Markup & Profit

Tuesday, October 30, 2007

Getting Your Phone to Ring, Part 4

One of the things we've heard over and over again recently is, "We don't have any leads coming in. Our phones are dead!"

When I ask how they spend their time, almost always their focus is on building jobs. When the market gets tough, your focus must be on sales. You can be the best mechanic in the world but if you don't sell jobs, you have nothing to build. That is the reality of our industry today.

Brian Tracy said, "The key to success is to focus your conscious mind on things we desire not things we fear." If you desire a profitable business, you must get out there and sell.

Let's take a look at some of the ideas sent to us by other readers.

First, from my buddy Sonny Lykos (this is also posted on our blog):

"One of the reasons Michael offers a free newsletter is the same reason others do. It's reading tells the customer or potential customer that its author is an expert in his/her field."

"Several months ago I stopped sending my own one page, 2-sided newsletter I created on my word processor. Nothing fancy; only information. I stopped it due to the large numbers of calls I was receiving from it. Some of the people that called said things like: 'Mr. Smith received your newsletter and made a copy for me. Can you come and give me an estimate on some work I want done? You seem to be the caliber of person we need.'"

"If anyone's interested in doing the same, email me and I'll email you back with a couple of copies to give you an idea of it's simplicity and contents. It was a quarterly newsletter that only took about 1/2 to 1 hour to create since I used the same format for each issue. It was snail mailed and emailed to them. I also kept several copies in my truck to give away to neighbors of my customers."

Sonny Lykos, Construction Solutions Systems, Inc.
Naples, FL

I recently spent the day with Sonny as he made his rounds. He does, in fact, carry copies of his newsletter with him and is ready to respond to any request by a customer for more information about his business.

And another note from Brad Stearns, whom we also quoted last week. This guy is full of ways to promote his business, and they work. He is as busy as he wants to be. What downturn?

"Thought I'd relay another strategy I use to create more business with an example. I asked and was approved to be a vendor for a local elders service agency. As we boomers get older we will need many more services – especially with the rise of efforts to keep seniors in their homes. My first request was to meet with a man about patching a 'Top hat size' hole in an asphalt driveway so that no one would trip on it."

"When I arrived at my appointment I was actually met by a group. It turned out that the driveway was shared by a group of condo owners all 70 and above in age. I was there for several hours putting together plans to rebuild several porches, replace rotting wooden gutters and fascia (which we are very experienced in), and repairing numerous small safety and security needs. In the end, conversations turned to the possibilities that when we're done with the outside work before winter we could discuss new kitchens and baths. Not bad for a day's work that started out as a small quick asphalt cold patch job."

"I wanted to provide this example for another reason. While we are very busy, I here the same complaints you hear about how slow it is and getting worse. Since we are so busy with new leads and business, I've been intrigued why I see lots of work available and others don't. So I started to ask non-referral prospects about how they found us and why they called us and not someone else. 'I couldn't find anybody' was the most common refrain. Our yellow pages book has 13 pages of contractors, so it's not a shortage of contractors. I began asking why they couldn't find anybody. The answers were very telling of our industry. The consumer couldn't figure out what the contractor did because either:

  • His marketing message was not clear
  • He claimed to do it all like 'you need what repaired? I do that' which makes people distrustful
  • The consumer didn't know how to locate one or (here's the best one)
  • They couldn't find someone who KNEW HOW TO LISTEN."

"The last one is a huge issue. I can't count the times when I went to a prospect's home, let them speak and walked away with a job."

"And of course you know the other complaints: Appointments were not kept and calls were not returned."

"You already know some of the ways I make myself available to be 'found' but one of my favorites is yours: hand out a minimum of 4 business cards a day!"

Best, Brad

I could not have said it any better, Brad. (With the exception of the business cards - 4 is a lot of pressure, I recommend a minimum of 1 business card each day!) Returning phone calls and showing up on time for appointments is just as important as placing ads anywhere, direct mailing your stuff or even making phone calls to potential clients. Brad is a great example of someone who gets out and gets it done instead of sitting back and complaining.

One more comment about Brad's note. He commented that ads that say, "you need what repaired? I do that," make people distrustful.

That gang, is exactly why I have said over and over again. Don't try to be all things to all people. Pick three things you do well, three things you know you can make a profit on and pass on all other work. Stay focused on what you do best.

Now from Odus Sweetin, some thoughts on radio and newspaper advertising.

