(…continued from Pt. 1 here)
Problem Number 3:
3. Now if you’ve managed to avoid the two prior pitfalls, then each job you do will be profitable, and you’ll have enough leads coming in to generate enough work for the year. …But what if you can’t CLOSE those leads? Therefore we come to the third most common reason a contractor goes out of business: insufficient sales.
Even if you have 10 leads coming in a day, if you can’t turn those leads into paying clients then you’re going to have a hard time staying afloat. This is a big problem in our industry because most contractors start off as craftsmen and tradesmen, not as salesmen. They’re masters at building projects…but not at selling them.
So how do we fix this problem? There are several options, so let’s go through each in turn. First, if your sales are a bottleneck for your business you could try giving some sales training to whoever is doing the selling for your business… whether that’s you or your project managers. Read some sales books (Zig Ziglar’s stuff is good, and “Spin Selling” by Neil Rackham is superb). Teach them some scripts and some good followups to common objections, then have them practice.
This method works great if you can get your guys to work on it consistently, but it takes time to do this kind of training and it’s prone to errors and inconsistency. We all get a bit tired after working all day out in the field (to put it mildly), and then if we have to shower and rush off to a 6:30 sales call we tend to make a lot of mistakes.
The second option is to try outsourcing the sales to a dedicated sales team, whose entire job is to follow up on leads and convert them to customers. This solution consistently works pretty well, but only if you have the budget for it. A good full-time sales guy will cost you upward of $50k per year, so if that’s in your budget that’s usually a good solution. But if your business isn’t ready for that kind of overhead yet, you’ll have to try a different approach.
Now if inside sales training takes time and tends to produce inconsistent results… and we can’t outsource it to an outside sales team without forking over a ton of cash… what’s there left to do? Here’s what I’ve found to work best – outsourcing sales work to paper.
Get the selling arguments down in writing, pretty them up, then get them printed on a fancy-looking brochure or folder. Put pictures of your best work in here, along with some testimonials and reasons why you’re the best in the business. Then have your sales guys give it to each prospect they meet with and let the documents do all the hard selling for you. This also stops you from coming across as too salesy and promotes genuine interactions between you and your clients. (Bonus: documents never get tired or lazy.) This is why everyone loves scripts and other sales materials so much – they make your job much easier in so many ways.
Problem Number 4:
4. Now we get to number four, and this one is the most insidious. You’ve got your jobs profitable. You’re generating sufficient leads. You’re closing enough of them to keep you busy all year. You think you’re in the clear. But now you’ve got a different problem – stuff keeps falling through the cracks. You’re starting to forget things or take too long to get back to people. You’re experiencing big problem number four: insufficient organization.
Many contractors become so busy focusing on their jobs that they forget about their business. They put off fixing the small stuff until it becomes too big to ignore. Their business starts to resemble a leaky bucket – one with more holes in it than water.
I watched a lot of excellent contractors close up shop last year because they were great at building… they were great at generating and closing leads… but they just never fixed the holes in their business. They started forgetting about meetings, forgetting about bids they needed to prepare, and losing important documents. The small stuff that makes a big difference got left by the wayside. These guys didn’t have a system for organizing their tasks and making sure they got them done when they needed to get done. A small leak can sink the titanic after all, and 2020 made all of those leaks bigger… then filled the water with sharks. You just can’t let anything slip anymore, or you’ll go under and get eaten alive.
One of my project managers was really guilty of this one – he’s always taken pride that his memory was “like a steel trap”. So he kept trying to remember everything he had to do: every meeting he had to go on, every bid he had to prepare, and every material he had to order. He tried to keep it all in his mind because of his ego. Well, it turns out that when you’re managing multiple $100,000 remodels with hundreds of details each… that strategy of “keep it all in your head” doesn’t tend to work out too well.
His head felt like it was going to explode because he was trying to keep it crammed full of stuff that didn’t need to be there. His brain was overloaded, and he started making mistakes. After he reached his mental breaking point he finally caved and starting using a calendar and our task management software to keep track of all the tasks he has on his plate. Now he never misses a thing, and he’s become proud of that instead. And I’ll tell you what, he seems a hell of a lot happier now too without the constant feeling that he’s got his head stuck in a pressure cooker.
…So that’s all I’ve got for ya today. If you can do those four things: (1) get your markup right, (2) hone your marketing message, (3) upgrade your sales game, and (4) stay organized… you’ll avoid the most common pitfalls in this industry, and be well on your way to building a better business.
