Michael Stone Chat Transcript: (UPDATED!!!)

Nathan

Sorry for the delay guys. I've had my hands full lately with the new baby and boxing my house up.

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See PWG's post below....

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Nathan

"He is no fool who gives what he cannot keep to gain that which he cannot lose." - Jim Elliot

Nathan

See PWG's post below....

__________________
Nathan

"He is no fool who gives what he cannot keep to gain that which he cannot lose." - Jim Elliot

Humble Abode

Thanks a lot Nate. I transfered it into word and added some spaces already.

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Just because some of us can read and write and do a little math, that doesn't mean we deserve to conquer the Universe. Kurt Vonnegut, (1922 - 2007) from the Novel 'Hocus Pocus'
The NAPP
Milwaukee Painting Contractor

ProWallGuy

08/31/06 21:05:49 Nathan: OK, good turn out folks. Lets get started.

08/31/06 21:05:55 Nathan: Thanks for joining us for the first of hopefully many
organized chat sessions on ContractorTalk.com.

08/31/06 21:07:46 Nathan: Quick Intro: Michael Stone is our guest for tonight and has offered to come and share some of his ideas on but business of contracting. He is the author of the book Markup & Profit and also does seminars and coaching for contractors across the U.S.

08/31/06 21:08:08 Nathan: If you would like more information about him or his book feel free to click on the image of the book on the screen and it will take you to his site in a new window.

08/31/06 21:08:25 Nathan: Michael (, if you want to give us some background about yourself and talk about some of your ideas and then we will move on to some questions.

08/31/06 21:09:31 Nathan: Few people just joined. Real quick please hold your questions until we get through the intro. Then we will open it up.

08/31/06 21:09:42 Nathan: Good turn out by the way guys... glad to see it

08/31/06 21:12:43 MCStone : Just want to add to what Nathan has posted. We also do business coaching and on site consulting work. We have customers in all 50 states, all across Canada and nine other countries.

08/31/06 21:15:08 MCStone: Someone posted a question yesterday about putting all of your overhead burden onto labor. That is not a good way to arrive at the sales price for your work. It has some inherent flaws and can end up costing you profits on your jobs.

08/31/06 21:16:14 MCStone: Another post asked for a free book. Our answer is not no, but Hell no. Something for nothing is worth nothing.

08/31/06 21:16:56 ProWallGuy: lol

08/31/06 21:17:09 Nathan: ok, Question from Double-A: in your book, you discuss not competing with others in your area in the same business on price. We've discussed this on the forums, and some of the folks, especially the folks in Florida , are really having a hard time with the hacks and folks using imported labor.

08/31/06 21:21:49 MCStone: Why spend time worrying about what others are charging or how they run their business. Can you control what they do or how they charge for their work?

08/31/06 21:22:08 Double-A: What would you suggest to them to help them separate themselves and their companies from these low-priced folks?

08/31/06 21:22:25 MCStone: One needs to focus on getting your estimates right and then polishing up your sales skills.

08/31/06 21:22:56 mdshunk: Many consumers resent being "sold"

08/31/06 21:23:03 IHI : true dat
08/31/06 21:23:05 dayexco: IHI , you want to lower your standards...to theirs?

08/31/06 21:23:23 Squrtgun: I agree with that mentality,but quality over price hurts.I refuse to drop prices but I'm also scared to raise them for fear of losing customers

08/31/06 21:23:25 MCStone: If you are qualifying your potential customers and asking the four basic questions, you will get to the buyers very quickly.

08/31/06 21:23:30 IHI : got big dreams of doing what I want on a shoe string budget just to get the job

08/31/06 21:23:57 Jon_Fife: WHAT FOUR QUESTIONS???

08/31/06 21:24:01 dayexco: i refuse to, i've been in business on my own 26 yrs...i let my repeat/referred customers sell me. i know what i need to make a living, i don't worry about others

08/31/06 21:24:07 MCStone : Remember, you must charge enough to cover all your job costs, all your overhead and you must make a minimum of 8% net profit.

08/31/06 21:24:17 IHI : hence the plain jane jobs we geet to do.

08/31/06 21:24:34 mdshunk: What's magic about 8%

08/31/06 21:24:49 IHI : have'nt broken into the customer teir of "whatever it takes to do it like you'd do at your home"

08/31/06 21:25:06 MCStone : If you don't cover your costs and make a profit, you will go away, probably sooner than later.

08/31/06 21:25:24 mdshunk: Why 8? Will 7 work?

