Rich Contractor — Page 14

Find A Niche And Focus On Speed

by Jeff

Now many of you no doubt have big plans to build a full-service remodeling company, and perhaps you’re already knee-deep in the process of learning how to become a general contractor, but I’d ask you to put on the brakes for one second and hear me out on this one. I would contend that for many people, a simpler, more streamlined service business might be the better way to go. Let me explain.

I’m always impressed by the speed and efficiency that characterize the most successful local carpet cleaning companies. They’ll arrive in a basic, lettered van, zip through a few rooms of carpet like it’s nobody’s business, and less than 30 minutes later be out the door with $100 in hand. Those that repeat the process an average of eight times a day have quite a cash machine working for them. Furthermore, those that can accumulate 5-10 vans and workers, each visiting eight homes per day, can start counting the days to early retirement and seven-figure wealth. They’ve figured out how to perfect a system that fulfills a very specific consumer need, and then expanded the business without straying from their specialty.

There are several factors that contribute to the success of this kind of service business:

By specializing in one service, systems and procedures become easier to replicate and perform. You can hire less-skilled laborers (who therefore don’t expect to make a lot of money) because they don’t have to juggle varied tasks or responsibilities. Simply spend a few days training them on their main task (in this case carpet cleaning), and then with every carpet they clean thereafter they’ll become faster and more skilled, to the point that they hopefully need little or no oversight. By contrast, a more complex business that requires the laborer to have or accumulate a multitude of different skills will almost always struggle to find qualified personnel that will stick around for any period of time, and the ones that do are more likely to command a premium wage.
Material and equipment costs are lower and more predictable with a niche business. Businesses that try to do too much or provide too many services are often burdened with all sorts of equipment that may or may not be utilized on a consistent basis. That’s extra equipment that needs to be purchased, maintained, repaired, and stored. And all that upkeep means extra manpower, less productivity, and more money out of your pocket. Keeping your service and equipment setup as predictable and simple as possible will serve you well as you look to expand.
A one-service company can more easily claim to be an “authority” in their local market. Most quality-minded homeowners today want to know that they are hiring an “expert” in a specific trade or field, not a jack-of-all-trades or handyman type of service.
Speed, and therefore profit, is more easily achieved with a single-service business because it often avoids the pitfalls of a more complicated, custom-design type of business. Ask any full-service remodeler what his pet peeves are, and one of them is sure to be customer indecision when it comes to design and color schemes. Enormous amounts of time are lost when a customer changes their mind on what type of cabinets should be installed, what color the walls should be, whether the tile should be in a subway or diagonal pattern, etc. Lost time equals lost profits. Pursuing a niche, non-custom service business like carpet cleaning or gutter-guard installation allows you to bypass these kinds of problems and focus more of your energies on perfecting your system and achieving speed and productivity.

Of course there are exceptions to every rule, and the multitudes of successful and wealthy full-service remodeling business owners in every American city would surely take offense to many of this post’s precepts. Just be aware that the more varied and complex your services, the more focused and organized you (and your employees) must be; the greater the number of moving parts, the higher the chance of a system breakdown. Full-service remodelers and builders also must be keenly aware of margins and cost projections, lest one bad job send your whole quarter down the tubes. The nice thing about something like carpet cleaning is that if you have one pain-in-the-butt job that you lose money on, it’s over in less than an hour and you can move on to the next one. Not so with a more complex service.

My personal preference is for a specialized company that is more able to focus on systems, speed, and productivity. A few add-on services could be justified from time to time, but only if they won’t interfere with your core business and its mechanisms. A good example would be the carpet cleaner that adds upholstery cleaning to his list of services because it often utilizes the same equipment and materials and only adds a small amount of time to the job. Just remember that simplicity is conducive to quickness which is conducive to profits.

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20 Seconds That Will Make Or Break You

by Jeff

You’ve heard that first impressions are everything. Well, in the world of contracting it’s often the ONLY THING. When you go to a potential customer’s home to give a bid, quite often they’ll be watching you from the moment you pull in the driveway. Believe it or not, that 20 seconds or so that elapses between getting out of your truck and shaking their hand at the front door will very often determine whether you get the job or not. It’s got everything to do with how you look, walk, and talk. The packaging and presentation of a product is often perceived as more important than the product itself, and if you think this doesn’t apply to home improvement services then you’re delusional. You ARE the product in this scenario, and the sooner you come to grips with that reality the better. Part of learning how to become a contractor involves paying more attention to your image and creating a sort of persona for the customer.

For starters, drive to the estimate in a nice truck. Pull up in a Ford Escort and you can kiss the job goodbye (what are you, a contractor or a 16 year-old scooting over to your job at McDonald’s?). Whip into the drive with that old beat-up piece-of-crap truck and you’re just wasting your time (homeowner will think that if you drive junk, then you’ll do junk work). I’m not saying you need to go out and buy a $40,000 behemoth F-250 with tinted windows and a helicopter landing pad in the bed, but at least find yourself a truck that is a newer model and looks clean and well-maintained. I recently bought a nice, used F-150 from a dealer for under 10 grand. No, it doesn’t have a “pimped out” stereo system or even power locks for that matter, but it looks clean and new, and that’s what really matters for your image.

Now, as you step out of your truck, the real scrutiny of you as a person begins. Homeowners want to see the following traits, in no particular order:

A relatively in-shape person. It’s a sad but true fact that lean people tend to get hired more often than their overweight counterparts. Subconsciously, people think that if you don’t have enough discipline to master your own body, how will you ever find the motivation to complete a home remodeling job that may involve difficult and often frustrating phases of work.

