning in a bid, and then waiting for the results. They rely heavily on price to sell most jobs. As the economy has gotten worse, and work is harder and harder to get, many company owners have thought about how to increase their sales. Some have even decided to hire a salesperson to increase their revenue. But then what? These frustrated owners don’t know how to manage a salesperson to get the results they need or want.

Sales is easy!

It’s a numbers game. When competent salespeople make regular sales calls on good prospects who need what you offer, your company will get their share of the business. When you don’t make the calls, you won’t get the business. It’s like professional hockey. The team that takes the most shots, usually wins the game. The more sales calls, the more business. Simple and easy.

Most business owners don’t like to make sales calls. So they try to encourage their estimator to make them. Most estimators are not built to sell. They are built to analyze at a set of plans, use their calculators and computers, and put a price on a specified amount of work. Like business owners, estimators also they don’t like to get out of their comfort zone, go out and make sales calls, and spend a majority of their time selling. So, in tight markets, small business owners often want to hire salespeople to solve their lack of revenue problem.

Why do companies struggle?

A major reason small to medium size companies struggle is caused by a lack of a systemized and focused on sales and marketing plan. They mainly rely on their reputation to earn the right to be awarded enough work to make a reasonable profit. This works in good times, but not during a slower economy. Successful companies must have written sales systems and marketing plans that pro-actively and aggressively look for and attack new customers, targets, and contracts.

As I observe the successful subcontractors who our general contracting company use, there is a common thread. They have a plan to find and attract new customers and follow it diligently. Every week the come by our office as a part of their sales route to meet with our project managers, and build relationships with our people. They are always in the selling mode and ready when we have an opportunity for them. The majority of subcontractors wait until we call them, the successful contractors are already there waiting for an opportunity to attack.

A pro-active sales plan starts with a business owner or general sales manager who will hold their salespeople to a required standard of performance excellence. These required standards can include the number of calls per day, number of customer lunches per week, number of face to face meetings per week, number of proposals, and total proposal volume per month. To know how you’re doing, you’ve got to keep score.

Keeping score with salespeople is often difficult, as they tend to not want to be tied down to a set number of calls required. They like to let their instincts take them through the day. They don’t like to be held accountable or to a minimum standard, and don’t like to track numbers. They also don’t like to write, don’t like discipline, and don’t want to follow a written plan. They generally feel their gift of gab will get them through and reap enough results. But without numbers to hit, most salespeople will fail and not meet your expectations.

Sales numbers to track:
– The type of customers you want
– The markets you want to attack
– The project locations you like
– The project sizes you want
– The minimum fee per job
– Sales calls per day
– Leads from calls
– Face to face meetings per week
– Proposals from leads
– Proposal follow-up tracking
– Proposals or bids hit
– Referrals from customers
– Average job size
– Average profit margin
Continue reading

Last Chance to Register for the Profit Builder Circle Academy

Profit-Builder Circle Academy
July 26 & 27, 2012
Newport Beach, CA

Last Chance To Visit Me In California?
For those of you who have requested I hold my Profit Builder Circle Academy in California, here’s your last chance to get the 50% discount.

 

 

Day 1 – GET YOUR BIZ TO WORK!
The BIZ-Success Blueprint For Contractors.
Strategies, Systems & Structure To Grow & Make A Profit.

Day 2 – GROW YOUR BIZ!
How To Find New Customers & Win More Contracts.
Steps & Strategies To Overcome The Low Bid Process.

You’re Invited!
We will have a small group attending. So this guarantees you’ll get lots of personal attention from George Hedley. The cost includes a detailed workbook, a copy of his new book and 2 complete days with George who’ll teach you how to grow and make a profit.

The regular price is $1,997. But, for this July Academy, the cost is only $997. PLUS – additional attendees can attend for $297.

Register today – email leanne@HardhatPresentations.com for the brochure and registration form.

Fill The Seats Or Go Broke!

If you were the owner of a NFL football team, your number one goal would be to fill all the seats every week. To fill seats takes a multiple approach. You must put a winning product on the field and you must sell seats. Seats don’t sell themselves. It takes a huge effort to create sellouts at profitable ticket prices.

Over the last ten years, you didn’t have to sell very hard to keep profitable revenue flowing into your company’s coffers. If you put a mediocre team on the field, called the usual plays, and used an average business strategy, your customers would keep coming back for more, if your price was somewhat competitive. And because business was plentiful, you didn’t have to try to win over many new customers. You stayed focused on doing the same type of work for the same type of customers and your business grew. Because there was enough work, you also didn’t have to try different types of projects, customers, or contract delivery methods. In fact, you even prided yourself as a specialist in a very focused type of business niche.

