Planning for Profits – Be Intentional About Your Money
It was a huge wakeup call for me when one day I was faced with needing to buy a new set of tires I desperately needed for my car, and no money in the bank or available credit to buy them. The realization set in that my habit of living from paycheck to paycheck was not workable.
The story of, “When I make more money, I’ll have more money,” was a lie. Because every time I got raises and my salary went up, I still never seemed to have any extra money for unexpected expenses.
Being in my mid-20’s at the time, and starting to look at not just surviving, but actually wanting to buy a house some day, I knew something had to change.
It was while channel surfing one Saturday morning that i stumbled upon the Suze Orman Show and her voice blared at me “your problem with not having enough money isn’t really about not making enough money, it has to do with the fact that your not being intentional with how you spend your money.” I immediate stopped changing the chanel, and started to pay close attention.
That wake up call, and her books and courses completely transformed my relationship with money and began to show me the principles of how to always make a great profit and have money in the bank when I want and need it.
In an effort to start being more intentional about my money, I started paying attention to where I was spending it – both the obvious places like rent and utilities, and the not so obvious ones like dinners out and overpriced coffee. In the process, I gained clarity about the choices I was making with my money.
Once I figured out where I was spending my money, the next question was, “How do I be more intentional about how I want to spend my money?”
I literally took out a calendar and jotted down when I was going to be paid every 2 weeks, and all of my expenses – rent, phone, utilities, etc. – that I was going to have to pay for. It was the most basic of budgets.
Then I started putting money in a savings account every 2 weeks to save for a house. It became part of the intentional process of how I spent money.
I tell you this story because a lot of times when I’m talking to clients about budgeting, they say a budget feels restrictive. Or it feels controlling. But the exact opposite happened for me.
When I started planning and budgeting, I felt more powerful about my money.
Within 3 years, my husband and I had saved enough to put a down payment on a condo. In fact, we still own that condo today as a rental property. That condo is proof that when we’re intentional about our money, it gives us so much more control over our destiny.
When I started my business, I incorporated the same practices of budgeting into my work with my clients. We talk about… What are your goals? How can we plan for them? How can we plan for profits?
A budget is not numbers on a piece of paper that you don’t look at. A budget is a living document that you have a relationship with. You look at it regularly. You use it to manage. By tracking it, you’re able to see where your money is going.
In today’s video, I share a couple of different tools you can use to do that:
The first is a Budget Goals Sheet, which I will share with you at the end of this post. Right now is a good time to start to think about your goals for next year. What’s your financial plan? What’s going to impact that plan? This tool will help you figure out all of that by asking a series of questions.
- What are your revenue goals for the next year?
- What gross profit margin do you want to make? As we’ve talked about before, this is a super important number that you want to be tracking. Contractors live and die by gross profit margin. So it’s important that you set set a goal for it and manage against that goal.
- How about net profit margin? For companies up to $25 million per year, net profit should be about 10-12%. Larger businesses might have a lower net profit margin.
- How much will you have this year in cash reserves? The industry standard is to have 3-6 months of overhead expenses in cash reserves.
- What are you personally going to make in earnings? If your business is a corporation, your salary should be included in general and administrative (G&A) expenses. If you’re a sole proprietor, your net profit goal will be much higher than 10-12% because that’s also your salary.
- What else do you need to factor in? Other questions to think about as you plan for profit:
- How many people will earn raises this year?
- Are there other organizational changes that will take place?
- What about equipment needs?
This is how you plan for profitability. By setting goals, you’re getting intentional about making money. This process forces you to be more purposeful about how you’re going to spend money when it comes to your expenses.
As you look to next year and think, “How do I plan for more profits?” make an operating budget for your company and be more purposeful about how and where you’re spending money. Then, every month look at your actual results compared to your budget and make course corrections to keep you on track.
The other resource I share in the video is a Budget Worksheet. (Please reach out to me via email if you want a copy of this one.)
The bottom line is… Be intentional about your money. That’s how you plan for profits. And that’s how you become powerful over your money.
In my book, The Profit Bleed, you can find money management tools and free downloadable resources that bring clarity to budgeting and profitability– and all you have to pay is shipping and handling. Make sure to check out the bundle of pre-packaged resources when you check out.
Before I go, I’d love to hear from you. Please leave a comment and let me know what works for you when it comes to managing money. Are there any sticking spots you need help with?
