Not Growing At The Speed We Would Like?

JMT

We have been in buisness 12yrs and can't seem to get into a finacial position we would like. I do all my own selling, But i am a lay it on the table guy and not very agressive or i think with sales. I look at company similar to me that seem to be much more profitable. Do i need a salemens??? I don't think i do the volume to hire one, but then again maybe he would close on more jobs at stronger prices. If anybody has any suggestions PLEASE HELP.

ProWallGuy

Do you have any systems in place? Maybe look into hiring a business consultant to determine your needs.

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Wallpaper Hanger St. Louis
Digital Murals Installation

JMT

What do you mean by a system? Never heard of such a consultant.

JMT

We have the leads for the most part, but are closing rate needs to climb in order to cover overhead. More less need to get a system to get these leads signed and also a good process to qualify them first without offending them if possible?

AtlanticWBConst

Simple answer: You may need a salesman.

Example: I can deal with customers, and make them very happy. I try to offer them quality work and also make an effort to provide superior service (I demand/seek perfection (the best)... from our workers and the work they do)....

My week point: I try "too hard"....to help people....and to please people (clients), when, in fact, I do not have to.

This sometimes results in me (acting on jobs as the project manager) - bending over backwards to do things, and offer things at no cost, that I should not be doing...for no cost.

The result: We provide a product, that we should never have to compromise on, in terms of cost, but I often do, when I am at the financial reigns of client interaction.

My solution: I recogonize my weekness, and I delegate it to my business partner. We are old time friends. The benefit is that.....he's a "born salesman".
Whenever a client wants to talk price/cost/bargaining,etc.... I tell them: "You are going to have to talk to my business partner. I run the jobs, he handles the project budgets."

The result: Because he realizes the importance of making a profit, and not "just" pleasing clients, we have a balance. That creates a more balanced approach to sales, to profit, and most importantly...to growth.

For a business to grow, there has to be: a 'sales-person" in the formula. If you don't have that in your own "persona", then you may need to consider making that addition, in one form or another, to your "business plan".

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- Build Well -

wpc07834

If you really want to grow, of course you need salesmen. But you will also need more leads. Salesmen who are any good work for commission only. Recuiting is the lifeblood of our industry.

Mike Finley

Boy, that's a tough one. It's so hard to say what would or wouldn't help you without knowing a tremendous amount of more information. What is your closing ratio, be as brutally honest as you can, we all have a tendency to round up. Where do your leads come from. What's your percentage of profit. What's your sales volume. What's your average job dollar amount.

Just because you are a lay it on the table kind of guy and not that aggressive doesn't mean you aren't doing well at selling. For every successful super aggressive salesman there is another lay it on the table, easy going successful salesman. A less agressive style doesn't necessarily mean you're doing worse than somebody else.

Sometimes the answer is what a business is doing with it's current sales and profits. Increasing sales 30% might only net a 5% higher annual profit. Just changing the way you are conducting business with better internal controls might net the same 5% savings with much less risk. Buying instead of renting your workspace might yield that same 5%, changing up the employees by finding a better key employee might yield that 5%. There are a lot of what if's.

Hiring a salesman might be exactly what you need, or it could be the worst thing you ever did. Plenty of business owners have thought the answer is finding somebody else to do what they don't want to do, the problem is finding somebody who actually will do it better than you. You might be so relieved to not have those duties anymore that you overlook for a little too long your new salespersons faults, pretty soon you're losing money on jobs, going into debt and then you look around and discover you're worse off then you were.

I'd say the only time you should make a move like that is when you have figured it all out and you know it's the right move. If you're not certain, there is probably a reason why, and you really need to figure that out. I think these things should be really obvious that it's the right thing to do when it's time to do it.

marc

The first thing I would do if I were you is read the book....The e-myth.

It's all about running your business with systems. Before you can grow your business, you need to have systems in place.

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Marc

ProWallGuy

Yep. I would say that may be your problem.

