8 Ways to Supercharge Your Business in the Construction Industry
After many years of success as a home builder, one of the more common talks I give is to subcontractors and vendors on growing their business. I often hear the question, “How can I increase revenue without spending a fortune or selling my soul?”
I’m here to tell you that you can increase revenue without selling your soul or spending a fortune, and, it takes some direction and concentrated effort. When revenue “magically” goes up, it is usually a function of the market or luck. Both of these factors are not something to count on consistently. You need a consolidated plan that constantly pushes your organization to move forward.
A large misconception is that it takes monster marketing budgets to push your income up. Most good marketing consultants would even agree that spending money on things like ads, social media, SEO, etc. is usually the wrong plan at first. Spending it on getting some help with direction, identity, focus, message, as well as a host of other things is key. In my experience with my clients, we can usually double revenue pretty quickly with minimal cash. It is about time investment, repetition of followup, and commitment to making it happen.
One of the first items we work on is an organized plan of attack that is repeatable and scheduled. There are no “what should I do now” moments. Instead, “It’s Thursday at 2pm. That is followup time with previous clients to ask for referrals.” The phone is picked up and the calls are made to the predetermined list. It is systematic. At this point, it becomes about statistics, not thought. The more activities you do, the more business you will generate. The beautiful thing is that even in a down market, this works. Even better, secure all of the clients/customers you can now so that when the market turns, you can keep all of them as well as pick up new business from the competitors around you that will be dropping like flies. Which brings me to my next point, “If you want it bad, you will get it bad.”
When I say that you don’t have to “sell your soul” to get new business, I mean you don’t have to discount heavily, change who you are (assuming who you are is good and needed in the market), sacrifice your ethics, or bow to the customer’s every whim. Companies that want business so badly that they are willing to bend in these areas, get treated just as badly on the other end usually. There is no loyalty either way, customer to company or company to customer. Most companies costs for products and services are similar. Our free market society drives this. Unless you have innovated a new way to do things, if your price is lower, you are typically sacrificing one of these things:
- Margin: If cost is the same and your price is lower, margin is lower. This leaves less room for errors. One screw up on an order, delivery, or other component of your business and you inch closer to losing money.
- Quality: If your cost is lower and you haven’t innovated a new process, your quality of product or treatment (service) is likely to be lower. You have cheapened the product and it may not last as long. You are using inferior people or products that will cause warranty issues later. You aren’t giving your client the treatment they demand or even possibly deserve.
- Warranty: Related to the above, if you are giving up margin or cheapening your product or service, you will not be able to service your work or product for long. Sooner or later your lack of margin will catch up with you. I have seen one slow month shut down a company. No one should be more important to a company than the customer who has already shown their faith in us by paying us, yet we invest way more time and energy on the new ones.
Keep these things in mind to keep your business in growth mode
- Be realistic. Competitive pricing is the ante to sit at the table. Know where ALL of your competitors are priced, not just the ‘loss leaders’. Price accordingly.
- Know your position in the market. Are you the high end supplier? The low price leader? Your price should reflect this, along with your offering.
- Know your customers. What do they value? What do they need? How do they feel about you and your company? This can’t be an ‘I think…’ statement. You need real data to make real decisions.
- Hire talented sales people. A salesperson that knows what they’re doing will make you margin, even if they cost you more. Being cheap on proven sales people is like driving on the feeder instead of the toll lanes. As long as you tie compensation to performance and have specific measures in place, the investment will reap benefits.
- Take care of your existing clients first. As I wrote earlier. Many companies forget their current customers in their marketing plans. They assume that current business will stay. Well guess what, some of your competitors are reading this and putting together plans to take your customers just as you try and take theirs. Make sure you plug your bucket before you pour anything in.
- Network, build, repeat. The more people you know that like you and think you do a great job, the more business you will eventually get. Personal networking is a key component to any plan. Set goals for meeting new people, build relationships with those people, and do it again over and over. How many people would pick up the phone if you called right now if they knew it was you?
- Be patient. Working the plan will cause you to increase revenue. It may not be overnight, but cultivating the relationships, doing your research and sticking to the direction will work.
- Surround yourself with the right people. Building a team of people that build and advise you on the plan along with giving you encouragement and hold you accountable is the best way to ensure success.
You and your company can achieve more. Don’t get caught up in the self-limiting beliefs that you don’t have the money, can’t invest the time, or don’t have the right people. The first one is a myth and the second two are completely your choices. You are the one responsible for either pushing things forward or holding things back. What will you do right now to chart a new course? What will you decide to change in order to facilitate growth? How will you challenge your team to reach for the stars then chart a plan to get there? The answers to these questions and more will get you started.
Until next time, go make something happen.