08/31/06 21:25:48 mdshunk: Maybe 8 won't work at all. Perhaps it should be 10

08/31/06 21:26:02 jmic: it's better than 5%

08/31/06 21:26:11 IHI : MD:we're great at piece work and making big bucks, but I tire easy of plain jane simplistic budget work

08/31/06 21:26:16 MCStone: We have tracked the companies that make a good profit each year. 8% is the minimum that all of the good companies maintain year in and year out.

08/31/06 21:26:32 mdshunk: Thank you for that explanation.

08/31/06 21:26:39 IHI : 8% profit over operating costs?

08/31/06 21:26:53 MCStone: Those that maintain the 8% level, often get to 15% and 20% or more after a couple of good years and fine tuning their companies.

08/31/06 21:27:58 Squrtgun: So we aren't going to compete on price and sell our reputation and knowledge above the rest,but how do we close the deal?

08/31/06 21:28:22 MCStone: Percentages for the perfect run remodeling company will be 58% job costs, 32% overhead and 10% profit.

08/31/06 21:29:13 Jon_Fife: FACTORING OWNER SALARY INTO OVERHEAD??

08/31/06 21:29:14 MCStone: Squirtgun: Ask questions, that is the strongest sales tool you have.

08/31/06 21:30:01 MCStone: Jon_Fife: Of course. Owner's salary is always an overhead expense. Normally, it should run about 8% of gross sales.

08/31/06 21:30:42 IHI : MC: I'm not a salesman, never have been. But typically what I've found over the years is customers have big dreams until you hit them with the reailty of pricing, then once they get a wake up...pretty much done trying to sell them anything

08/31/06 21:30:57 Squrtgun: Agreed

08/31/06 21:30:58 MCStone: As we can only post a couple of lines at a time here, let me post an easy way to set your salary.

08/31/06 21:31:51 MCStone: Figure out how much money you want your company to pay you for the next 12 months. Divide that number by 08. That tells you what you need to sell, build and collect.

08/31/06 21:31:55 Jon_Fife: Re: 8%/owner: fairly universal, for GC's, remodelers, painters, etc??

08/31/06 21:32:31 MCStone : IHI : May I respectfully disagree. If you own a company, you are in sales, like it or not. If you don't go sell, who will?

08/31/06 21:33:07 maj: I don't sell a thing, my work sells me!

08/31/06 21:33:26 IHI : MC-agreed, I'm working on that. But it goes full circle to many of us that are great in the feild but lack selling power, so it boils down to the bottom line

08/31/06 21:33:38 MCStone: Jon: I encourage everyone to start at 8% and increase it at least 1% each year. That is a good goal and keeps you out of the bars and off the streets.

08/31/06 21:34:24 PipeGuy: do i hear you saying that accurate job cost estimating is paramount to long term success?

08/31/06 21:34:34 Jon_Fife: lol

08/31/06 21:34:35 MCStone: OK, the biggest mistake that most, and I am talking 90% + here of sales people make is giving information to their customers. Ask questions. Much, much stronger.

08/31/06 21:35:15 hatchet: I would honestly say I listen more than I talk to my clients.

08/31/06 21:35:25 Squrtgun: What key questions do you feel make or break a sale?

08/31/06 21:35:46 IHI : MC: what type of questions do you recommend...dont need a whole list just some ideas other than the typical job realted questions at hand when estimateing

08/31/06 21:35:47 MCStone: PipeGuy: Good estimating is a must. An error factor over 3% is not good estimating. 1% is very reachable in this business if the estimator will follow our 6 Cardinal Rule.

08/31/06 21:36:44 MCStone: Let's try something here in the way of my answering the question about what questions to ask.

08/31/06 21:37:22 MCStone: Let's assume we are on a sales call. Ask me one sentence questions that you get from your customer and I will show you what I mean.

08/31/06 21:37:39 MCStone : Keep in mind, I am old and my fingers get tired of typing quickly.

08/31/06 21:37:41 IHI : How long before you can start

08/31/06 21:38:04 IHI : is that the cheapest you can do it for

08/31/06 21:38:08 Jon_Fife: How long does you product last?

08/31/06 21:38:08 MCStone: Do you have a particular start date in mind?

08/31/06 21:38:26 IHI : we'd like it as soon as possible, within the next week

08/31/06 21:38:30 Squrtgun: I think what most of us combat daily is what I call the Walmart mentality.Most consumers have fallen into a cheaper is better thinking.