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Wallpaper Hanger St. Louis
Digital Murals Installation

JMT

Well to add a little more info last year we only did around $400,000 in sales, most of are leads are refferals, some internet, local paper, and phone books ( which dont work, but cost $$$$) Thats something else we are working on is producing the most leads for least $$.

Also being in exterior buisness what is a professional way to qualify a customer with out offending them if you have any suggestions.

Publisher1

Yes, you need to read e-myth, and yes you need systems, but don't rush out and sign up for Michael Gerber's 'coaching'. The challenge is you need enough insights to select the right consultant for your business -- perhaps locally or perhaps one of the other specialists out there who know their stuff, give personal service, and understand that while great businesses require systems, they also need individuality and one-on-one attention. (I know a few consultants I like and perhaps in a decade or so will be qualified to consult myself, I dream.)
Say you determine that finding a good salesperson is the way to go; you then need a system to find a good salesperson! This isn't easy to do -- as an example I've been at peer group gatherings of high powered successful business people (I didn't really qualify to be in that group, but will in about two years) -- and the single universal problem everyone experienced is: yes, "Finding great salespeople.") After quite a lot of effort, I found a system that works for me -- I won't push it on anyone else right now because it needs to be validated with some third-party success. In fact, my local business consultants are paying me for the system with a rebate on their charges -- and if it works for them, then I know it may be replicable).
But as Mike Finaly says in the earlier posting, you can't do this until you know it is right for you. I can say I am like you -- I tend to give away the store -- so am happy to pass on the leads to my sales team.

JMT

And with sales ive hear of several pay styles and percents that is also unfamilar to us. I dont know the going or type of rates ect.. That produce a motivated salesmen that produces. What is a decent # a week of leads to give a salesmen , dont know that either?
We have been losing alot of jobs to our main competiotor in are area, When i do my follow up calls our prices are usally close. I know are quality is much better than theres, but he is a better salesman, i belive sigining them on the spot! Also been told he will do what ever it take to close the deal, even badmouthing us ( WHICH I WILL NEVER GO TO THAT LEVEL) So my question on this is how do i set us apart from the other with and still being professional?

Carport King

Wow some great advise out there today. First of all stop and look what you are dong now. Do you job cost every job out before you do it? Do you really know your overhead number to the penny?

Do you match up your job cost after your done with the job? Where is your mistakes if any?

Can you afford to add the cost of a salesman? I do not think your volume calls for a consultant yet. You should be able to look at this with your accountant and work this out.

Do you give away the farm to sometimes get the job? Are you able to walk away from a job?

I only say this because less is more at times. Once you know your numbers and what it takes to make $$ than you make it or walk away.

Take baby steps, get what you now have under control and then move forward.

If you are able to pay your bills and earn a paycheck sometimes people are just happy with that doing there own thing.

But most of us are always looking for the rainbow, bigger home, bigger boat, happy wife all the time! Good luck

Publisher1

All sorts of good questions here -- but to answer them you need to answer even more questions. It may seem like an endless circle, but while there are fairly s tandard metrics for this sort of thing, there are many variables as well.

For example, several people in this neck of the woods believe commission only is the way to go. I disagree. All my salespeople get a reasonable starting base with commissions if they meet quota -- but I expect to evolve to a full salary model in a few years (or perhaps more in the model of salary plus commission for the first two years, t hen they either either leave or get pure salary plus group bonus.) But I respect the other perspectives on this matter. The problem with pure commission is you either get the very bad (they can't find/hold any other job or the very good -- but then they can practically 'take over' your business). The problem with salary is of course that you get people who will collect every cent of salary you pay, plus all their benefits and 'rights' and not deliver anything back. Do you provide leads for your reps, expect them to generate their own, or some combination? You can see how complex this gets. (I expect my reps t o provide their own leads but we provide some resources and supporting mechanisms to help them in the process -- ie our good relations with a major trade association gets us recognition and free trade show booth space.)

