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Columns

Measuring Up: Tips for Improving Your Business

July 31, 2002
If you think change is easy, go home tonight and get in on your significant other’s side of the bed.

Question:I have been in business for almost 20 years and I am getting discouraged. It seems harder and harder to make money. I will be 50 this year and don’t know what to do. It seems like my workers make almost as much money as I do. Any suggestions?

Answer: First, you have to be willing to change. I mean really change. If you think change is easy, go home tonight and get in on your significant other’s side of the bed. See what he or she does. It’s not a big deal — geographically, it’s only three feet of difference. But just wait and see how this goes over. My experience is that only when you have bottomed out will you make those tough changes.

There is no way I am going to be able to ensure your success in a 10-minute article. Our basic tapes are very helpful and you can find them at www.proofman.com. The bottom line is: You have to get the basics right — financial, production, and sales and marketing. Let’s take five minutes and direct it at what we can do.

Start over. I know this sounds hard but if you have eight employees and only trust four to work hard, then build a company with four people. Pick up the tools yourself and get out in the crew. Do whatever it takes.

Raise your prices. You are better off doing less work and making money on what you do. A 5- to 20-percent increase in prices can go a long way to make the numbers work. By raising your prices you will also be able to identify the areas where people are willing to pay your price and you can make a living. It is always better to shrink and rebuild than try to grow to solve your problems. It will take a little time but you can do it.

Start building a brand name and loyalty. Your best leads will be generated by referrals and if you have been in business 20 years, you certainly have some name-brand build up. But if you don’t have your name on your trucks, haven’t used job signs, etc., you may have been working for 20 years but people do not even know who you are. Take your customer list and start mailing to it. Build on your customer base.

Question: I have a foreman who is difficult to get along with. He makes me lots of money and the customers love him, but he can’t seem to get along with the guys. It seems like his whole crew is about to mutiny. Any thoughts?

Answer: Lots of really great craftsmen get frustrated by those around them. There can be a lot of different ways to approach this issue. Here are some questions you have to ask yourself to help determine what direction to go in.

Has he always been this way? If the person is suddenly a difficult character, a drug issue, health concern or personal problem may be responsible. A trip to the doctor might help but a little investigation is in order.

Can you restructure the crew so that he works by himself with fewer people? Some people who are difficult work best alone. This may or may not solve the problem, but it worth considering. I chuckle when I think of the cantankerous old tradesman no one could work with so we gave him a helper who spoke very little English and they got along for years.

Have you tried to manage the situation? Some of these guys are hard workers and our goal is to take the pressure off, not add to it. Being a good manager is not just about correcting the poor performers; we also have to keep the good guys in line. With some employees you have to kick their butt and with others a simple pat will do. Some of our best performers can be perfectionists and our role is to take the pressure off, not add to it. It may be frustrating, but letting the person vent to you once a week may really help the situation.

Have you considered outside counseling? Good foremen are hard to find and maybe a good local counselor could help him work through his issues. A few hundred dollars spent on counseling might be a wise investment. I know you shouldn’t have to do it, but you may be costing yourself more money by simply getting rid of the guy.

Question: I used to do mostly residential work and have been trying aggressively to get into the commercial market. It has not worked very well. I have been calling on businesses for 60 days, but I have gotten little work.

Answer: Why don’t contractors blink during business sales calls? Not enough time. The motto, “Here I am, super contractor, give me a job,” doesn’t cut it. Be patient. Business-to-business selling is about relationships, not jobs. Just because you call on someone does not mean they need you that instant. It can take six months to a year before you see significant results with business cold calls. It may take four or five calls to have a chance to obtain some work. This is why it is so important to target the people that are worth investing four or five calls. One of your first goals is to establish a list of potential clients and to diligently call on them. It takes persistence to win at this game. Don’t get discouraged; just make sure you are pointed in the right direction.

What kind of questions and discussions do you have with potential business customers? Your goal in the beginning is to understand how they buy things, not sell them a job. Your objective is to tell them a little about your company, but more importantly, find out something about them. The local hotel manager might let you take him or her to lunch and visit three or four times before you find out that the contracting decisions are made at the regional office 200 miles away. Getting to the decision-maker is not all that easy and takes some detective work.

Consider a conversation something like this: “I am Monroe Porter from Acme Contracting and I wanted to come by to meet you. I want to apologize for not doing so before. My goal today is not to sell you anything but rather to tell you a little about our company and find out a little about your organization and see if there is a fit.”

You also need to remember that if they are a major buyer of contracting services, someone else is already doing the work and it will take time for you to have a chance to get your foot in the door. That other supplier values their account and will not go away without a fight. You must also appreciate that this middle manager or buyer is not going to risk their career by easily giving you a huge job. They may test you with a small job and want to check out your references and company. This all takes time, so be patient.

Good accounts will take time to develop. The more potential the account has, the harder it will be to get your foot in the door.

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