08/31/06 21:38:41 IHI : keep in mind we're 2 months out in real life terms

08/31/06 21:39:11 IHI : Squirt: could'nt agree more

08/31/06 21:39:14 Squrtgun: Ooops didn't mean to send that just yet

08/31/06 21:39:23 MCStone: While I am waiting for questions, keep this in mind. If all you get from your customers is questions and comments on price, THEN CHANGE YOUR CLIENTELL. ADVERTISE SOMEWHERE ELSE .

08/31/06 21:39:36 realpurty2: "My brother in law does this stuff. He said I shouldn't pay over *** dollars. Why is your price so high?"

08/31/06 21:39:41 MCStone: Let your competition deal with the people who are looking for something for nothing.

08/31/06 21:40:08 Squrtgun: You mean we can't burn them at the stake?

08/31/06 21:40:11 IHI : welll, round here if you wait for the peeps that will pay what you want, your waiting a long time with no money to put food on the table

08/31/06 21:40:17 realpurty2: Ditto

08/31/06 21:40:21 Squrtgun: yup

08/31/06 21:40:48 IHI : at least with us, we love to land the good jobs, but HAVE to use the lower pay jobs to keep the world going round

08/31/06 21:40:58 MCStone: Realpurty2: Those kind of questions should not come up. If they do, you have not qualified that customer and are probably waisting your time.

08/31/06 21:40:59 realpurty2: MC.. what if the market area we live in simply will not support the percents you suggest. Not even close.

08/31/06 21:41:16 IHI : seen tooo mayh guys go out of business with the this is what it takes to get me on your job site or I wont show up at all

08/31/06 21:41:52 Jon_Fife: What do you do IHI ?

08/31/06 21:41:55 IHI : simply put....they dont get the job and they dont amke money to operate a business

08/31/06 21:42:02 realpurty2: It sounds wonderful to be able to set your own price, but when market conditions won't substantiate it, then what?

08/31/06 21:42:02 IHI : general construction

08/31/06 21:42:13 MCStone: IHI : Sorry, I hear that from literally every state in the union and across Canada . You have a choice to make money or participate in the low price game.

08/31/06 21:43:02 IHI : believe, I've experiemnted on customers and tried selling at higher prices and it always bites me and I dont land the job. I know it's not excuse and falls back on salesmanship

08/31/06 21:43:02 Squrtgun: I know I'm higher than other companies in my area.We can go weesk without a paying job.We are good stewards of money,but just once in a while you want to have extra $$

08/31/06 21:43:21 Double-A: MCStone, can you give us an example of how you would qualify a potential client?

08/31/06 21:43:23 GoodPainter: Do you you think pre-qualifying on phone before going out is good idea? Perhaps like Do you know that our painting services are higher in price than others around here?? Are you willing to pay a higher price for better quality and service

08/31/06 21:43:38 IHI : Double -A-great ?

08/31/06 21:43:42 MCStone: Realpurty2: I said above, you must charge enough to cover your job costs, overhead and profit or you will go away. Either you understand that or you had best find something else to do.

08/31/06 21:44:12 Squrtgun: I do have the luxury of swinging into a friends cabinet shop and lending a hand,but that takes away from time I need to be out pushing my company.

08/31/06 21:45:34 Squrtgun: So if we aren;t seeing the work we feel we should be,is it time to reexamine our pricing?i.e. have we over shot what the market will bear in our area?

08/31/06 21:45:52 IHI : Simply put in a nutshell, no matter the company it's a worth while investment to get a great sales person on staff since that is their gig

08/31/06 21:46:03 JohnNYCT: You said earlier that putting you overhead burden onto labor <<IS jobs. your on profits you costing up end can and flaws inherent some has It work. for price sales the at arrive to way good a not>> What are those flaws?

08/31/06 21:46:04 MCStone: DBL A: You qualify your customers by asking the 4 basic questions and a ton of support questions. It is all covered in the M & P book. What do you want to do? When do you want to do it? Who will make the buying decision? And.......

08/31/06 21:46:41 MCStone: # 4 is "What does that person want to spend?" If you don't get the answers to # 2 and # 4, you will never get the sale.

08/31/06 21:46:49 hjm: I'm a new general contractor, my issue is that I'm not use to dealing with customer but fell upon a heck of a run, learning all the dos and don't on bidding i'm learning as I go, bidding is a tricky area do to, I have more than I can do, but the bidding

08/31/06 21:47:55 Mike_Finley: Mr. Stone - I would say that the best qualifying you can do is by how you market your company. If you have to qualify them after they call you, it is a sign you need to revist how you are marketing.