Do you belong to relevant industry associations? Can you talk with peers in other cities with similar demographics to you (but where you aren't directly competing). You may get more useful insights this way than anything else you can do.

Can you define your brand, your unique selling proposition and overall marketing strategy? Is this totally confusing to you? Don't worry, you can learn the stuff.

Mike Finley

With $400K in sales I think it's going to be pretty tough to be able to bring on a salesman. You might be able to do it if you are willing and able to give up a good chunk of your personal salary and defer that to the salesman. But that would certainly be one of those moves where the salesman would have to increase your gross sales pretty quickly in order to move you up into more profit so you can start paying yourself again. Never as a business owner would I really consider bringing in a salesman as a means to increase my gross sales -- (unless) I had so many leads that the salesman would be increasing gross sales by capturing the lost jobs that I just didn't have time to pursue. That doesn't seem to be your case so you have to go about it backwards. You have to have a system in place and there will be a transition period where the salesman replaces you and income will not increase, it should actually decrease temporarily, and you most likely will find yourself struggling and juggling more hats as you try to fill in the missing income yourself.

The long and the short is -- my advice would be to increase your leads to the point where the salesman is handling the excess leads, then that salesman is adding income to instead of just replacing it.

Also, it's the right step in the right direction to always be massaging your marketing to increase your leads -- but almost more important is massaging your marketing to bring in the right leads.

Qualifying customers depends upon your individual business, how you do business, who are your ideal customer types.

The first step to qualifying leads is creating customer profiles. You should be able to create 3-4 profiles that describe your ideal customers. Start by thinking about all your past customers, think about which ones were the most profitable, which ones seemed to work really well with your company. With enough thought you should start seeing some similarities.

Let's say for example you discover that your ideal customers are either:

Married couples in their 20-30s in their first home. With home values around $250-$350K, mortgaged, suburban neighborhoods.

Or

Older folks in their late 50s-60s, home values in the 200K range, homes paid for.

Reaching either of these types of customers is done in two completly different ways and with two completely different messages. The first one you might do it with high quality repeated direct mail through new homeowner lists. The 2nd you might reach through advertisements placed in the local AARP publications. But as you can see you don't reach them through the same methods, and that is the key to increasing the quality of your leads. (understand who your ideal customer is, market to reach them specifically, create a message specifically for them)

Carport King

We have 16 design consultants and we pay a draw on commissions and we supply most of the leads. Yes we have some that are better than others and some set there pay scale to match there life style.

They all need to give weekly quotas and we work with them to make it happen. We have a set marketing plan out every 3 months and I keep it on auto pilot. If we need more leads we advertise more.

You must keep your staff all accountable and like all employees they have ups and downs. Do not be afraid to cut someone if they are not doing there job. Every one needs some guidence at times.

It does not take long to figure it out if they work or not. Remember who writes there check.

JMT

Well all the info was great and alot to think about. But last thing to add ( AND MAIN) i do think we should be a 1 millon plus a yr company. BUT i need to learn to close the deal and stay firm on prices. Mainly closing a sale and not wasting time with crummy leads is my roadblock to a better life and future.

playsinmud

Thanks to all for your input. It makes me take a hard look at our own company strategies.

rbsremodeling

You might not need to be a million dollar company. I have gross millions of dollars a year doing remodeling. But my most profitable years where in the 500-750k years. I am planning to gradually scale back down to the lower gross over the next 2 years. I do higher markup and less overhead at the 500-750k range. You really need to be prepared for growth once you push pass the 500k a year mark. the dollar volume does not have to increase the markup does. That's how you make money

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JMT

I understand, when i used to do most of work myself and was in the 200-250k range. I had more $$$, but i have since had a back surgery and not the same person. Just want to make a comfortable living, retirement ect... Dont really care about the gross. It just seems to be 750-1mill to make it happen. I could be wrong.