Category Archives: Planning

Bug ‘Em Til They Buy Or Die!

I bet you hate to make cold calls. Thankfully, over the last ten years or more, you didn’t need to cold call, market, or sell much to win your share of contracts or profitable work. The phone just kept ringing and you stayed busy. You also like it when potential customers call you with jobs to bid or propose on. This ‘old school’ marketing plan of letting your reputation speak for itself and waiting for referrals to grow your business used to work. Now it doesn’t.

In today’s tough work environment, that old school marketing plan doesn’t work. So in the new normal of less work and more competition, you need to make outbound sales calls and implement a marketing system to keep your pipeline full of potential projects to bid. The following is my simple marketing system that doesn’t require cold calls. Instead, it’s more like a form of that Chinese water torture you saw in the old movies — Drip! Drip! Drip! I call it: ‘Bug ‘Em Til They Buy or Die!’

‘Bug ‘Em Til The Buy Or Die’ marketing system:
1. Create Awareness Of Your Company
2. Pique Potential Customer’s Interest
3. Stay at Top of Customer’s Mind
4. Generate Inquiry
5. Get Belly To Belly / Face To Face
6. Convert a Bid or Proposal Into a Contract
7. Develop Customer Relationships
8. Get Referrals

The 8 step ‘Bug ‘Em ‘Til They Buy Or Die’ marketing system is designed to move the prospective customer through all eight marketing steps without a single cold call. The goal of this system is to get potential customers TO CALL YOU versus you calling them.

The ‘Bug ‘Em’ system builds an AWARENESS of your company and what you can DO for customers over a period of time. Drip! Awareness is based upon the ‘Rule of Seven.’

The Rule Of Seven
You must have at least seven contacts with a potential customer before they:
– Remember YOUR NAME
– Feel they KNOW YOU
– TRUST you
– Will TAKE ANY ACTION towards you

To grow both our construction and speaking businesses, we use the trusted U.S. postal service to make potential customers AWARE of us. Drip! We mail something to everyone on our mailing list at least 4 times per year. Drip! Drip! Once is not enough and we don’t just mail any old boring piece of mail. We send creative, different, unique, fun, factual, caring, and informative articles, photos, postcards, white papers, mini-brochures, checklists, and guides. We use a professional design firm to keep our image consistent. Orange and blue are our colors. Everyone recognizes our orange hardhat or our blueprint background on every piece of mail we send out. Drip! Drip! Drip! Now you’re creating and building AWARENESS. Everything you send out must do one of three things:

– Pique customer INTEREST
– Create a Perception of VALUE
– Reinforce customer RELATIONSHIP

To pique customer INTEREST, you must send out something different, crazy, funny, eye catching, bold or unique. You want to stand out from the crowd and make a statement. Try to be clever, creative, and fun enough to create the ‘WOW!’ factor. Never send those same old throw-away pens, ball caps, and notepads like everyone else. If you send out cheap stuff or tacky give-aways, your potential customers will think you’re cheap, have low standards, and not financially strong enough to handle their work. Send professionally created materials that consistently reflect your image. Quality counts.

Match your mail-outs to your customer targets. We use a newsletter that looks like a blueprint for our construction customers. But to attract bank investors we use traditional white stationary with blue ink. On a mailing to lawyers we sent out messages on legal pads and when we mail to meeting planners, we use a theme based on helping them make THEIR meeting a success. To attract investors for real estate development projects, we send out aerial photos of the neighborhood along with pictures and renderings packaged in typical real estate folders. Potential customers respond to the familiar.

To peak their INTEREST we also rotate mailing out cartoons, jokes, small hardhats, mini CDs or DVDs, estimating grid notepads, paper clip holders, coffee cups with hammer handles, business card holders, post-it notes, golf tees, golf ball markers, and American flags on the 4th of July! Once we mailed envelopes full of nails with the banner: “When can we nail down your next job?”! Last year I sent postcards from Maui, Hawaii with the note: “Thanks to my loyal customers for sending me skiing. I appreciate your business!” The best things to mail are items that pack flat, play big, and will not be thrown away. Don’t forget to put your name and logo on all of your ‘Bug ‘Em Til They Buy Or Die’ mail.

Only send what your customer:
1. Will READ
2. Needs TO KNOW
3. WANTS
4. WILL KEEP

Remember your goal is not only to create INTEREST, but to create the right kind of interest in YOU. Be sure that your mail creates the right perception of VALUE about your company ans how it does business. You have to tell your potential customers what you want THEM to REMEMBER ABOUT YOU. Don’t assume customers know what you know about you. To show potential customer targets we were more than a small “local” company, we sent out maps indicating our project locations covering a 100-mile radius. To show we were qualified in a new business market, we sent out photos and resumes of key managers with years of experience in this “new for us” area. To create the perception of fast service, we mailed out “On-Time Schedulers” and photos of projects with the headline: “Another Successful Fast-Track Project”. Decide what perception of VALUE you want to present to your customers and tell them about it – OVER & OVER & OVER! Continue reading

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

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.