Fast forward. Today it is hard to fill the seats, revenue is scarce, and customers are hard to find. Having a winning team doesn’t matter if they can’t find a game to play in. You’ve cut your overhead and reduced your expenses as low as you can to survive. You continue to bid more and more work against too many competitors at lower and lower prices. Now you are even calling on new and potential customers you really never wanted to work for. You’re trying to get on any bid list you can including public works, which you always avoided because of the paperwork and prevailing wage issues. You’ve assigned your office manager or estimator to cold-calling and emailing any lead they can find in hopes of a miracle. Nothing is working and getting new business at a reasonable price is next to impossible.

Now what? You’re thinking you’ve got to fill the seats with paying customers or go broke. If the sudden slowdown in the economy taught everyone one thing: ‘Putting all your eggs in one basket won’t work forever.’ Many contractors and business owners focused their efforts on doing only one kind of project and service for one type of customer. For example, to keep revenue and jobs flowing in, many focused on only building housing tracts, or shopping centers, or industrial parks, or custom homes, or office building interiors. Some focused on building for general contractors, developers, or home builders. Some expanded and did more than one type of project. But, most didn’t crossover into totally different or diverse types of work. And offering a service component to their revenue stream wasn’t even considered as they were too busy to mess with little jobs.

Multiple streams of income sells more seats!
A diverse business plan includes three types of revenue streams with many different types of projects per stream. For example, here is a partial list of the unlimited revenue and business opportunities contractors have to choose from:

Multiple Revenue Streams & Opportunities          

1. Contracts & Bids

Private Construction
Retail shopping centers
National chain stores
Industrial buildings
Manufacturing & factories
Metal buildings
Office buildings
Banks
Medical buildings
Hospitals
Self storage
Renovations
Interior Improvements
Utility Company Projects
Housing Tracts
Custom homes
Residential remodeling
Residential home upgrades
Residential replacement work
Site improvements

Public Works Construction
Schools
Offices
Hospitals
Facilities
Roads & highways
Transportation projects
Sewer & water projects
Storm drain systems
Plants

2. Service Work & Ongoing Accounts

Ongoing Monthly Or Annual Accounts
Property management
HVAC maintenance
Electrical maintenance
Plumbing maintenance
Landscape maintenance
Site service & management
Spring & winterization
Light bulb replacement
Roof service
Road and drainage repair work
Generator service
Energy management & controls

Repairs & Service To Fix Broken Components
Plumbing & mechanical repairs & upgrades
Window replacement
Tenant improvements
Tenant relocation
Carpet and flooring service
Building damage repair
Clean-up and debris removal

3. Wealth Building & Passive Income

Own income producing real estate

Rental homes
Apartments
Shops and yards
Industrial buildings
Offices
Shopping Centers

Own income producing businesses
Rental equipment companies
Wholesale materials
Supplier
Services Continue reading

5 ‘Must Do’ New Year Resolutions!

It is almost 1 month into 2012 and things are already moving too fast. Hopefully you took a few moments and wrote out your goals for the next 12 months. Written targets and goals will insure you get what you want by keeping you focused. Less than 20% of all business owners actually write out their goals. And guess what? These top 20% are in the top 20% of the most successful business owners in their marketplace. A simple way to start is to write out these 5 goals:

1. Don’t be an island! 
Get involved with a group of like-minded business owners to seek advice, share challenges, get invigorated, and get accountable with on a regular basis. Personally, I made a decision to join a structured weekly group of men who discuss their personal and professional lives facilitated by a top business/life coach in our area. Consider looking into joining one of our BIZ-GROUPS or a local group in your area. Bottom-line – do it!

2. Take time to plan your plays!

Bill gates said that the best thing he did while building Microsoft was to take his management team away on a regular basis to plan for the future. At these regular retreats they discussed their strategy, options, new opportunities, what’s working, what’s not, and what they need to do to achieve their goals. When you don’t plan your future, you get what the market gives you instead of paving your own path.

3. Innovate or die!
Your business won’t work doing what you did when the economy was growing. In a flat economy, you have to change your business and evolve into a new kind of profit making machine. What new customers, markets, systems, technology, people, production methods, contract type, services, and products should you add or delete from your business to grow fast. Sit down and rate every part of your business as: keep doing, stop doing, start doing, or change how we do it.