Warmest,
Vicki
P.S. Grab my free resource, the Budget Goals Sheet. This easy to use spreadsheet will help you start thinking about your goals for next year so you can plan for profits and get more intentional about how you spend your money.
Vicki Suiter helps people see their businesses differently, then gives them the tools to do things differently. Since beginning her business in 1990, Vicki has helped hundreds of contractors achieve the kind of success they never dreamed possible. Today, in addition to consulting, Vicki is an in-demand speaker at industry conferences nationally and internationally. Vicki’s articles and opinions have been widely shared in print and across the web. She is also the author of the book “The Profit Bleed” How managing margin can save your contracting business.
Pricing for Profits: The Story Your Numbers Tell
My client, Bob, called saying, “I’m a little freaked out, and I need your help.” He continued, “I’ve been working my butt off to get my revenue up, but my bottom line profit is dropping.”
If you’ve ever experienced your revenue increasing, but your bottom line staying flat, or worst yet declining, then you can probably relate to why Bob was freaking out.
Making a consistent profit can be a common problem for many contractors, but it doesn’t have to be your problem.
When things like this happen, I tell clients to start with the data. Numbers always tell a story. So Bob and I sat down together armed the company’s profit and loss reports.
Sure enough, he was right. Revenue was steadily increasing, but the gross profit margin had been falling little by little from 30% a few years ago, to 27%, to 25% this year.
Contractors live and die by gross profit margin, so this decrease was worth a closer look.
If you’re working super hard, but you’re just not seeing the results you want, keep reading . I’ll explain to you why this happens, and then, what you can do to change it. We’re going to talk today about what causes gross profit margins to drop, how to avoid “overhead creep”, and how to price for increased profits.
Bob and I started digging into the numbers, looking at individual projects to help identify what was causing the decline in gross profit margins. He was surprised at what he found.
There were big cost overruns on a few large projects. Digging further, Bob identified that there had been scope missing in the estimate. He’d known there were cost overruns, but he had not realized the magnitutde of their impact on his comapny until now.
Given the size of these projects in relationship to the comapny’s total revenue, it became clear they were the primary cause of the comapny’s gross profit margins declining in the past two years.
Once Bob saw his problem, he realized they needed a better “checks and balance” system in bidding. As a result, he implemented a review process, now having the field lead start looking at bids before they are finalized.
Now you might be thinking to yourself “I shouldn’t have to babysit my estimator.” And you’re right. You shouldn’t.
So how do you put in place a system to make sure you’re not losing out on profits before the estimate leaves the office? Here is what Bob did:
- Get more training for the estimator
- Have a checklist for estimating procedures that doulbe checks the numbers
- Have a 2nd set of eyes looking at estimates before they go out
Bob also started checking job cost actual to estimates weekly so he could catch any overruns early. The Results? His cost overruns started to go down, and his profits started going up.
Overhead Expenses
Once we had tackled the decline in gross profit margin Bob and I started looking at overhead expenses year by year. Like almost every construction company, his largest overhead expense is the cost of labor, and the second largest is facility expenses (rent, utilities, etc.).
What we noticed was that labor had increased 20%. But the volume of work had only gone up about 5%. What was causing that?
- Had staff wages gone up?
- Were they not charging enough in overhead markup in estimates?
- Were employees less efficient, thus causing there to be more non-billable hours?
We looked to the numbers to find the answer. In Bob’s case, he had taken on more labor a few years ago to accommodate a big job. The volume of work had gone down since then, but he hadn’t reduced the support staff. So, looking at the revenue per employee, they had more office support staff than they needed for the amount of work they were doing. It’s easy to let that happen, especially when everyone seems busy.
The same was true for facility expenses. They had needed more space a couple of years ago, but now they continued to pay for space they didn’t need. We considered their options. Could they renegotiate with the landlord? Could they sub-lease some space? Could they move?
Bob chose to tackle it on all fronts. The results? His overhead costs went down, and his profits went up.
Numbers Always Tell a Story.
Once we dug into the numbers, Bob no longer felt freaked out. Numbers give you clarity. When you have clarity, you have confidence. And when you have confidence, you can take more powerful actions.
By themselves, numbers don’t mean anything. Numbers mean something in relationship to something else. When you can compare numbers year by year, especially as a percentage of revenue, they start to tell you something. The same goes for comparing numbers to your goals.
Here are some key numbers you want to pay attention to:
- Revenue: This is sales, and for most contractors, this is as far as they look. If sales are good, they assume the business is good. This only tells part of the story. Comparing several years at once or to your goals will tell you another story.