"A tip you may share for low priced advertising sources. Seek out the new and upcoming radio stations, little existing station completely changing their format, community newspapers, community news inserts in a larger newspaper, etc., for low cost ads in your target market. Some of us are small businesses. We do not need a great number of leads to meet our planned production goals."

"Normally you will find that if you start the media source off and become loyal, lots of deals come your way first. An example locally is our local online news. When it started out, it was a long time group of downsized/phased out primary newspaper editors. Obviously, they would have a great following. A yearly ad in a prime location was $750. Then it went to $950 as readership increased. If you started with them in the early days, your costs are the same now. New advertisers for the same space now pay $1,950 per year."

"In advertising, one thing is the rule; big is better. It generates more leads so we have a lower cost per lead. If we must be big, we can be bigger with the smaller costs."

Have a good day,

Odus has a great idea, especially as a long term advertising strategy. And as Morris DeShong discussed last week, long term advertising is much more effective than hit-and-miss.

Last week, I also mentioned the importance of a website. We've been asked for ideas on quality websites for construction companies - I'm going to list a few of the ones we've seen and admire.

Roy Kennedy sent me a link to his web page. Notice on Roy's site that he has a section on Home Tips. Additionally, he makes it easy for his customers to sign up for his newsletter.

Another example by Dennis Gehman, who also offers a newsletter. Notice also that Dennis has a focus on just the work he wants to do.

I've talked about the importance of having a website that loads quickly. Check out Burgin Construction. Brad and Rhonda do a great business and they get many leads through their web site.

Here are more impressive web sites from companies we know:

Note, Michaels other three parts will be available soon.

Monday, October 08, 2007


Time Management is one of the most misunderstood and most abused elements of our business lives.

There are three basic uses of time in your life. The first, and by far the most important should be the time with your family. Do you want more time with your family? Then let's look at the second use of time - Donkey work.

What is "Donkey" work? It is the time you spend chasing your tail, doing things that will not increase your bottom line, and in fact might cost you money.

Not delegating is a major problem with most contractors that I've spoken to across the country. Here is where my Cardinal Rule # 4 kicks in. You must put your ego in your pocket and trust that someone else can do a particular task as well or better than you can. Doesn't make any difference what the item is, if you can find someone else to do a given task. . . . "Delegate". Even if they can't do the task as well as you, big deal. As long as it is done adequately, that should be good enough. Too many people in this business get hung up on the idea of "we build great quality into all our jobs. That is what we are known for!" Yes, but others can provide quality work for you. "Delegate".

Delivering materials to job sites. Oh the pain of it all. Millions of dollars are wasted each day by the owner of a construction company running around delivering materials to job sites. If you are doing that, you are wasting not only your time and money, but it should be ample warning to you that you have not delegated responsibility for material procurement to someone on the job site as you should have.

And, now my favorite subject to rag on some of you about . . "Working On The Job With The Tools"! More millions are wasted here each day also. Put the tools away and run your business. The best you can ever hope for working with the tools is to make a living. Maybe, if you're young, have lots of smarts and know what you're doing, you can make a good living. Bottom line, you will never make any money. Physically you can't work enough hours, nor can you bill enough hours each week. If you are over 35, you should have all the education you need on how to build a given job. It is time now to put the tools away and run your business. A good rule of thumb for time management in a construction company is that the owner should spend 50% of their time on marketing and advertising and 50% of their time running their business.

Now I know I'm going to get some squawks from readers that don't believe this, or are convinced that they must be on the job site. So, those of you that have been to the M & P seminar, and have put your tools away, or have started to put the tools away, would you send me an e-mail and tell me what your profit picture has done since you put the tools away and started running your business? I would greatly appreciate the input. I know a bunch of you promised me in class that you would put your tools away and you have. We would love to put feedback in a future newsletter to show what happens to company profits when the owners start running their business instead of letting their business run them. Thanks for the help here.

Ok, so what is the third use of time? It is staying focused on "Making a Profit ". Everything and anything else you do in your company is "Donkey Work". No, you probably don't want to hear that, but it is true. If you are not focused on making a profit, then you are focused on "Donkey Work".

Forget about "being competitive", that is an absolute money loser. You must be profitable. Forget about delivering materials to a job, delegate. Forget about working with the tools, hire it done.

Forget about sitting in coffee shops or association meetings with your buddies. That is time you could be spending on a whole laundry list of things for your company. And last but not least, forget about "donating" your time to associations or other groups (unless it is with your family). Donate your time to your family, they are the most important "business" you have.
Do these things and watch your bottom line grow to the minimum 8% net profit.

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