08/31/06 21:48:06 Mike_Finley: Would you agree or disagree?

08/31/06 21:48:52 Squrtgun: Mike we are working on that very thing now.

08/31/06 21:49:37 Squrtgun: We have relied on word of mouth far too long.Commercial is a no brainer,but resi is killing us

08/31/06 21:49:50 IHI : Flor: most of the time on referrals if they call the job is yours and they have the money's. So I think we get lulled into thinking since some customers call they have the money or can get the money to do the job

08/31/06 21:49:51 MCStone: MF: Sounds good. Might work if you have a good population base to draw from. Lower population areas might cause you to gather in some leads that don't fit your niche.

08/31/06 21:49:59 Jon_Fife: Killing how Squirt??

08/31/06 21:50:01 Squrtgun: I just need to figure out how to raise price on the commercial side.

08/31/06 21:50:22 Squrtgun: We haven't washed a house since April.

08/31/06 21:50:22 Florcraft: like Alaska ?

08/31/06 21:50:54 Mike_Finley: I would agree with that, on this forum we often have to step back and consider where another contractor is based. RP2 makes good sense in regard to who she can market to.

08/31/06 21:50:59 Jon_Fife: not getting calls Squirt?

08/31/06 21:51:06 Squrtgun: heck no

08/31/06 21:51:28 MCStone: For those that are interested, your referrals should be 15% to 25% of your leads in the door, not any more than that. If your referral rate is higher, you are not doing a good job of advertising.

08/31/06 21:51:28 Jon_Fife: where live in GA

08/31/06 21:51:31 IHI : Squirt...just go down the road washing every house for fun...that'll get people talking

08/31/06 21:51:56 Squrtgun: Sylvester....20 minutes east of Albany and 2 hours south of Macon

08/31/06 21:52:16 Squrtgun: IHI we do an average of 8 free house washes a year

08/31/06 21:52:47 hjm: I have a group of people in the hundreds that are waiting for me to finish one basement the bid there's, explain that

08/31/06 21:52:54 Jon_Fife: MC: I don't understand your last post about advertising/vs. 25% referrals

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08/31/06 21:52:59 hjm: it's funny

08/31/06 21:53:01 Squrtgun: for senior mostly,I've just never been compelled to use that as a marketing tool

08/31/06 21:53:08 Double-A: Let's not get too far away from the questions for Mr. Stone. We can discuss the other points in posts or in chat.

08/31/06 21:53:20 IHI : mail flyers Squirt....you cant believe the storm chasers and how busy they are repairing roofs here....show up out of nowhere, send out mailers and their signs are everywhere...really opened my eyes on a marketing approach

08/31/06 21:53:36 MCStone: JF: What don't you understand?

08/31/06 21:54:09 Florcraft: probably wonders how 25% refferels means bad advertising?

08/31/06 21:54:21 Florcraft: or more than that

08/31/06 21:55:08 reveivl: I work @ 100 % referrals, which means I'll always be busy but never be rich?

08/31/06 21:55:09 Jon_Fife: I guess, you have 100% of clients refer you, but if that is all you get, you aren't advertising at all

08/31/06 21:55:21 MCStone: Those that work by referrals and don't advertise, will never know how much good business they never got because they refused to advertise. Referrals should be the icing on the cake, not the cake.

08/31/06 21:55:33 Florcraft: makes sense

08/31/06 21:55:44 reveivl: Yeah...

08/31/06 21:55:50 Jon_Fife: yep

08/31/06 21:55:59 dayexco: it appears to me, that many of you don't have a good handle on the cost of your operation, that you're basing your bids on what others are bidding them at.

08/31/06 21:56:03 Mike_Finley: oh boy, we're off now!

08/31/06 21:56:22 Squrtgun: where are effective places to advertise?YP,newspaper,postcards?

08/31/06 21:56:32 IHI : Day: you can only get so much for a job regardless

08/31/06 21:56:36 MCStone: Florcraft: It does make sense. Our coaching clients that switch to advertising often turn their businesses completely around in 90 days or less with the new business that comes in.

08/31/06 21:56:49 realpurty2: MC, Should growth and expansion funds be built into the overhead or taken from net profit?

08/31/06 21:57:07 reveivl: good ?