- Gross Profit Dollars and Margins: Let’s break down what this means. Profit is the difference between revenue and what it costs to produce that revenue. And the margin is the rate of return that you’re getting. As I said, contractors live and die by gross profit margin. So, you want to measure it consistently against a goal.
- Overhead Expenses: This is what it costs you to run your business. Administrative labor, facility costs, marketing, etc. Look at this number as a percentage of revenue by line item, compared to goal, and compared to the prior year.
- Net Profit – what’s left over from gross profit after all the overhead costs are accounted for, including the salary of the owner. A well-run company will have a net profit between 8 and 10%m and a really well-run company has 10-12% net profit.
Planning for more profits starts with looking at your numbers:
- Compared to goal – the most profitable businesses have an operating budget they manage their company against.
- Compare results against prior year(s). I like looking at five years of data – it’s always illuminating to see the story the numbers tell.
In doing these things, just like Bob, you’ll be able to make changes that let you start planning for more profits.
In my next video, we’ll dig into that deeper as we look at the next step of planning for profits, which moves from looking at historical information on to planning for the future.
Until then, I have a free resource for you to help ensure you’re pricing for profit. Get my Overhead Breakeven Percentage Calculator. It will give you the formula for figuring out what your overhead breakeven percentage is. Hint: It’s not the percentage that’s on your profit and loss statement.
Getting clarity when you’re reading financial reports will help ensure you have:
- Consistent revenue
- Consistent gross profit margin
- Consistent net profits
In my book, The Profit Bleed, you can find tools and free downloadable resources that bring clarity to the financial health and profitability of your business – and all you have to pay is shipping and handling. Make sure to look at the bundle of pre-packaged resources when you check out.
Warmest,
Vicki
PS. I’d like to hear from you. Leave questions you have about the three drivers for profitability in your business or a comment about your profitable bidding strategies.
PPS. Don’t forget to grab my free and easy to use Overhead Breakeven Percentage Calculator tool that you can use to figure out what your real overhead breakeven percentage is.
Vicki Suiter helps people see their businesses differently, then gives them the tools to do things differently. Since beginning her business in 1990, Vicki has helped hundreds of contractors achieve the kind of success they never dreamed possible. Today, in addition to consulting, Vicki is an in-demand speaker at industry conferences nationally and internationally. Vicki’s articles and opinions have been widely shared in print and across the web. She is also the author of the book “The Profit Bleed” How managing margin can save your contracting business.
How to Price for Profit in Your Construction Bids
When my client Joe and I met a while back, he shared with me his recent revelation that has caused him to completely re-think how he bids projects.
It all started while reviewing his financial results (prompted by his concern over a declining bank balance). It didn’t take long for him to see a pattern… his company’s gross profit margin was steadily dropping. Joe knows that construction companies live and die by gross profit margin, which meant he needed to dig deeper. As he did, here are a few things he discovered..
1) Pricing in the estimate for materials was not the price they actually paid. There were two reasons for this:
a. The price paid for materials were not what was in the estimate. It’s easy to let this happen, especially if you do long term projects like Joe’s company, where there’s a lag time in between writing an estimate and placing a purchase order.
b. The quantity of materials purchased was over what was in the estimate. When they were self-performing the work (as opposed to using a subcontractor), the final material take off had far less material than they actually needed as shown in the plans.
2) The estimated hourly cost of labor for different positions was too low. This was only affecting the work that was self-performed. So the work done by subcontractors was profitable, but self-performed jobs were losing money.
In today’s video we’re going to talk about why this type of problem occurs on porjects and in bidding, and what you can do to make sure it never happens to you.
We’ll tackle one of the biggest challenges construction companies face when bidding jobs, and I explain how to always make sure you’re pricing for profit.
Creating profitability in your construction company starts with bidding jobs with accurate costs. So how do you estimate construction costs accurately?
Let’s go back to the problems Joe discovered. I’ll share what changes he made to address them and my own recommendations to make sure you’re pricing for profits.
Estimating Materials
In order to be more effective at estimating materials, get a foreman or production manager to look at the bid as a second set of eyes. It’s important that the production team is involved in the estimate to make sure nothing is left out or underestimated. They will help make sure the full scope of materials is included.
Second, do purchase orders at the beginning of projects so that the estimate is based on fixed and agreed upon prices. This is especially important if you do long-term projects because the cost of materials may go up between making the estimate and doing the work.
