Last week we celebrated entrepreneur day, but you were probably busy working. I’ve noticed there are a lot of guys and girls out there who are starting their own gigs, and that is exciting as hell!
The ability to go out on your own and stake a claim in the world is pretty cool.
- Getting your name on your first business card is awesome.
- Getting your first truck or van lettered just feels amazing!
Reaching those milestones comes with sacrifice and planning. I’m going to give you the two best bits of advice someone who has come before you can give;
- Always, always, always pay attention to your cash flow. There are so many things that can come along and drain your bank account; a new truck, new hires, and the worst, new tools. God, the stories I can tell you of companies with a garage or warehouse full of brand new tools that were never used is amazing.
- Always, always, always (you seeing a theme?) pay attention to the leads coming in the door. Both of these action items deserve more attention than a few numbered bullets in a list, so let me dig in a bit.
Nothing kills a company faster (not even a lack of leads) than poor cash flow. As a new business, you need to adopt the philosophy of my man Ben Franklin; “Watch the pennies and the dollars will watch themselves.”
That means you have to pay attention to everything you are spending. In your early days, all of your expenses need to be directly tied to how they are going to bring new business. For every $1 you spend, it needs to come back home dressed up like a five dollar bill.
BUT…and pay attention to this one
Spare no expense on things that touch the customer:
- Your business cards need to be fantastic.
- The paper you print your estimates on needs to be thick and sturdy.
- Your vehicle needs to be clean and washed regularly.
- If you’ve been out on the job site, get home and shower and change if you can before you go out on estimates.
- DON’T get magnetic signs for your vehicles. Nothing screams Noob like magnetic signs. Spend the extra money and get your truck lettered, or even better, wrapped. I promise it will pay for itself and then some EVERY MONTH.
This one, this one could go on for a very long time, so I will try to stick to some higher level points. Here’s one; if you are just starting out, get out of the forums asking guys who have been in business 5, 10, 20, 30 or more years how to start a business today.
Not one of them knows anything about starting a business TODAY!!
Most of them started their businesses when all they had to do was put a double-truck ad in the Yellow Pages and the public beat a path to their door.
They had to be dragged kicking and screaming into the digital era of Craigslist, then websites, and then social media. Know how I know? Because I had to drag them there!
Another favorite saw from the old-timers; referrals. They’ll all tell you how great their businesses are doing just on referrals. Couple problems with that;
- A. You are brand new, so no referrals.
- B. Know what the first reason most contractors tell me when I ask why they called me to help market their businesses? Yep, you guessed it, their referrals dried up.
You see, I’ve never met a contractor ever, who could sustain a business over the long-term just on referrals from customers. Referrals are the result of your good work, and you are worth every one you get, but you just can not build a business around JUST referrals.
When you are brand new, you need leads coming in the door NOW! There is nothing wrong with using a lead service to get your first few projects. That will give you the budget to get your website done, your marketing in place and a budget to help you make it to the next season.
Once you have work scheduled, you can start building a construction marketing plan, but bringing on Home Advisor in the beginning won’t kill you.
Now, a lot of old timers are going to poo-poo sites like Home Advisor, again, they started their businesses when business cards were chiseled out of stone, so sites like Home Advisor didn’t exist. And sure they all tried them, but try for yourself. I know a contractor in the middle of Manhattan who spends $50 a month, yes, that’s not a typo, fifty bucks a month, and makes $800,000 a year from them. Obviously, your mileage may vary, but that’s pretty good.
And finally, referrals
Since we talked about referrals, I’m going to tell you the best time you can ask for referrals. As soon as you hand the project over to the homeowners and they are happy as hell with the results, that’s when you ask.
There is a term behind it.
It’s called pride of ownership, and if you did a good job, they should be in love with your work at this point, so that’s when you ask. Sure, you did the work, but they picked the paint colors, the floor tiles and the backsplash, but you did the work, and every time someone comes over and sees “their” project, they are going to ask who did it, and you want your name in that conversation every time.
So offer the Jones’ a nice incentive for their warm lead, a dinner, a touch-up, a freezer full of steaks, I don’t care what you give them, but have the conversation when you are doing the final walkthrough.
Not sure how to do it? Here’s a sample transition for you to ask for referrals.
“Well Mr. and Mrs. Jones, I’m happy you are happy with the project, it really has turned out well. Your choice for (fill in the blanks) really makes the space look great! I hope, if it is ok with you, as you show off your new area that you would recommend us to anyone who may be looking for something done on their home…and we promise it won’t look like yours! For your help, we will be happy to give you (fill in the blank).”
Say something along those lines, with conviction, I promise you that within 2 weeks someone will be calling you!
That’s it…good luck with your new business. When you are ready for a website, social media management or advertising, let me know. See what I did there?