08/31/06 21:57:12 dayexco: what Mr. Stone has said many times...and if that only so much doesn't pay the bills, you're better off doing something else

08/31/06 21:57:22 IHI : same house 2 companies bidding mine and your, my overhead is lower...yours is higher. Common bid is $200/sq, so your gonna go in at $400 a sq to cover your expenses?....good luck selling that one

08/31/06 21:57:39 MCStone: RP2: That is due a long winded answer, but essentially that is the right approach.

08/31/06 21:57:48 dayexco: then you have to reduce your overhead

08/31/06 21:58:05 Double-A: Building into overhead?

08/31/06 21:58:45 dayexco: why build something at cost, or lose money at it?

08/31/06 21:58:49 Florcraft: MC: do you talk about sales and self esteem in your book?

08/31/06 21:58:53 IHI : I'm just saying that most jobs only fetch X amount of money, anything over that is gravey for 90% of companies and it comes down to who can sell it higher than normal

08/31/06 21:59:31 IHI : but in today's world with information everywhere consumers more than ever have an idea of what something should cost

08/31/06 21:59:36 electro: IHI - Our company has a much higher billing rate than most of our competition. Yet we have no problem winning work. In fact we sub some work to the very people we compete against.

08/31/06 21:59:53 MCStone: Florcraft: Some in the M & P book. I cover it at much more depth in our new book, "Profitable Sales; A Contractor's Guide" that will be out by the end of the year.

08/31/06 22:00:02 Squrtgun: ya;ll hat amongst yourselves for a few minutes.The teenager needs to type a short paper

08/31/06 22:00:12 Squrtgun: ya'll chat...lol

08/31/06 22:00:14 Mike_Finley: lower your overhead and your profits go up, that's why in my book we advise to hire illegals and underage children

08/31/06 22:00:26 Squrtgun: lol

08/31/06 22:00:54 realpurty2: What is the best way to lower your overhead if a business is still in the stages of growth?

08/31/06 22:01:23 hjm: All my refferal have been large basements, and I raise sq ft price every time, plus change orders, I think I'm doing it right, subbing out more as I go, raising my overhead

08/31/06 22:01:24 realpurty2: Are tools and equipment best built into overhead or factored into individual bids?

08/31/06 22:01:38 MCStone: Have you noticed that in your town (as electro said above) there is always one company that everyone says is the highest price company in town? Ever notice how they always seem to be busy?

08/31/06 22:02:16 Florcraft: it seems to me that the sales area of contracting is the money MAKER, and all else is an expense. I would like to see the contractors on our sites learn alot about sales. I think that would be the best start. Without winning sales techniques, how can you focus on other areas of business first?

08/31/06 22:02:18 Jon_Fife: ...and why is that??

08/31/06 22:02:44 Jon_Fife: why is that MC??

08/31/06 22:02:45 MCStone: RP2: I think there is far to much emphasis on lowering overhead. Set your overhead goals for the year, go sell the job. Spend your time selling and schmooooozing and making money.

08/31/06 22:02:56 Florcraft: exactly

08/31/06 22:03:32 ProWallGuy: i like schmooooozing

08/31/06 22:03:33 realpurty2: but every dime we spend on overhead could be going into profits.. I'm confused

08/31/06 22:03:37 MCStone: FLRCRFT: Spoken like a saint.

08/31/06 22:03:52 electro: Some companies can lose it on costs but make it back on production. Some the opposite. Why not concentrate on controling both.

08/31/06 22:03:59 IHI : RP: dont schmooze-it rasies overhead LOL

08/31/06 22:04:06 ProWallGuy: lol

08/31/06 22:04:11 maj: MC, when you talk about "selling" jobs, what trade are speaking of?

08/31/06 22:04:54 realpurty2: I'm being serious here. If you try to add overhead percent, profit, markup, and a salary for owners, sooner or later your percents will be higher than the bid price.

08/31/06 22:05:10 Florcraft: think of it this way. your sales force makes money, and everything else is overhead. without a great sales force, it doesnt matter what great overhead techniques you use, or ads or whatever. Sales is the engine.

08/31/06 22:05:34 MCStone : Maj: Sales is essentially the same regardless the trade. In the last 10 years I have sold, new homes, remodeling, electrical work, plumbing, hvac, duct cleaning and some old cars. My sales ratio remains consistant, 1 sale in 2.8 sales calls.

08/31/06 22:06:03 locofoco: I think referal business is best. I've been in business a year. If you give people more than they expect, youy'll get the business. I don't advertise. I'm a one man shop and I do well.

08/31/06 22:06:32 maj: Mine is 1 to 1. I don't sell a think, the customer calls me. I usually can set my own price.

