Contractor’s Corner: Winning when times are tough - Dec 2020
By Dave Stafford
When times are tough, as they have been for many of us over the past year, navigating the minefields of government edicts, regulations, health challenges and personnel idiosyncrasies sap one’s creative energy. “I’d just like to sell a profitable job, complete an installation and get paid without a lot of drama.” Winning, by whatever definition, may be more a state of mind and mental preparation than anything else.
Look for the best in people but expect surprises. We had a recent experience with a long-term client who didn’t pay his invoice on time. After several calls, with no payment forthcoming, we talked with our attorney. He said, “I’ll bet he lost some funding for the project and is not paying anyone completely. How long has it been since you’ve performed work at the site location? If within 90 days, you’d better consider filing a mechanic’s lien and see if you can pressure him to pay you off. Such a lien will tie up the real estate and present a cloud on the title until removed.” And that’s what we had to do. While the client was angry at our tactics, he did pay up in full. His comment, “I was going to pay you, I just needed more time,” was just bravado. Other suppliers apparently recovered about 30 cents on the dollar, after a year.
You may have found you need fewer employees or have to trim payroll after several months of limited activity. Take a hard look at your low-energy producers and concentrate your efforts on those others who are more productive. In one downturn, we decided to terminate at least one person in every segment of the business to reduce overhead. Each manager had to look at his section’s personnel to see where cuts made sense-not a fun time for anyone and painful to execute. There were no secrets, courtesy of the company’s grapevine. After the abrupt reduction in personnel, there were a few pleasant surprises, as with Adam. He seemed to catch on fire, and when asked about his sales results, he said, “I just made sure I asked for the order every time I made a presentation, even when I knew there was no chance. Imagine my surprise when a customer’s response was, ‘Sure let’s go ahead. No use putting it off.’” With his newfound confidence and enthusiasm, Adam became one of our top producers.
Have you taken a long, careful look at your stable of suppliers? We all become complacent and willing to drift along with that which is comfortable. Should you be having a conversation about increasing your credit line or expanding product offerings? I’d suggest looking at your current business mix and refining your offerings by cutting those that are marginal. Be more important to fewer suppliers by concentrating your focus. Have a meeting with your sales team and ask them to write down their top seven items. “Which are your three favorites and which three would you drop? What services are most in demand and which ones should we eliminate?” That will spark valuable conversation about some efficient changes.
Develop that “slight edge” in your quest for profitable business. Become more important to select customers who can give you more business. Many well-meaning clients try to “spread the business around” and be a friend to everyone; that really doesn’t promote much loyalty. You might want to mention that. “Hey, Jeff, we do appreciate your business but we’d like to do more with you. How can we make that happen?” If he has trouble with the question, then probe further. “What if we were able to offer you a 24-hour response time on any service call; would that help?” Proffer several ideas that might just make sense to him.
I had such a chance with a small, local school system. The central facility manager was harried because he had ten different locations and was attempting to schedule multiple flooring projects with different companies at the same time. “Jack, let me throw an idea your way. I’ll take these small jobs off your hands at a competitive price and get them done within a week so long as you’ll guarantee me access. You can justify this because they must be done quickly and the price will be comparable. Fair enough?” Jack said, “You do that and we’ll find a way to do a lot more business.” We did the jobs to rave reviews, and Jack kept his word. Our business with him tripled over the next year, and doubled again the following year.
Maybe it’s that extra twinkle in your eye or a great smile, but people sense when you’re excited and enthusiastic over a new product or service and cannot wait to tell your story. That extra “something” is your slight edge that will separate you from your competition. Maybe it is an advertising hook on your website or a new specialty product that has unique appeal. Perhaps your sales team is finely tuned in making it easy for your prospect to make a buying decision. When the customer service process is friendly and intuitive as well as positive, good things happen; people tell others and take the time to write great reviews.
