15 Tips To A Successful Contracting Business

  1.      Demand accurate financial statements (balance sheet and P&L) on your desk by the

         fifteenth day of each month. THIS IS NOT AN OPTION!

 

2. You only sell two things: Labor and inventory. You must price each one in strict relationship to its respective degree of complexity, desirability, and supply.

 

A.     Price service labor at a 25% to 35% net profit.

B.     Price service inventory at a 10% to 20% net profit.

C.    Price installation labor at a 10% to 20% net profit.

D.    Price installation inventory at a 5% to 10% net profit.

 

3. Install a system that will allow you to record the source of every sales and service opportunity. Calculate the cost to produce a successful and profitable sales lead for each category. Pound the most efficient category's.

 

4. Marketing is NOT a yellow page ad. Clean trucks, truck signage, outstanding uniforms, photo ID badges, grooming, telephone scripts, vocabulary, and most importantly – attitudes are marketing.

 

5. For most small to medium size companies, a budget of 2% to 4% of total sales should be allocated to advertising and marketing expenses.

 

6. For most small to medium size companies, direct mail and newspaper ads are the most effective and efficient means of creating sales opportunities.

 

7. Generally, you should avoid spending more than 40% of your total advertising budget on the yellow pages.

 

8. Establish flat rate pricing in your service AND installation department and train your co-workers on its proper use. THIS IS NOT AN OPTION!

 

9. Create outstanding, highly professional sales proposals, invoices, and “maintenance agreements”.

 

10. Your customer, and their family, are trusting you with their safety, security, comfort, and efficiency. Do not insult yourself or your customer by offering them a “bid”.

 

A.     Ask open-ended questions and let the customer do 85% of the talking.

B.     Offer them a solution to their problem.

C.    Explain the solution, why it is appropriate, and what it will cost.

D.    Justify their investment with factual data and address any objections.

E.     Create a sense of urgency.

F.     Ask for the order and do it several times. Use the “Assumptive Close” technique.

G.    Follow-up, follow-up, and then follow-up some more.

 

11. Create a comprehensive Co-worker Policy and Procedure Manual.
    
12. Conduct weekly, thirty-minute, company meetings. Topics should include reducing callbacks, filling out paper work, sales techniques, when to repair or replace it, etc. These meetings should not become the “bosses” bitch session.

 

13. Create a Truck Stock List for each department. If you are still on the old “time-and-material” song and dance, this must include retail pricing for each and every item on the truck.

 

14. Establish a comprehensive truck-restocking program. Trucks are restocked after each company meeting.

 

15. Write a budget and update it each month. Use your budget when making highly strategic decisions such as manpower requirements, training programs, marketing and pricing.