08/31/06 22:06:39 hjm: I agree with you locofoco

08/31/06 22:06:53 MCStone: Locofoco: It would be interesting to see how much more profitable business you could do if you would advertise.

08/31/06 22:07:01 realpurty2: We are booked solid for months. Work is there.. but we are working to refine our financials. There is something I'm just not seeing in this conversation.

08/31/06 22:07:33 dayexco: if you're booked solid for months, you must be in demand, your margins should reflect that

08/31/06 22:07:36 ProWallGuy: purty, if you're booked solid for months, raise your prices ALREADY!

08/31/06 22:07:39 MCStone: Maj: If you are truly selling every call you go on, you should raise your prices at least by 25% or more. Look at all the money you are leaving on the table.

08/31/06 22:07:48 hjm: My problem is too much work and not knowing what to do, finicially it's challenging

08/31/06 22:08:01 maj: Why the need to advertise when you can't keep up with the workload already?

08/31/06 22:08:07 phinsher: or start hiring more workers

08/31/06 22:08:48 MCStone: Maj: To attract better leads, the people who will spend the money to get the job done the way they want it.

08/31/06 22: 08:59 maj: I don't "go" on calls.

08/31/06 22:09:09 Ken@K&R: I raised our prices already

08/31/06 22:09:12 hjm: hard to find any but illegals here, or get a rent an idiot

08/31/06 22:09:18 Florcraft: someone on this site said once " 100% closing ratio means you are selling too cheap." I am glad it was repeated.

08/31/06 22:09:52 electro: If you have more work than you can handle, have you priced for growth or priced for profit? They are 2 different subjects.

08/31/06 22:09:56 MCStone: A good sales ratio is 1 in three calls.

08/31/06 22:09:59 phinsher: kinda comes down to, if you're happy with what you have, there's no need to change anything. If you want more, might pay to listen up

08/31/06 22:10:12 locofoco: Mr. Stone: I,m semi-retired. I have the luxuury of doing what I love (finally) and making my customers happy. I'm making money to supplement a pension and learning a lot of life lessons along the way. Thanks for all your insight.
08/31/06 22:10:30 Jon_Fife: 1:3 PHONE CALLS, or actual APPOINTMENTS??

08/31/06 22:10:47 Jon_Fife: calls for jobs, obviously,

08/31/06 22:11:06 MCStone: Let me pass this along, this from an old F*rt who has been in this business 46+ years. Be just as stubborn about your approach to business as you can afford to be.

08/31/06 22:12:13 MCStone: JF: Appointments. You should be able to weed out the tire kickers on the phone for the most part.

08/31/06 22:12:57 Nathan: Folks, it's after 10 and anyone who wants to is welcome to stay but I wanted to mention a few things since a few people are leaving.

08/31/06 22:13:04 Nathan: I will try to get an edited transcript posted by tomorrow evening of this chat.

08/31/06 22:13:06 MCStone: We didn't get very far with the one sentence questions on how to ask questions to your customers.

08/31/06 22:13:41 Florcraft: i wanna hear that and by the way it's only 6

08/31/06 22:13:49 Nathan: Michael, if you are interested you are free to answer any question that were asked in the ask michael stone a question thread

08/31/06 22:13:57 MCStone: Nathan: I am willing to go a few more minutes.

08/31/06 22:14:02 Nathan: That is fine

08/31/06 22:14:03 realpurty2: Mr. Stone, please stay long enough to answer one very important question. We've inquired via email several times about your coaching and consulting fees, never a reply. Would you highlight the rates here please?

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Wallpaper Hanger St. Louis
Digital Murals Installation

ProWallGuy

08/31/06 22:14:13 Nathan: just wanted to mention that since some people are leaving

08/31/06 22:15:39 MCStone: Realpurty2: Not here. Send your questions on coaching or consulting to: michael@markupandprofit.com. I have never received anything from you. Those that know us know that I respond to every call and every E-mail that comes our way.

08/31/06 22:16:52 realpurty2: that's the email I used, but I'll resend it.

08/31/06 22:17:07 MCStone: Our Cardinal Rule # 1 is to return all phone calls the same day or by 9 AM the next day. I sometimes, due to travel schedule, can't get the calls back by 9 AM , but I do return all calls. I can't preach it if I don't do it.

08/31/06 22:17:23 Florcraft: I would like to hear some questions you would ask customers that sets you apart from other contractors that may have put in bids

08/31/06 22:17:58 Florcraft: or potentially will put in bids

08/31/06 22:18:04 MCStone: What is your criteria for picking your contractor?