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

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

The 8 Traits Of Great Companies! Traits 5 through 8

Competition | Pro-active Sales | Operational Systems | Investments
Part 3

Trait #5 – Set your company apart from your competition!
When I drive down the freeway and see contractors’ trucks, they often have signs on like: “Joe’s Electric – Commercial, Industrial & Residential.” I chuckle and ask myself: “What do they excel at, what kind of jobs are they the expert in, and why should I hire them?” Based on my experience working with tens of thousands of contractors, my best guess is they chase any kind of work they can get and don’t make a lot of money doing it.

Are you in the “Yes” Business taking any kind of job or project thrown your way? Experience shows that companies who specialize in a specific type of project or service do better work, are more competitive, have more loyal customers, and make a lot more money than their “jack of all trades” competitors. Perceived experts are the first called when a customer needs a professional to complete a tough or special project. Experts get the first chance to propose on jobs which require complex engineering or technical knowledge.

To set your company apart from your competition and get hired at higher prices, you must be the perceived expert in your market and offer more than your competitors. According to a survey from the Society of Marketing Professional Services (a national association of construction sales and marketing professionals), the top two reasons construction companies don’t get awarded projects are 1) Their inability to market and properly present the differences between themselves and their competition, and 2) Their lack of expertise in a particular project or service niche. When you continue to be and do everything for everyone, you won’t have enough time to satisfy your customers and you can’t make enough money for all the different types of work you attempt to complete. Continue reading

The 8 Traits Of Great Companies! Traits 1 through 4

Vision | Targets & Goals | Organizational Structure | Profits
Part 2
 
Trait #1 – Start with an exciting vision!

What do you want to happen with your company and where do you want it to go? Leading companies start with an exciting focused passionate vision connected to the specific results they want. Some companies have a vision to be the best company in their marketplace with the biggest market share. Others want to be known as the best service provider, provide the best quality, or offer the lowest price. Great companies ramp up their visions with more excitement. Exciting visions of great companies read like these: be recognized as the leader in customer service, being number one in building difficult technical projects, finishing jobs ten percent faster than our competition, or being known for helping customers make a profit. Bill Gates of Microsoft had a big vision to put a computer in every home. Ask the people who work for you and a few customers, “What’s the vision of our company and what are we trying to accomplish? If they don’t know, you’ll never become a great company. What is your passionate vision that will excite your customers and employees?

Trait #2 – Write and track your targets and goals!
After defining your exciting vision, specific results must be written down and targeted to quantify exactly what’s expected for your company, departments, people, and projects. For example, if your vision is to be the best service provider, determine what specific measurable results would enhance your bottom-line. Some targets you can track include obtaining a referral from every customer, only five percent callbacks, no installation errors, or 98% on-time completion. What specific targets and numbers can you shoot for to realize your vision & get the results you want? Without specific clear targets, your people really don’t know what ‘try to make ten percent gross profit’ or  ‘try to do quality work’ or ‘try to be the best’ really means.

What are your top priorities and specific targets your company is shooting for? You need to then monitor and track the progress if you want to achieve your company, department, and project goals. Ask your people what results are important. You’ll probably get 17 different answers if you have 17 people working for you. To get the results you want, write down and track your targets to get everyone on the same page from top to bottom.

Trait #3 – Draft your structured organizational chart!
Company managers and employees who don’t have written detailed job descriptions, don’t know what they’re 100% accountable for, don’t have authority to make decisions, and don’t have an understanding of the clear lines of communication in your company, can’t be held responsible for producing the results you want. Without a structured organizational chart and a list of accountabilities for every position in your company, your people will wait for their boss to tell them what to do next. This limits employee’s growth, enthusiasm, production, and efficiency. Plus it stalls the company so it can’t grow beyond the owner’s ability to make every major decision for everyone.

It doesn’t take a lot of time to layout your perfect organizational chart. Each position’s duties and responsibilities must be considered, detailed, described, outlined, and assigned listing the accountabilities and expected results desired and required. Only with these clear descriptions can people help the company grow and become great.

Trait #4 – Know your numbers and make big profits!
Many business owners are too busy to be bothered with watching and tracking their numbers. Can you imagine the CEO of a major company not focusing on or knowing their company’s revenue, direct costs, fixed costs, and profit? You can’t make a profit if you don’t know what to charge and how much you need to bring in. Many companies shoot for moving targets by attempting to make ‘as much money as possible’ or ‘more’ than they are currently making. ‘As much money as possible’ is not a target. ‘More!’ More than what? These are not clear targets or goals. 5%, 10%, or 15% are not clear targets either. As your sales and job costs vary each month, your total markup earned changes, while your fixed cost of doing business remains the same. This causes your net profit to move up and down like a roller coaster.

The owners of great companies spend a lot of time making people accountable to achieve the numbers. They set specific targets and keep track of the progress towards them. Annual sales of $5,000,000, overhead target of $600,000, and a net profit goal of $200,000 are specific fixed targets you can shoot for and hit. Not More! Not as much as possible! With specific targets for sales, costs, overhead, accounts receivables, cash flow, and net profit, you stay focused on the lifeblood of your company.

The 8 Traits Of Great Companies!

Earn More, Work Less, Live Life!