Estimating Labor
Labor is your #1 risk as a contractor. So you want to take the time to estimate labor costs accurately.
Just like with materials, involve a foreman or production manager to reduce the risk of leaving out people or underestimating hours. By taking the time to have a production person double check estimates for labor hours and materials before they go out, you’re reducing the risk of declining profits.
But how do you make sure you’re estimating the correct amount for labor costs? The problem most construction companies face is that they don’t really know their real cost for employees. That was the case with Joe. He was not clear on his actual costs.
Did you know that the cost of a construction employee has gone up 20% in the last couple of years in some areas of the country? If you’re not accounting for a staggering change like that, you’re losing out on profits.
So it’s important that you get super clear on the base costs per employee before preparing a bid.
Base costs per employee per hour:
- Gross wages
- Employer taxes – FICA, Medicare, Social Security, state unemployment, and city taxes. Combined, these can range from 7.65% to 11%, depending on where you are doing business.
- Worker’s comp – these costs will be higher or lower, depending on the position.
- Benefits – health insurance, 401K, etc. Many companies have offered better benefits recently to compete in the job market, so make sure you add those changes in.
- Union costs– If you’re a union shop, add dues and union benefits.
I offer a free and easy to use Labor Cost Calculator tool on my website that you can use to stick in labor costs for different positions.
When you’re estimating labor, here are my recommendations:
- Always calculate bids based on position – not person – at the highest paid position in that range, so if the range is $15 to $18 per hour for example, go with $18 per hour on the estimate.
- If you’re bidding on a long-term project, labor costs will go up year by year. Plan that increase in there. You also might include in the estimate that the bid rate for labor is only good up to a certain date before the contract is signed. And if work goes longer than a set amount of time during the contract, labor rates will go up. This is especially true if you’re a subcontractor.
- If you’re a union shop, remember that union dues and extra benefits go up every 12 months, so plan that into your pricing.
It comes down to this… Get clear about pricing. Get clear about scope.
By using these smart strategies, you don’t give away your profits. In my next video, I’ll share how to mark up for overhead and profit on top of the base costs we talked about today.
Toeing the line between bidding competitively and making sure you’re pricing for profit is one of the many challenges of running a construction company. In my book, The Profit Bleed, you can find tools and free downloadable resources that can help you bid accurately and successfully – and all you have to pay is shipping and handling. Make sure to check out the bundle of pre-packaged resources – they’ll help you get traction more quickly.
Warmest,
Vicki
PS. I’d like to hear from you. Leave a comment about your successful bidding strategies or questions you have about estimating materials and labor costs.
PPS. Don’t forget to grab my free and easy to use Labor Cost Calculator tool that you can use to calculate labor costs for different positions.
Vicki Suiter helps people see their businesses differently, then gives them the tools to do things differently. Since beginning her business in 1990, Vicki has helped hundreds of contractors achieve the kind of success they never dreamed possible. Today, in addition to consulting, Vicki is an in-demand speaker at industry conferences nationally and internationally. Vicki’s articles and opinions have been widely shared in print and across the web. She is also the author of the book “The Profit Bleed” How managing margin can save your contracting business.
A Contractor’s Succession Plan – Part II
This is the second part of a two-part series on succession planning for a contractor, and the process of finding and developing a new leader for a business as the owner nears retirement. If you’re thinking of someday selling a construction company, wondering about the future of your business, or curious about what your retirement could look like, you don’t want to miss today’s interview.
In this video, we’ll discuss what succession planning is, what does it take to sell a business, what has worked really well for my guests, and what would they do differently after going through the succession process.
I’m talking to Tom and Barbara Weiher, the original owners and founders of Carmel Builders in Milwaukee, WI. Carmel Builders successfully transitioned the business from Tom and Barbara to their son, Louis, a few years ago. (You can watch my interview with their son Louis here.)
Tom started the design, build, and remodeling firm 40 years ago. Ten to 15 years ago, he started wondering, “How’s this going to end?” It seemed ideal to him and his wife, Barbara, for one of their five children to take over the business to keep it in the family. But at the time, none of them were working in the business or interested in taking it over.
When their oldest son, Louis, came to work for them, they floated the idea by him, and at first, he wasn’t keen on the idea. He had come on board because they needed a lot of help with accounting, and he had that expertise. After a time, they saw they needed help with sales. When they asked him to take that on, he agreed to grow his role. Slowly, Louis warmed to the idea of buying the business from his folks.