Clean, professional, wrinkle-free attire. Ideally you’d be wearing long khaki pants (no cargo pants) and a tucked-in polo shirt with your company’s logo emblazoned on the front. Absolutely no gym shoes. Any tattoos should be covered up if possible. Skip the ball-cap, or if you’re going to wear it at least make sure it’s clean and subtle.

Short, well-groomed hair and beard, if applicable. A lot of contractors have a problem with this one, but it is what it is. People see long hair and the first word that comes to mind is “punk”. It’s obviously a totally bogus and unwarranted assumption, but it’s reality. For the love of pete, if you’re going to keep the hair at least tie it back out of your face.

A confident walk. No slouching or moping on your walk up to the door. You should look like you want to be there and that you’re excited to meet this person. Who would you rather hire: a guy that looks genuinely excited about his work and business or somebody that looks like they’d rather be at the dentist?

A person that looks old enough to be experienced. If you’re 32 but look 18, you need to take measures to make yourself look older. Wear glasses, switch the Casio watch out for the Movado, comb your hair in a different way – whatever you have to do to age yourself. I once posted a photo of myself on our company website so that potential customers could see how clean-cut I look, but it backfired because it made me look like a teenager, even though I’m in my 30’s. The phone calls suddenly stopped. I removed the photo and it started ringing again. Crazy but true.

A wide, clean, odor-free smile. Self-explanatory.

A confident, firm handshake. When that front door opens you absolutely MUST give a friendly “hello” (no matter how bad your day has been), introduce yourself, shake their hand like you mean it, and look them in the eye.

If you can meet all or most of these standards then there’s a good chance that the homeowner has already made up their mind that they like you and that they want to work with you, or at the very least that you’re on their short list. This assumes, of course, that you know your business and don’t completely blow it during the rest of the meeting, but getting off to a good start will put the customer at ease and make the sale that much easier. Those first 20 seconds are paramount to the success of your business. Fail to prepare for and master them, and your company will struggle to survive. These tips may seem shallow or mean-spirited, but it’s reflective of our society, like it or not. If you want to succeed you have to learn the rules and play by them. If you’re the stubborn kind that refuses to change for anyone or anything, I applaud you. Just don’t expect to ever become a rich contractor.

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When The Customer Is A Jerk

by Jeff

In my last post I detailed the benefits of providing great customer service, namely the financial rewards that your company will ultimately reap. But what about those rare instances where a client or homeowner is completely unreasonable with their demands or disrespectful to you or your employees? At what point do you stop taking it and start standing up for yourself?

I almost wish that every signed estimate for a job included clear terms about expected behavior from both me AND the customer, however impractical that might be. Specifically, it would politely request that they give us some space to work without constant over-the-shoulder surveillance (this presumes that we have not given them reason to doubt our skills), that they treat us with dignity and respect (presuming we have extended it to them), that they make and finalize all design specifications and special requests prior to the work being started (and really before the estimated price is agreed upon), that they make an effort to keep the lines of communication open at all times to prevent confusion or misunderstandings, and that they pay for services rendered in a timely fashion so that I don’t have to get ugly or send out a letter demanding payment.

Don't let a jerk bring you down to their level if at all possible.

Since setting expectations for your customers in writing is probably not wise from a business standpoint, you instead need to prepare yourself for that occasional nutjob that makes your life less than stellar. Note that I’m not saying that a homeowner with high expectations is a nutjob. They SHOULD have high expectations, and it’s our job to meet or exceed them. I’m talking about the homeowner that expects you to “throw in” two days of free labor because they changed their mind on design after installation. I’m talking about the homeowner who questions your every move and maintains such a close and constant watch over your shoulder that by the time you’re finished installing the wood floors, you can name what kind of gum they chew, what deodorant they wear, and how many times per minute they exhale. I’m talking about the homeowner that cusses out one of your guys and calls him stupid for something really petty, like parking in the wrong part of the driveway. Those of you that have been in the business for any amount of time know what I’m talking about.

So what to do in these situations? First and foremost, keep your cool. Don’t let some guy with an ax to grind get inside your head. If you have a meltdown just because he’s having one, you’re the one that stands to lose more. It’s your reputation and your business that’s on the line. Usually the best approach is just to suck it up, bite your lip, finish the job, and move on. Remind yourself that sometimes you’re going to run into these kinds of people but that you won’t allow them the power to get to your emotions, because even if they’re wrong and you’re right, if you don’t finish the job and finish it well, you can bet that they will spread the word in all directions that your company is a joke. Try to negotiate. Find middle ground. Do what you can to move the job forward to its completion, if not for the homeowner then for yourself and the future of your company. Reputation in this industry is key, and the further you can bend without breaking, the better! Part of learning how to become a contractor who is successful involves hardening yourself a little bit in order to weather the occasional lunatic. You have to train yourself not to get too caught up in the drama.

Now as for the guy that threatens you or calls you or your valued employee a (bleeping) idiot, it’s a different story. When things really get out of control and an annoying customer has become an abusive customer, you have an obligation to stand up for yourself and your people, even if it’s gonna’ cost you. Where that line in the sand is I can’t tell you, but chances are you’ll know in your gut when it’s been crossed. Ask the homeowner to calm down and/or apologize, and if they will not then gather the crew and your equipment, load up as quickly as possible, and don’t look back.

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