Tips for improving your business.

Question: With spring and summer approaching, what should I be doing to get my crews ready for the coming season?

Answer: It is a good idea to plan ahead. Let’s focus on the basics.

Recruiting: Now is the time to recruit. Hopefully, you had some winter work and used this capacity to attract people when times were slow. Even if you are not into your busiest time period, now is the time to begin to look for workers. Searching in July and August is too late. By late summer, everyone worth his or her salt is employed. Run ads, do some fishing for employees and see what you can catch.

Foremen: Don’t just think of how many employees you need. Try to figure out how many foremen and field leaders you have. Too many contractors go into the summer season with an unrealistic view of how much work they can do. They have one foreman they can depend on, another who is technical but undependable and maybe a third that is dependable but inexperienced. Yet the contractor seems to feel he or she can run a dozen people and it will work out just fine. In reality, the summer is total chaos with constant juggling of crews and people. Take a few moments and plot what your company will look like. Make some realistic plans and don’t assume you will be able to hire all the field leaders you need. In today’s tough labor market, your organizational restraints should help design your marketing plan.

Equipment: Remember that scrimping on supplies and materials may cost you more money than you save. I know tools and supplies are sore subjects for most contractors. You might feel as if you have bought enough electrical cords for a transcontinental power line but when your employees need one, not having one costs you money. Employees lose, break and maybe even permanently borrow things, but $20 an hour is 33 cents a minute. You can quickly buy almost any tool cheaper than pay for people to stand around or to go to the supplier to get what they need.

Seasonal Helpers: Too many contractors have no plan for summer employment. Finding college kids, immigrants and others is not as easy as it once was. Starting wages and competition for these employees may be better than you think. If the local coffee shop is paying $8 an hour, your advertising at $7 is not going to bring a lot of success. If you are looking for students, you also need to go electronic. Most colleges and even some secondary schools have Web-based employment boards. The net has changed the way people look for jobs and young people are leading this charge.

Question: It seems like jobs are cheap at the beginning of spring and get higher as the season goes on. Is this my imagination or are contractors really that cheap early in the year?

Answer: Contractors are that cheap. Pricing should fluctuate according to demand. That is why roses are not discounted on Valentine’s Day. I meet contractors in class who brag about how they are sold out six months in advance. This is not a good thing. A good rule of thumb is that once you are booked out six weeks or so in advance, raise your prices. Call for an estimate in March and contractors will beat your door down. Call in August and you are lucky if you can get anyone to show up.

Question: Winter cash flow has been tough. It seems like cash is good in the fall and early winter. Is cash flow a seasonal issue?

Answer: It can be. As you hire more people, start up more jobs and do more work, your cash needs grow. That is why sales growth increases cash needs. Combine this with the fact that spring prices can be low; cash can really be tight even though work has picked up. Focus on spring jobs that have a quick cash cycle. If you think cash is going to be tight, be patient and fight the urge to load up with cheap work.

Question: What type of marketing should I focus on for the spring?

Answer: All types of marketing will work in the spring because demand is high and interest peaking. Start with your own customers. Why? To get to them before someone else does. Marketing to your own customers will always bring the best response. The longer you have been in business, the more valuable your business and the customer list.

Try to tie the timing of your promotion to the season. Focus on “spring fever.”

Question: In the past you talked about farming neighborhoods and targeting your advertising. What do you mean by targeting?

Answer: Too many contractors focus on their own friends and market to their neighbors and acquaintances. This is a natural evolution from the moonlighting or side jobs a contractor does prior to officially starting his or her own business. The business just seems to evolve. Whether you are selling cars, doing roof jobs or simply mowing lawns, the first rule of marketing is to go after the people who are most likely to buy from you. For contractors this is driven by three characteristics:

Income: The more money the person has, the more likely they can afford to buy from a real contractor instead of a moonlighter.

Profession: Some folks are just too busy to do their own work. Others do not know how. Others are too old. Identifying avocations and professions can help with this. Many corporate executives and professionals are busy. Long hours, tough travel schedules and growing lifestyle demands make time a valuable commodity.

Type of home: If you cut lawns, you need a neighborhood where lawns and keeping up with the Joneses is important. If you paint, you want to avoid the vinyl siding areas. If you roof, you need to identify houses that are 15 years or so old and need a new roof.

All of these characteristics describe a neighborhood. In the past, I have discussed the importance of “farming” neighborhoods. Focusing your marketing into certain areas will improve your response. It will also help your efficiency. You can do an estimate while checking on a job. Referrals will increase because more and more people in the area know you. As a contractor, you may not be able to afford to market to an entire area and you may not be able to serve the whole area, use common sense to identify where to target your efforts.