Day to day, they talked openly with Louis about increasing his responsibility and what it might look like to eventually turn the business over to him. They realized, as Tom said, “We need to find somebody who can help us steer through this transition process.”
“It’s an interesting thing when you [go through a succession] with your children because you’re still the parent, but it’s like your child is taking away your baby,” Barbara said. “The issue we did not want to happen was some sort of family rift that would damage our relationships. We didn’t want this to get in the way of that.”
After interviewing three business coaches, they chose a consultant who had expertise in family-owned businesses. In fact, he had a proven family succession planning process with specific steps.
That appealed to them because the consultant could understand the family relationships as well as the strategic planning piece. And he was direct and honest, which they really appreciated. “He didn’t allow us to avoid the touchy, hard questions,” Tom said.
Although you might feel comfortable talking to clients all the time about money and budgets, it’s different when you’re talking about personal subjects like:
- How much money you need to retire?
- How much can the successor afford to pay for the company?
- How much involvement do you want in the business once you retire?
- How would it feel to be told what to do by your child once he or she is CEO?
Getting Finances in Order
It took a full three years from the time they started working with a consultant until the succession was complete. And during that time, they had a lot of work to do to get their house in order. “This takes time. It takes a commitment. And it takes money,” Barbara said. Both Tom and Barbara agree that it was money and time well spent.
They met monthly for two to three hours with the consultant, and a lot of that time was spent on financials: putting goals in place and tracking their sales, expenses, and income. “Everything really flows out of the numbers,” said Tom. “I thought we understood the numbers, but this was an awakening.”
Getting clarity on the numbers had two effects:
- They started getting better, more consistent results once they were measuring results against goals and managing the gap between them.
- It gave Tom and Barbara peace of mind. They knew that once they weren’t involved in the day-to-day operations, the financial discipline would continue so the company would remains successful for their son and their retirement.
The Plan’s Structure
Every succession plan is different. They structured the buy-out in a way that worked well for everyone. They created two classes of stock: voting and nonvoting shares. Barbara and Tom each got 30% of the voting shares and Louis got 40%. So together, Barbara and Tom had a majority and remain involved in an advisory role.
In overall shares, Louis owns 94% and they own 6%. They also get paid a salary as board members.
“We’ve worked hard to enjoy these years,” Barbara said. This arrangement worked well for Louis too because he didn’t need to come up with a large amount of money to buy them out.
Tom added, “I was really struck by how much care and concern Louis had for us that we would be cared for.”
We also talk in the interview about the other two parts of succession planning. It’s not only about who owns the company, but also who manages and who leads the company.
It surprised Tom how easy it was to hand over the leadership and management. They structured it so it was a smooth process. “I don’t even know what day I officially retired.” he said.
It was more complicated for Barbara. “[Tom] never felt a sense of propriety in handing over the business. He was grateful. I had a harder time than Tom. I realized I would have a real struggle answering to my son, and I didn’t want us butting heads, so I retired earlier than I thought I would.”
“Our own self interest was that the company succeed. We didn’t want to get in the way. Everything was set up and structured so that we had to let go,” Tom added.
Whether you’re considering selling your construction company, looking at retiring, or simply wanting more free time doing what you enjoy, building systems that can sustain success in your absence, as Tom and Barabara point out, is key. In my book, The Profit Bleed, you can find tools and free downloadable resources that can help you get those process and systems in place. Make sure to check out the bundle of pre-packaged resources when you check out – they’ll make this process so much easier for you!
Warmest,
Vicki
PS. Get your free checklist 12 Tips to Successful Succession.
PPS. Did this interview spark questions for you as you think about succession planning? Leave a comment below if you have questions we didn’t answer or share a helpful tidbit you have about this topic.
Vicki Suiter helps people see their businesses differently, then gives them the tools to do things differently. Since beginning her business in 1990, Vicki has helped hundreds of contractors achieve the kind of success they never dreamed possible. Today, in addition to consulting, Vicki is an in-demand speaker at industry conferences nationally and internationally. Vicki’s articles and opinions have been widely shared in print and across the web. She is also the author of the book “The Profit Bleed” How managing margin can save your contracting business.
A Contractors Succession Plan – Part I
Today, I’m sharing part one of a two-part series about succession planning. In the contracting industry I see so many folks who have been working for 30 years, 40 years, and beyond, who want to transition out of their businesses but they don’t know where to begin and as a result, continually put it off.
