By the time you read this, the summer will be nearly gone. One popular midsummer night’s dream was to have sufficient work for fall and winter. I hope it turned out that way.
But if it didn’t, we’d better get busy — busy marketing, busy selling, and busy setting up jobs to produce profitably. Marketing means finding the right clients for your company; selling requires persuading them to work with you now. And because each job is so valuable, we have to ensure its profitability.
Of the three, marketing is the most difficult for most people, more so today because much of what worked in the past — postcards and newsletters, open houses, and gift baskets — doesn’t seem to be working as well in the “new economy.”
What is working, people say, are “marketing events,” which use personal contact to remind past and potential clients of your ability to solve problems with their homes.
The point, however, is that you need to start furiously marketing and tracking your results. (For marketing ideas, re-read the May 2009 Big50 “Market Wise” winner entries, and for help with tracking, refer to the February 2009 Benchmark about short-pass marketing.)
Keep track of how many of the leads you generate become sales, then track how well those jobs perform in terms of producing the gross profit dollars you need.
The worksheet above summarizes monthly marketing, sales, and profit activity. ( Download the complete Excel workbook .)
This is vital information to have, especially now. It tells you how many jobs you need to sell to meet the required gross profit, and it calculates the number of leads you need to generate and the number of bids you need to make to sell those jobs.
If you can’t reasonably sell another 21 jobs, as are needed in this example, something must give. Can you work more efficiently and raise your gross profit margin just a little while keeping your prices steady? Can you convert more bids into signed contracts? Or can you increase your job size?
Also track how the number and kind of marketing events generate an increase in leads and sales. Like water, the money runs downhill from marketing events to sales to gross profit. Track the flow, measure the effectiveness, and make changes wherever necessary.
—Judith Miller is a Seattle-based remodeling business consultant and trainer specializing in accounting, finance, and computerization. Visit her blogs at REMODELING online and at remodelservices.wordpress.com.