Be open to new methods, procedures and communication. The pandemic has touched all our lives. Most of us have been forced into Zoom, RingCentral or WebEx in order to stay in touch with business as well as friends and relatives. With limited in-person meetings, the only way to continue learning and teaching is through the Internet. Some have embraced the “new normal” while others have not. A sales call is likely to be scheduled via a Zoom meeting rather than in person. Samples will be shipped out rather than dropped off. Set up your sales personnel with a good quality video camera, lighting source and audio; cut your learning curve by hiring a consultant to do some training and demand personnel practice until comfortable with the media being used.
I have been on the receiving end of more than one disastrous Zoom-type meeting, complete with incomprehensible audio, screeching in the background, a closeup view of nose hair and a low-light at the end of a tunnel. Until you’ve experienced such a debacle, you cannot imagine the frustration or, conversely, the pleasure in attending a well-done meeting.
Perhaps you have finally decided to invest the money to join one of the excellent flooring cooperatives. While most of my experience has been with CCA Global Partners/Carpet One and Starnet Worldwide, there are others that may appeal to you or offer a niche that is worthwhile. Do your research to find out whether there might be a good fit for you or if a spot is available in your geographic area. Becoming part of a co-op is like attending a banquet; there are rules to follow and you won’t be able to eat everything, but you’ll be able to “fill your plate” with offerings that you wouldn’t otherwise be able to afford or experience. You’ll benefit from superb products and services, aggressive pricing, great rebates and a feeling of camaraderie that comes from shared experience with other members in diverse geographic areas.
There were times when I picked up the phone and sought advice on a problem that would have been uncomfortable to make locally. I also got the satisfaction of helping out another member by doing a local install or a repair. You’ll make friendships that will last for years and have the potential to increase your business value substantially. Co-op membership is about a lot more than rebates or dividends.
Always ask for more than you expect to receive. Many a time, in the heat of the moment, extra work is done on a project site to accommodate another trade’s shortcomings. Part of that is getting along; however, when work is done beyond the scope of the job, one should be paid. That’s called getting a change order.
The project manager agreed that the 3,000 square feet of concrete was badly spalled, had numerous large holes throughout and needed to have the entire surface smoothed before installation of new flooring. We both agreed that the minimum fix would be skim-coating the entire area in lieu of a poured floor topping like Ardex, which wasn’t in the budget. I quoted a price and he promised to send over a change order. Based on that conversation, we did the work without having a signed change order. Although I had quoted a price, several days elapsed and multiple phone calls ensued with no change order. Finally, it arrived, but for less than half of what I had quoted. “I’ll take care of you on this” became “I’ll make it up to you on the next job.” While I covered most of the extra cost, I lost all of the profit by being too trusting. A great reminder for you is this: “The value of a service performed diminishes rapidly after that service is performed.”
When interviewing personnel, get excited and let your enthusiasm show. Plan your questions and listen to what is said and how it is expressed. People will always tell you what they think; you just have to listen. Aim for hiring the person you need, not just someone available with minimum qualifications. Always do a written application, a personnel screening test, a credit and background check, and ask for references. Most written requests for references are worthless; spend five minutes on a phone call and you’ll get what you need. An impression or a pregnant pause speaks volumes when discussing one’s talent, creativity or work ethic.
I interviewed a young lady for a new retail/designer sales position. She had two years of college in a design curriculum, but no practical experience. Clarice was poised, articulate, impressive and willing to start on a small salary and then work on a commission basis. After checking her application, aptitude tests and references, I wondered about her commitment. As the second interview concluded, I was cautious and she finally said, “I need someone to give me a chance; I will work hard and learn. You give me that chance, okay?” How could I say no? So, I hired Clarice and she became a star in our retail group. A big reason for her success was her dogged determination to be the best and work the extra hours for her clients. I’m sure glad I listened to her.
The defining factor with most applicants is not raw talent or even experience; rather, it is the willingness to do all those things you don’t have to do that determine where you’ll end up. Sometimes, winning means to avoid losing; losing a job, a position, money, or an opportunity.
Copyright 2020 Floor Focus