Knowing how to plan for your phase out or complete succession from your business is the pathway to you being able to reap rewards from the hard work the you’ve put into it over these many years. And proper planning, as my guest today will share with you, can help you save money and increase your return as well.
One of the companies that successfully made the transition is Carmel Builders in Milwaukee, WI. Today, my guest is Louis Weiher, the owner and president since 2016. In my next blog post, I’ll interview his parents, Tom and Barbara Weiher, the founders of the 40-year old design build build firm.
Whether you’re on either end of a possible succession or just wondering about your eventual retirement, these two interviews will help you navigate your way to a successful transition.
Louis’s number one piece of advice is to start early. “We should have started sooner and planned it out better because between my dad, my mom, and I, we all wanted the exact same thing, but it’s still really hard to get to that.”
Like many family-owned companies, it was just an assumption from the time Louis came on board (after a stint in the hotel industry) that he would take over one day, but they didn’t plan anything out for the first few years.
It took several years to make a clear decision together that he would take over the business. It would have kept things simpler and saved money, he said, if they had sat down for those conversations earlier.
When I asked what part of the conversation he wishes they begun earlier he said “making the distinction of the differences between who owns the company, who manages the company, and who leads the company. Those are three separate things. Ownership is what most people initially think about, and management is fairly straightforward, but leadership is a sticking point. Who do people look to when challenges arise? Whose actions set the tone of the company?”
Louis recommends getting the management role in place first, then transition the leadership, and finally the ownership can happen whenever. Ownership doesn’t affect the employees as much as who they’re reporting to and who is leading the vision of the company. Looking back, he wished they had communicated the leadership transition plan and timeline to the rest of the team earlier on and more clearly. Staff knew it was happening, but regularly checking in would have been helpful for everyone and made the transition smoother.
I particularly liked his suggestion of setting a transition job description that includes what the ascending leader will be doing this year, next year, and so on in terms of taking over management responsibilities and leadership of the company. You can get my outline for 6 Steps to Writing Great Position Agreements to help you get this piece in place.
Be sure to nail down a firm mission statement and set of core values before going through a leadership transition because they can guide you, as well as bring the staff and the new leader into alignment. It builds a lot of buy-in from the team.
Louis says for them, core values answer 90% of the questions and challenges that came up with he and his folks. Carmel Builders’ core values are:
- Be kind.
- Do the right thing.
- Seek to collaborate.
- Consider the future.
What is remarkable is how those core values continued the legacy of his parents through to his leadership. It’s a guiding post for every decision, and yet it’s so simple.
He also shared the financial component of their succession. For many owners, the business is their retirement plan, and that was the case for Louis’s parents. But at the same time, they didn’t want to see their son go into debt to buy the company. So the arrangement they came up with was creative and benefitted everyone.
- Louis became majority owner
- His parents retained a minority share of the corporation, and thus continue to get profit distributions
- His parents got to keep a sense of connection to the business, while Louis maintains the operations.
His advice to the successive generation when considering the financial arrangement is “Don’t take for granted how big of a deal it was for the previous generation to start something from scratch.”
Along the way they, and he, spent time building the foundation on which the company could be transitioned to the next generation. They put in place process, procedures, and standards – all of which helped build a solid foundation that let Loui’s parents gradually transition out of the business.
Whether your looking to simply work less in your business, or transition it to the next generation, building systems that can sustain success in your absence is key. In my book, The Profit Bleed, you can find tools and free downloadable resources that can help you get those process and systems in place – and all you have to pay is shipping and handling. Make sure to check out the bundle of pre-packaged resources when you check out.
When I asked Louis if he had any final words of advice for anyone thinking about succession-planning he said, “It’s more important to focus on what you agree on and don’t try to fix everything you disagree on because you’re never going to agree on everything.”
Make sure to watch the whole video interview with Louis, and stay tuned for A Contractors Succession Plan Part II where I interview Louis’s parents Tom and Barbara.
Warmest,
Vicki
PS. Get Louis’s free checklist 12 Tips to Successful Succession.
PPS. I’d love to know if this interview resonated with you as you think about succession planning. Leave a comment below if you have questions we didn’t answer or share a helpful tidbit you have about this topic.