08/31/06 22:18:22 MCStone: How soon do you have in mind to start your new kitchen remodel?

08/31/06 22:18:54 MCStone: Will I be dealing with you on this project John and Mary, or will there be others involved in your decision making process?

08/31/06 22:19:13 MCStone: Share with me the budget you have for your new room addition.

08/31/06 22:19:17 Florcraft: i like " how can I make this project fulfill you every wish and desire?"

08/31/06 22:19:37 realpurty2: and when they refuse to give a budget?

08/31/06 22:19:43 Ken@K&R: We have never had anyone give us their budget for a project

08/31/06 22:19:53 MCStone: FL: Carefull, that borders on asking for Utopia!

08/31/06 22:19:58 Florcraft: haha

08/31/06 22:20:21 Florcraft: i like how it makes them know I am in this for more than money

08/31/06 22:20:22 locofoco: Have you ever worked for a church building committee- ooch1

08/31/06 22:20:35 realpurty2: Asking for budget seems to get stonewalled around here, like it's giving us info we shouldn't have or something

08/31/06 22:20:38 Florcraft: it helps me weed out tire kickers too

08/31/06 22:20:40 MCStone: Realpurty2: If you word the question right, and lead up to it right, getting a budget is no harder to do than asking what kind of windows they might want.

08/31/06 22:21:26 Ken@K&R: I think we would have better luck here asking for a kidney then a budget

08/31/06 22:21:41 realpurty2: I've tried "It is important to us to meet your needs in the best way possible, including financial restrictions, do you have a budget that you would like us to stay within?

08/31/06 22:21:43 Florcraft: maybe that's how they want to pay eh?

08/31/06 22:21:44 MCStone: LOCOFOCO: I know better. I am on the committee to get our new church building built. I have enough trouble keeping the rest of the committee off the contractors back.

08/31/06 22:22:24 Double-A: Mr. Stone, in some small communities that type of question borders on the "how much do you make a year" type-question. How would you suggest sneaking up on that question to avoid upsetting the farmer and low to mid income townsfolks in rurual America .

08/31/06 22:22:37 MCStone: RP2: You are on top of this game. Good way to ask.

08/31/06 22:23:34 realpurty2: Sorry to go back to overhead but this is why I came tonight. We are trying to expand, offer benefits to employees, get more equipment etc. Our overhead is growing too high to keep bids competitive and keep a fair profit. What is the best suggestion?

08/31/06 22:23:47 Squrtgun: MC,How do you go about raising prices on existing contracts?I have one account that has not seen an increase in 2 yrs...great client and I don't want to run them off witha 10% to 25% increase.

08/31/06 22:24:08 Squrtgun: Is there anything that can further promte your companies value to them?

08/31/06 22:24:13 MCStone: DBL A: This answer will take several posts. You ask for the budget and you put a qualifier on it. You tell them you know they don't know what it is going to cost, and you don't either until you get the design in place.

08/31/06 22:24:22 locofoco: Double A= Don't pull up n a 40k truck!

08/31/06 22:25:00 Double-A: I use a 1953 FarmAll for those calls, Loco lol

08/31/06 22:25:12 MCStone: Then you tell them you want their budget. Now they have to give you an answer. If they still won't give you a number, give them a medium, high and then low budget to pick from.

08/31/06 22:25:26 dayexco: i'd much rather have a successful looking contractor pull up on my jobsite

08/31/06 22:26:09 Double-A: OK.

08/31/06 22:26:17 MCStone: If they still won't give you an anwer, they aren't serious and it is time to get on your horse and head for home.

08/31/06 22:26:25 Squrtgun: so I guess my bike and the kids little red wagon full of equipment is out...lol

08/31/06 22:27:01 MCStone: DBL A: You could borrow my JD 1010. It's a little dirty at the moment but it sure can move the dirt.

08/31/06 22:27:12 Double-A: Thanks!

08/31/06 22:27:36 Double-A: Deere gets more respect around these parts. They think you're 'uppity' on an old FarmAll

08/31/06 22:27:39 Squrtgun: I can clean that JD...I like washing farm equipment

08/31/06 22:28:07 Double-A: Mr. Stone, there are a couple more questions from the thread, may I post there here for you to answer?

08/31/06 22:28:08 MCStone: Remember gang: you don't set the price on the work you do, your customer does. They pick the design, they make the selections, they set the price. Make sure you tell them that.