Good news! Now is the best time you’ll ever have to take a hard look at how your company does business. Why wait? When you start a company, you’re happy getting some work and making a little money. Then it grows into the company it is today by doing what it does relatively well for the few customers it has acquired. As an expert on entrepreneurial companies, I can tell you this is not the right way to design and build a great company that maximizes its’ potential market share, resources, people, and bottom-line profits.

When studying market-leading companies, you’ll find they have eight traits that make them stand out and stay at the top of their field. Make a list of top companies who are leaders in their marketplace. Your list might include: Apple, Caterpillar, Wal-Mart, Microsoft, McDonalds, Ritz Carlton, BMW, FedEx, Forbes, Star-Bucks, or Google. What sets them apart from the rest of their competitors and allows them to continually maintain market share, growth, and profitability?

Owning a company that offers the same basic services or products as most of your direct competitors will keep you busy during good economic times. But as the economy struggles or shrinks, business becomes more difficult, harder to grow, and make a profit. Especially when you offer almost exactly the same thing as most every other company you compete against. In order for your company to become the leader in your marketplace, you have to offer something unique or different than your competitors do. You also have to be passionate about your vision and where your company to go. You need organized systems and a professional management team that consistently delivers the same results for your customers every time. And you must be clearly focused on hitting your targets, goals and financial numbers. With these characteristics, your company will make an above average profit margin and have extra funds leftover to invest in wealth building opportunities.

IS YOUR COMPANY GREAT?
Take this True / False Test to determine if your company has the eight traits of great companies.

1. Our company has a written passionate vision that is prominently displayed for all of our customers and employees to see. Every manager and employee knows exactly what the company stands for, its’ values, and where it’s going.

2. Our company has written targets and goals for the overall operations, each department, and every project. These goals are tracked every month so adjustments can be made quickly.

3. Our company has a structured organizational chart clearly describing the accountabilities and responsibilities for each position in the company. Every employee knows exactly what they’re responsible to do and is fully accountable to make it happen.

4. Our company owners and managers are focused on achieving the numbers required for the company to hit its’ financial targets and goals. Our company makes a very large profit compared to the industry average and our competitors.

5. Our company has a unique or different delivery system, product, or service that attracts customers who will pay more to buy from our company than our competitors.

6. Our company has an ongoing, systemized, and pro-active sales and marketing program to find, contact, attract, retain, and service our customers. Our sales and marketing system has allowed our company to grow at least fifteen to twenty percent, or more per year.

7. Our company has written operational systems and procedures for all employees to follow that insure all workflow is completed in a similar standardized manner by all employees without exception.

8. Our company’s bottom-line delivers significant excess profits that allow us to seek investments and find opportunities to grow and build our equity and wealth. Continue reading

Me, Myself and I

The best advice you can get is from outside, unbiased professionals who know your business, can give you real opinions of how to improve, and are not afraid of telling you the truth and hurting your feelings. I founded my commercial construction company in 1977. After only seven years in business, I had built up to 150 employees and we were doing $50,000,000 in annual sales. I thought I was doing great (and knew everything there was to know about business) for a young thirty-five year old. A friend suggested that a company board of directors could help me take my company to the next level. So, I asked five very successful businessmen to be on my advisory board of directors. At our first meeting, I proudly presented my goals, financials, and plans for the future. I then asked for their input. One by one they proceeded to rip me apart and ask questions I couldn’t answer.

Their laser-like questions included: 

 “Is that all the money you make for the risk you take?”
“Why are you only doing that type of work?”
“Why is your employee turn-over so high?”
“Why do you do so much of the work yourself?”
“Who else on your management team do you review the financials with?
“What is your plan to improve profitability?”
“What new customers and markets have you tried in the last year?”
“Why are you afraid to let go of major decisions?”
“Do you have a strategic business plan?”

These questions and many more made me feel really stupid and about two feet tall. I couldn’t answer any of them with good answers. I thought I had done fairly well building a company with me as the leader. But my inner circle and executive management team consisted of just me, myself, and I. And, I had obviously missed the boat on many major issues required to become VERY successful and VERY profitable. Does this scenario sound familiar to you? Are you alone making most of your strategic decisions. Do you continue to do business the same way and expect better results if you work a little harder?

Get some help!
My advisory board recommended I hire a professional management consultant and coach who specialized in helping construction business owners grow and make a profit. They also recommended I quickly work with the coach and my management team to draft a strategic business plan before I made another dumb decision. After several days of mourning and shock from the reality of the board meeting, I took the advice and decided to invest in the future of my company and get some help. I hired a construction business management consultant and coach who helped me look at my leadership style to become a better leader and analyzed our management team to determine who were valuable assets to our long term growth. He also reviewed and improved our overall operational systems, standards, and procedures to help us get organized, systemized, and more in control.  In addition, he reviewed our numbers and give us advice on how to make more money. After getting to know our company, he then did a great job at facilitating our two day strategic business planning workshop. I could have never made the moves and changes I needed to make without the help, advice, and pushing of an outside person who had no agenda except to make me and our company better.

Think about some of the steps you can begin to take to improve your business.