Vicki Suiter helps people see their businesses differently, then gives them the tools to do things differently. Since beginning her business in 1990, Vicki has helped hundreds of contractors achieve the kind of success they never dreamed possible. Today, in addition to consulting, Vicki is an in-demand speaker at industry conferences nationally and internationally. Vicki’s articles and opinions have been widely shared in print and across the web. She is also the author of the book “The Profit Bleed” How managing margin can save your contracting business.
How to Close More Sales and Three Ways to Get More Referrals
In this week’s blog, I’m super excited to be joined by Chip Doyle of Sandler Sales. Having successfully trained hundreds of people to be great salespeople, what Chip talks about is a proven approach for effective prospecting that results in closing more sales.
In my interview Chip shared some best practices around sales and prospecting that are simple to implement, and don’t require you to be “salesy.”
“To create fruitful prospecting (i.e. be attracting the RIGHT customers), you need to control the lead source,” Chip shares in this interview.
I especially love when Chip explained how “every opportunity you have to connect with customers and prospects is an opportunity to prospect for more customers, thus an opportunity to close more sales.”
Here are three ways to get more referrals:
- Talk with current clients – make the ask
- Call past clients – capitalize on this gold mine
- Public speaking – be seen as an expert
I asked Chip how those of us who are super busy (that’s everyone I talk with), can find the time to maintain active prospecting. Here are Chip’s top three practices to help you be more purposeful in your prospecting:
- Be intentional about it – make a plan for WHAT you’ll be doing to prospect – it’s just like identifying project scope.
- Make time for prospecting – put it in your calendar – it’s just like having a project schedule with milestones.
- Put a reminder on your desk of WHY you’re prospecting and working to generate leads. If you’re doing it for your family, put a photo of them on your desk and add a note that says “prospecting” on it to remind you to be proactive!
Here is a pro tip Chip shared in our time together:
When asking for referrals, be sure you are clear about what you’re looking for and be able to clearly articulate that to someone who wants to refer business to you.
I’d love to hear how this interview resonates for you and how you see you can implement improved proactive prospecting in your business. Feel free to leave a comment below to share any tips you have on prospecting and closing more sales.
Warmest,
Vicki
p.s. To receive Chip’s newsletter, send him an email at [email protected] Connect with Chip on Twitter and get his latest updates and tips @chipsell. And you can grab a copy of Chip’s book, “Selling to Homeowners The Sandler Way” here.
p.p.s If you’d like to get more tools to help you close more sales, check out my Sales Process Toolkit – a step by step guide to controlling the sales process, and allow you to close more sales.
How to Charge for Pre-Construction Services
As he sat down across from me, I asked Josh “how have things been going this past month?”
“Last week I submitted the fourth bid to a client who has an incomplete set of plans and is not clear on exactly what they want. This whole thing of helping people figure out what they want to design, and what it will take to build it, while simultaneously asking me to bid and re-bid, and NOT getting paid for it is making us crazy!”
“What about instituting pre-construction agreements as part of your process of project development?” I asked. “Easier said than done!” he exclaimed.
While I can completely appreciate that making a change like this in your business can take time, it’s one that I’ve seen can make a HUGE difference in the overall success of your projects AND profitability of your company.
It was about a week after Josh and I’d had that conversation that I met my blog guest, David Davison of Realty Restoration, Inc. David has a completely different perspective on doing pre-construction agreements and has been HUGELY successful in implementing them in his design build firm.
In this video, David shares how he navigates this conversation with the client, and how he justifies the costs in a practical and grounded way.
To help you implement pre-construction services, David was generous enough to share with us the Pre-Construction Agreement Realty Restoration, Inc. uses in their business. A super generous offer – thank you David!
I hope you’ve found this video to be helpful in your leadership journey. If so, please share it with a friend?
If you have other thoughts on the topic, I’d love for you to share them below.
Warmest,
Vicki
p.s. In this week’s blog, my guest David Davidson with Realty Restoration, Inc., shares with you how to charge for pre-construction services so you can start making projects run more smoothly and be more profitable too!
p.p.s. David generously shared with us the Pre-Construction Agreement they use so you can implement this into your business too!
Vicki Suiter helps people see their businesses differently, then gives them the tools to do things differently. Since beginning her business in 1990, Vicki has helped hundreds of contractors achieve the kind of success they never dreamed possible. Today, in addition to consulting, Vicki is an in-demand speaker at industry conferences nationally and internationally. Vicki’s articles and opinions have been widely shared in print and across the web. She is also the author of the book “The Profit Bleed” How managing margin can save your contracting business.