4. Revamp your calendar!
Your calendar says it all. If you want to save money, your calendar is full of job meetings, ordering materials, scheduling crews, and doing take-offs. If you are focused on making money, it’s full of time with loyal customers, new customer targets, networking, mingling with potential customers, and building relationships. At least 33% of your time needs to be with customers having fun and enjoying each other. Make it your goal to revamp your calendar and pro-actively grow your business.

5. Put yourself first!
When I coach business owners, we always look at the income statements to see how they are doing. I almost always notice that business owner pay themselves way too little for the time, risk, and work they perform. In addition, their investments are often slim or none. When you put other people, employees, and customers ahead of yourself, you can’t do the best you are capable of. Customers want to do business with successful people, not poor struggling people. Make a commitment to pay yourself what you are worth and start an investment program starting now. Then spend the rest on overhead and expenses.

Do-Over #2: Diversify, Market & Serve Customers Sooner Than Later!

When business is steady with lots of bidding opportunities coming your way, it’s easy to keep busy working for a limited number of customers doing the same type of projects. This business model works during a good economy. Once you establish a few repeat customers, they continue to feed you work to bid on. You don’t have to go out and find new customers. You don’t have to market or sell. You don’t need an updated brochure or impressive website. And you don’t have to have a customer service or follow-up program. Work is easy to get: wait for the phone to ring, pick up a set of plans, and go bid the job. If you bid enough, you’ll get your share.

The second most popular “Do-Over” I hear from seasoned business owners is they wish they would have built up a broader base of customers, worked on many different type of projects, and developed a solid marketing and referral program that delivered diversified types of profitable work. Today I hear sad stories of underground contractors who kept very busy only doing private housing tracts for a few homebuilders. I also hear similar stories from contractors who didn’t want to mess with government jobs because of all the added paperwork. And I hear stories from companies who didn’t add any extra services like green technology, design-build, post construction services, or maintenance to attract and keep customers. These companies are now left without any customers. Continue reading

The Business Do Over!

In sports, the coach gets to start over every season. Winning coaches look at their past records and make positive decisions of what they need to drastically change and achieve better results. If they continue to play the game the same as they did last several seasons, they won’t continue to build and win. They have to look at how they play the game, players, coaches, methods, offense and defense, training, strategy, and tactics.

Now imagine it’s your turn to start a new season. You are the coach of your business and want to keep your job and make a lot of money for the owners. What should you do differently to win the game of business? What tough decisions should you make? What new plays will you call? What players should you replace? Where should you play the game and how? Will you keep doing what you’ve always done or decide to do whatever it takes to grow your business and make a profit? Below is the list of the top “Do-Overs” I hear from the many business owners I have surveyed.

Do-Over # 1: Invest Sooner Than Later!
When your business was busy, you didn’t have enough time to stop and look for investments. And you were growing, so most all of your cash-flow went to fund your company’s growth. The snowball effect was keeping you excited as your business got bigger and bigger. It was like a shot of adrenaline as you did more and more work. The more you grew, the bigger you wanted to get. Volume is addictive, so you bid work too cheap and never missed an opportunity to grow or gain a customer. Everyone thought this gravy train would never end. Continue reading

If You Could Start Over, What Would You Do Different?

Think of all the decisions you made over the last five to ten years that affected your future and where you are today. Now think of all those decisions you didn’t make you wish you had. Remember when you were busy signing new contracts, getting plenty of business, trying to juggle all your commitments, scheduling crews, putting out fires, and doing everything you could to keep everyone happy? During this time it was hard to do everything you wanted to do. Continue reading

Low Bid Gets the Job In Public Work

In public works construction, the low bidder usually gets the job and there is little or no room for sales strategy or tactics. The best way to be the low bidder and awarded a contract is to have the lowest possible costs and the most efficient construction management and field operation possible. To keep your costs lower than your competitors, your field crews must be lean, productive, and well trained. There must be no downtime, job problems, quality issues, coordination conflicts, or mistakes. Your subcontractors and suppliers must also be supervised and managed tight without gaps in scheduling, productivity, conflicts, or quality. This can only be accomplished with diligent leadership, accountable management, and ongoing training focused on productivity and efficiency.

Now you are in the sales business!
In private work, it takes a lot more than just bidding and negotiating to win contracts. You’ve got to give customers a differentiating reason to hire your company. It’s not just about the price, inclusions, and exclusions. Now there are too many competitors who can do the same job as your company and will cut their bid below their cost to get a job. To win more contracts at your price, you must face reality. You are not in the construction business. You now have to also be in the $ALES business! Continue reading

Contracting is not just about construction!