08/31/06 22:28:31 MCStone: That will go a long way towards getting people to be realistic about how much jobs cost.

08/31/06 22:28:42 GoodPainter: Just started a painting biz and getting some jobs by handing out letters--Other than buying equip and biz supplies and more advetising what should I do?

08/31/06 22:28:54 locofoco: Good point Mr. Stone

08/31/06 22:28:59 Florcraft: I would also like to hear your thought on PERCIEVED VALUE and how it can raise profits

08/31/06 22:29:10 Squrtgun: so a tiered sales tactic will work better than a firm this is the only price we offer approach

08/31/06 22:29:11 Florcraft: and set you apart

08/31/06 22:29:27 lxdollarsxl: hi all - damn is it a convention?

08/31/06 22:29:43 Double-A: A formal chat session, sorta, LX

08/31/06 22:29:45 Double-A: Heyup1

08/31/06 22:29:49 donb1959: Tiered sales don't work as well with paint contracting I would think

08/31/06 22:30:09 Double-A: bleh, i disagree, don

08/31/06 22:30:16 Double-A: post that in a thread

08/31/06 22:30:24 MCStone: GoodPainter: Hand out one business card a day to someone you haven't met before (potential customer). Then get your web site up. Those two things are getting many of our coching clients well over 50% of their new business.

08/31/06 22:30:31 Brushslingers: Ido as well

08/31/06 22:30:47 donb1959: AA, Not sure I see how tiered sales could work in PC

08/31/06 22:31:10 Double-A: Posted by Hatchet - What does Michael think of the PILAO method of applying all markups to labor instead of total construction cost? Does he see a benefit in this in certain cases?

08/31/06 22:31:34 Double-A: Make it a thread

08/31/06 22:32:01 GoodPainter: actually my letter is in an envelope w/ my biz card and I am handing one to every house in my hometown 1600 houses

08/31/06 22:32:22 Squrtgun: Guys understand that we are pressure washing contractors,so our approach may be slightly different

08/31/06 22:32:37 lxdollarsxl: ty for the answer florcraft

08/31/06 22:32:38 MCStone: PILAO has also been referred to as PROOF and a number of other labels. Didn't work for my grandfathers framing busines from 1915 to 1932, my dad's.....

08/31/06 22:32:39 Squrtgun: than painters or GC's

08/31/06 22:33:11 MCStone: electrical business between 1948 and 1972 and I doubt it will work for anything other than small service jobs now.

08/31/06 22:34:15 Brushslingers: Don, tiered sales is basically "break it down"... you break out trim, walls, ceilings, etc for the paint biz

08/31/06 22:34:41 MCStone: Gang: My lady says it is time for dinner. And, being that I have been at my desk now since 5:15 AM this morning, I must beg your leave to go have a bite and rest these old bones. Thank all of you for great questions, and I do hope we have helped each of..

08/31/06 22:34:54 Florcraft: THANKYOU!

08/31/06 22:35:01 Nathan: Thanks Michael!

08/31/06 22:35:04 Double-A: Thank you for your time, Mr. Stone.

08/31/06 22:35:04 ProWallGuy: Thank you for your time Michael.

08/31/06 22:35:06 GoodPainter: thankyou mike

08/31/06 22:35:08 Squrtgun: thank you

08/31/06 22:35:09 MCStone: you in some way. Hope you ask us back again. Be sure and check our web site at www.markupandprofit.com.

08/31/06 22:35:10 phinsher: Thanks MC!

08/31/06 22:35:12 Nathan: Great chat

08/31/06 22:35:16 realpurty2: Thank you

08/31/06 22:35:16 locofoco: Thanks

08/31/06 22:35:31 reveivl: Michael, time for me to reread your book, tks for this eve, rich.

08/31/06 22:35:48 MCStone: You are all most welcome and may the profits be with you.

__________________
Wallpaper Hanger St. Louis
Digital Murals Installation

Melissa

Thank you!

hatchet

I didn't get to stay for the whole chat. I thank you for asking my question for me. Honestly though the answer seems like a cop out to me. I could say the same thing - I don't use Romex because my grandfather didn't or we don't use LVL's because my grandfather didn't.
Was hoping for something more I guess.

__________________
Rich
WIT Construction Co.
Superior MT Contractor

RobertCDF

Thanks for posting Nathan / PWG I printed it out for reference.

__________________
Robert Shaw
Colorado Springs Custom Decks
Colorado Custom Decks
Custom Composite Decks