De-Mystifying Online Marketing – And the ONE thing you can easily do create a stronger online presence
If you’re like me, the whole world of online marketing can often feel very confusing and daunting. This week in my interview with my friend and colleague Joleen Emery she de-mystified social media marketing in a really lovely way. In the process, she also helped me understand some key areas where we could improve our “digital footprint” as she calls it (this is explained in the video).
Joleen talked about how to get more people calling us, and how to get our business to show up on the first three pages when someone does a Google search – without paying for ad space!
No cost and no confusion marketing – who doesn’t love that?
As we talked, she made a clear distinction of the difference between outbound and inbound marketing, and how and when you’d want to do each. I found her simple and clear distinctions refreshing and it helped me better understand how to approach both.
At the end, Joleen shared the exact steps to take (using her guide) to create a stronger online presence for our business.
If you want to increase your visibility with prospects, and de-mystify social media marketing for yourself, then give the video a watch.
It’s my sincere hope that this content helps you to grow, thrive and prosper in your business and in your life!
Warmest,
Vicki
p.s. Get Joleen’s “10x Your Lead Generation” step by step guide to getting you on the first three pages when someone does a Google search, without having to pay for ad-space.
p.p.s If you found this content is helpful, would you please share it? Thanks!
Vicki Suiter helps people see their businesses differently, then gives them the tools to do things differently. Since beginning her business in 1990, Vicki has helped hundreds of contractors achieve the kind of success they never dreamed possible. Today, in addition to consulting, Vicki is an in-demand speaker at industry conferences nationally and internationally. Vicki’s articles and opinions have been widely shared in print and across the web. She is also the author of the book “The Profit Bleed” How managing margin can save your contracting business.
Project Schedules that Make You Money!
When three different clients told me about Robin and his brilliance around making money in scheduling, I knew I needed to interview him for my blog. And I’m so glad I did.
For over 30 years Robin Beauchamp has been increasing profitability on his projects by employing an approach to scheduling that has been key to getting teams to stray focused, subs to show up when needed, clients to make decisions quicker, and design teams to stay on track.
In my interview, Robin shared how he keeps project teams aligned on goals, delivering on promises, and working as a cohesive team. And he does it without having to cajole, threaten or throw anyone under the bus.
Listen to today’s video blog and learn how you can make your projects flow more smoothly, and have your schedule make you more money!
It’s my sincere hope that this content helps you to grow, thrive and prosper in your business and in your life!
Warmest,
Vicki
p.s. If you haven’t already gotten your copy of my book, The Profit Bleed, check it out here. It’s now also available on Kindle.
p.p.s. I’m committed to helping contractors to grow, thrive and prosper, so if you found this content to be useful, would you please share it with a friend or associate you think could value from it too?
Vicki Suiter helps people see their businesses differently, then gives them the tools to do things differently. Since beginning her business in 1990, Vicki has helped hundreds of contractors achieve the kind of success they never dreamed possible. Today, in addition to consulting, Vicki is an in-demand speaker at industry conferences nationally and internationally. Vicki’s articles and opinions have been widely shared in print and across the web. She is also the author of the book “The Profit Bleed” How managing margin can save your contracting business.
Hiring The Best / Maximizing Margins
If you ever hired someone who didn’t work out in the job, and not sure where you went wrong, you’ll want to watch this week’s video.
If you want to know the secret to increasing your profit margins, then you want to watch this week’s video.
Jared Gossett has been a successful builder for many years, and a while back started a radio podcast that is all about helping Builders and Remodelers take their businesses to the next level. When Jared asked me to be a guest on his Building Optimal Radio show and talk about best practices around hiring and managing profit margins, I jumped at the opportunity to collaborate with someone else passionate about helping contractors build successful businesses.
It’s my sincere hope that this content has helped you be better at interviewing and gave you some ideas for ways to increase your margins.
Warmest,
Vicki
p.s. As I mention in the video, if you’d like to get a copy of my book, The Profit Bleed, for FREE (you just pay shipping and handling) then make sure to check out this limited time offer.
Vicki Suiter helps people see their businesses differently, then gives them the tools to do things differently. Since beginning her business in 1990, Vicki has helped hundreds of contractors achieve the kind of success they never dreamed possible. Today, in addition to consulting, Vicki is an in-demand speaker at industry conferences nationally and internationally. Vicki’s articles and opinions have been widely shared in print and across the web. She is also the author of the book “The Profit Bleed” How managing margin can save your contracting business.