How can construction companies increase their steady stream of ongoing reliable sales income regardless of the economy? What type of ongoing revenue can your company, employees, infrastructure, technical skills, reputation, equipment, knowledge, customer base, experience, or potential generate? Attendees of my two day Profit-Builder Circles come to learn how to get their business to work the way they want them to and then take them to the next level. As I look back over the hundreds of past attendees, the business owners who are the most successful are the ones who have two types of contracts, revenue sources, customers, and business models. They do both lump sum contracting work plus have a significant amount of their revenue come from steady ongoing service accounts.

These successful contractors don’t rely solely on bidding single jobs, one at a time, to generate most of their revenue. When you mainly rely on bidding or negotiating work to win contracts, your business becomes ‘fast and furious.’ Your business is either hot or cold, fast paced or dead, busy or slow, and you cant’ control your workload and your revenue isn’t steady or reliable.

‘Slow & steady’ business keeps your crews busy as the workload keeps on coming regularly over and over every month. You can count on a steady flow of work as annual service contracts provide ongoing revenue. With steady regular service accounts, you can plan your schedule, workload, and cash-flow.

Multiple types of income, contracts, and revenue sources compliment each other. This business model allows these type of companies who do both bid and service work, to become very efficient, generate steady workflow for their employees, and create wealth for the owners. But they require two different types of management, sales efforts, cost accounting, customer service, employee training, professional standards, and marketing efforts.

Steve is an electrical contractor who has two separate companies that work together. He has a new construction division that bids to general contractors and does commercial projects, large shopping centers, and office buildings. He has ten steady general contractor customers who typically give his company enough work to make a small profit during good times.

As an offshoot to his contracting company, Steve started an electrical service company several years ago that installs, services, and maintains back-up power generators for homeowners, commercial facilities, industrial plants, hospitals, government buildings, and offices. This company seeks annual contracts for all service work required to keep customer’s buildings electrified during power failures. This specialty service work includes design, engineering, preparing studies, permitting, new installation, repairs, maintenance, testing, fueling, implementing technology, and ongoing monitoring work to insure the generators will work when needed. This service business has grown as he has focused on acquiring new customers, providing excellent customer service, regular weekly employee training, and lots of sales and marketing to attract potential customers. Continue reading

Slow and Steady Wins the Race!

My wife and I get up every morning around 6 am, start the coffee, and together we read the Los Angeles Times and USA Today. Last week I was traveling to the CONSTRUCT show in Indianapolis later that morning, so I didn’t have time to read every news section I wanted to. But I did read one newspaper article which made me think about the typical construction company trying to do business in today’s tough and slower economy.

In California, total unemployment is predicted to reach ten percent or more over the next few years. Construction unemployment is almost double that sad statistic. But the monthly statistics which got me thinking even more, were construction permits issued in the State. Commercial construction permit dollar volume was down 66% and residential permit dollar volume was down 75% since the peak years of 2005 through 2007. This is a horrible situation if you are a contractor in California trying to keep your doors open and make a profit.

At several large construction conventions I have spoken at this past year, I have repeatedly heard shocking and similar sales figures from national companies who supply construction materials like cement, drywall, light fixtures, and lumber. Your state might not be in as bad of shape as California, but it does make you think about your business model going forward.

What type of company would you own?
If you were not in the construction business, what type of company would you want to start, buy, or own? Would it be dependent on the Federal government or your State to produce enough budget money to insure there was plenty of work for your company to bid on? Or would it be dependent on potential customers to ask you to bid plans and specifications against an unlimited number of competitors – qualified or not? Or would it be a business where you were awarded contracts based on the lowest possible price, regardless of your capacity, reputation, service, quality, or workmanship. Would it be a business where you do all the work and don’t get paid for weeks after you finish? Would it be a business where you do a great job and then the next contract is awarded based on the lowest bidder? Or would it be a business where you do a great job for a customer and then they may not have another job for you to bid on for a few years, if ever?

Being a contractor is a hard way to make an easy living. Or not! Most observers think contractors make a minimum of ten percent net profit and have all the freedom in the world. But the reality of our business is that as you may build a better and better company, you are really at the mercy of the market and customers to create opportunities to generate your revenue potential. In other words you don’t create your own future. You are at the mercy of others to decide to build and then give you an opportunity to present a proposal. Continue reading