Will This Business Model Work?

ruskent

I have been in business for 3 full years now. Each year I seem to change my business model trying to find my spot in the world. For the time being I do not think I need to have 5 10 or 50 crews.

I am really trying to prepare myself to enter the 500-1 million dollar job market. My new advertising will throw me right in direct compeition with some of the largest companies in northern nj that do these jobs regularly. I can not match a large company on price. Even though the huge companies have big overhead, they are able to spread it out over so many more workers then I can.

I can not beat them on speed of completing the job. I do not have the ability to bring in 25 guys to sod lay 5 tractor trailers of sod in a day or lay a 10k sq ft paver driveway in a day.

All the companies that I will be in compeition have similar work quality. A industry expert might be able to tell whos work is best, but the average client will not be able to.

The only thing I can compete on is customer service. If someone is spending half a million dollars they want great customer service. I think they would like to see the company owner atleast once a day on the job site. I really do not think the larger companies are able to 'cater' to the customers has much as the could.

Is it going to be a complete mistake to focus my advertising campaign on this? I really think this business model could work and allow me to be extremly profitable.

rbsremodeling

I have done it both ways. Customer's don't care along as it is done well. Seeing you once a week is fine if the work is done right. Going up against the big boys is hard. I would wait awhile and build my rep a bit more.

Phone calls and weekly visit (if necessary) will work for most ho's. Just my 2 cents. So daily visits to me don't really ad a whole lot of extra value

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silvertree

I do daily phone calls and I'm easy to reach. A friend recently told me I was too fussy with my work, the customers were usually very happy before I tried to take it to the next level. He was right, the big companies did good work, were usually done on time, and the BIG ONE is, NO SURPRISES.
Thats where I'm at and growth opportunities are always there, consistency will be your biggest challenge

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Vote for Pedro
Kitchen, bath, St Paul remodeling
Minneapolis Remodel Blog
203K Loan Consultant Minnesota

ChrWright

When your game is better than 90% of the rest of the guys you're competing with, it's really a dog fight to try and put yourself ahead of that last 10%.

There are niches to every market/industry/specialty--and niches are where the rubber meets the road when it comes to building long-term success.

A niche might be a certain price range, as you mentioned, but it might also be something as simple as a geographic area. The majority of my projects are done within a few historic neighborhoods. My marketing/PR efforts are laser guided to ensure that as many people in those neighborhoods know my name and my reputation. That's a helluva lot easier goal than to try and go up against everyone else across the entire city.

There's a kitchen guy in new england that's in ultra high-demand for his "signature" kitchen. The high dollar set are falling all over themselves to have his brand stamped on their house.

That said, the David vs. Goliath fight can be played from both directions. David brags that he's smaller & can give more personal service. Goliath brags about his volume discounts, speed & price. There are clients who prefer to hire David, and those who want Goliath.

You can't be all things to all people.

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Christopher Wright, CR: President @ WrightWorks, LLC/President @ Central Indiana NARI, Named to the 2010 REMODELING Big50
www.WrightWorks.net - Facebook - Twitter - Carmel Remodeling
Indianapolis Kitchen Remodeling Contractor - You Can Get There From Here

Mike Finley

I love reading your posts, always right on the money.

ChrWright

And I yours, Mike--for the same reason...you tell it like it is.

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Christopher Wright, CR: President @ WrightWorks, LLC/President @ Central Indiana NARI, Named to the 2010 REMODELING Big50
www.WrightWorks.net - Facebook - Twitter - Carmel Remodeling
Indianapolis Kitchen Remodeling Contractor - You Can Get There From Here

ruskent

I learned early in the game that I could not be everything to everyone.

I guess its like anything else, some people will like it and some wont.

RizzoMaryland

David slew Goliath because of his arrogant boasting (and denial of the God of Abraham). David was more humble, but jumped to the occasion when his number got called and delivered so flawlessly that we are still talking about him, thousands of years later.

Flawless execution outweighs convenience and speed.

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"An idea is salvation by imagination"
Frank LLoyd Wright

ChrWright

I appreciate that sentiment, but that's not always the case.

It depends greatly on the service or product. As I said above, to some--speed & price are the most important things. Others will pay more for quality and service.

For example: Think about someone fixing their house to sell vs. someone fixing it for themselves.

__________________

Christopher Wright, CR: President @ WrightWorks, LLC/President @ Central Indiana NARI, Named to the 2010 REMODELING Big50
www.WrightWorks.net - Facebook - Twitter - Carmel Remodeling
Indianapolis Kitchen Remodeling Contractor - You Can Get There From Here

Double-A

Chris is barking up the right tree.

You need to understand who your client is and why they buy, then market to meet their need.

If I were building a small strip mall in an upscale area, I might have construction loans that prohibit me from being too fussy about every last detail, so the contractor I hire should be fast and efficient, so my income property comes online before the interest on my loan kills me.

On the other hand, if I'm self-financing an addition to my home or a new home, I would consider that time is less important than being able to live with the quality and execution of the work.

Know yourself, know your client, take a deep breath and express your talents by walking the walk.

See it, say it, do it now, and do it right the first time.

Oh, and avoid drama queens at all costs.

A business model is what you make of it and is easy to change. Sometimes being perceived as a smaller operation than you actually are is a great benefit, especially with that segment that wants personal service. Being seen as larger than you actually are is a good thing as well, as long as you don't overstep your abilities.

The size of the job is always less important that the client's idea of what the end result should be. My job is to make the two match and leave happy clients in my wake.

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"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006