Profitable Sales

A Contractor's Guide

Michael C Stone

• Publisher: CONSTRUCTION PROGRAMS & RESULTS INC
• Year: 2007
• ISBN:
  9780979508318
• Edition: 1
• Topic: Betriebswirtschaft
• Subtopic: Vertrieb

Michael Stone's 30+ years of experience in residential remodeling sales and specialty sales is shared in his book, Profitable Sales, A Contractor's Guide. Focused on the construction industry, the information provided is valuable for both the business owner and their sales staff.

His experience working with home and building owners has provided him with valuable insights. He spells out how to:

• determine if a lead is worth your time before you set the appointment
• establish ground rules during the initial phone call
• address every customer's three fears
• successfully ask the four questions that need to be answered
• navigate through design agreements, letters of intent, and other documents
• lay the groundwork for a detailed contract
• help clients make selections
• turn a cancellation into a positive event
• find, train, motivate and compensate sales staff

A significant portion of the book is devoted to "What if?" scenarios. While a few scenarios are mildly humorous (arriving at a home to find homeowners inappropriately dressed) and some are more concerning (homeowners handling firearms on a sales call), a majority of the scenarios will happen to almost every salesperson in residential construction sales at least once in their career.

What if they:

• Ask you to fix something in their home during the appointment?
• Are distracted by the TV, by unruly kids, by neighbors who stop by?
• Want you to finish the job another contractor started?
• Ask you to look at another company's quotes, paperwork, or plans?
• Tell you they want to furnish their own materials?

Michael discusses insurance calls, dealing with other professionals (attorneys, architects and designers, realtors, engineers, lenders) and issues that can arise after the contract is signed.

In construction, if your sales depend on being the lowest price, your business won't have the funds it needs to survive. Michael's first book Markup & Profit: A Contractor's Guide Revisited helped thousands of contractors know how to properly price their jobs to cover their costs and make a reasonable profit. This book shows how to sell your value and service, not your price.

Sample forms are included, along with access to downloads allowing you to save many of these forms on your computer for easy use.

Profitable Sales,
A Contractor’s Guide

by Michael C. Stone

We Like to See the Good Guys Win

Acknowledgements

I want to give a special thanks to the many who have contributed so much to the construction industry and in particular to this book. They are listed in the back of this book. If I have forgotten anyone, please accept my apology and know that your effort is also greatly appreciated not only by myself, but all who will read this book.

My special thanks to my lady, my love, the mother of my daughters (Natalie and Nadine), my wife, Devon. I hope each of you have a helpmate in your life as good for you as Devon has been for me.

Mike H - Stay focused.

Michael’s 10 Cardinal Rules for Sales

1. You shall return all phone calls the same day or by 9 AM the next day.
2. You shall keep ALL appointments, and on time.
3. You shall always be prepared to make a sale.
4. You shall always qualify the customer to buy from you, not sell to them.
5. You shall not offer freebees, but get paid for all you do.
6. You shall keep an Objections book, up to date, regularly reviewed.
7. You shall continue your education, reading at least one hour each day.
8. You shall get written quotes or estimates on all items exceeding $300 on your estimates.
9. You shall not do Cost Plus or Time and Material Contracts unless for service work.
10. You shall set weekly, monthly and yearly sales and income goals.

Introduction

Most people who own and operate a construction business are excellent mechanics. After they start their own business, they still think like a mechanic.

They live under the delusion that being technically “good” at framing, wiring, plumbing, dry walling, remodeling, new home construction or any trade is the key to being a successful construction business owner.

Unfortunately, that is not enough. Yes, to succeed you must be good at your trade, but you must be equally as good or better at business skills or you won’t be in business for long. The odds of success in the construction industry are stacked against you. According to small business statistics, thirty percent of all new construction related businesses fail within the first year. Fifty seven percent are gone by the end of the second year and three out of four have failed by the end of the third year. After ten years, ninety to ninety six percent have failed. An overriding reason for this extreme failure rate is ignorance about selling jobs at a profit, the subject of my first book, Markup and Profit: A Contractors Guide.

A second major reason for business failure is the inability to generate profitable sales in good times and bad times. That is the subject of this book.

Purchasing this book indicates you are in the top 10% of contractors – or that you are on your way to joining that elite company. Anyone wise enough to buy a self-improvement book has learned the practical value of improving his or her professional skills and knowledge. Wisdom is knowing that what we don’t know gets us into trouble. Knowledge is doing something to correct this deficiency.

The prospective owner of a new construction company has mastered one or more trades before starting a new business. Just as it took time to learn your trade you must be willing to become a student of business. Learning sales and other critical business skills requires effort, perseverance, dedication and time.

This book will help you become more successful at selling. We will accomplish that by laying a sales foundation. We are going to talk about sales from A to Z. We are going to talk about what to say to your customers and when. We will review what you should or should not do, and can or cannot do. We will cover the when, why and how of improving your sales. We will help you find and use the motivation you need to put what you learn into practice. Ultimately, the information and suggestions in this book will help you get contracts faster, easier and with far less chance of problems.

The things that I share with you in this book come from many miles in this business. I wired my first house in 1957 and sold my first remodeling job in 1969. I have been teaching business management, estimating and sales since 1980. I now work full time as a business coach, consultant and educator.

The advice in this book also comes from a variety of people including successful contractors, coaches, consultants, authors and others I know and respect as solid business owners. These veterans understand sales and as a result consistently earn six-figure incomes – and that is above and beyond earning eight percent or more net profit for their company.

If you read and put into practice the advice and ideas in this book you will be able to write e-mails such as the following sent to us recently by Josh Neiderberger, a Seattle, Washington, remodeling contractor who also is one of our coaching clients:

Michael:

This week we signed a contract for over $250,000 for an addition on a home. My estimate is right, my contract and other documents are in order and we are going into this job knowing we are going to make good money on it. I’m a perfectionist and it shows in my construction projects. Earlier this year, these customers saw a project that I was doing and asked if I would look at theirs. What I got from you is the confidence that my job costs, overhead and profit numbers are in order, and that I could negotiate a price without wondering if I might be giving away the store. I have always felt like I am a very competent craftsman, but I have often wondered if my prices were right and have questioned what my rights and duties as a contractor were. Getting rid of that burden and baggage frees me up to pursue the prize.

While this book has been written primarily for residential remodeling and specialty contractors and for new homebuilders who market their own homes, its principles can be applied to any business. An uncle of mine who retired wealthy after a career in sales used to tell me that if you know the basics of sales, you could sell anything to anybody. His favorite saying in relation to competitors was, “I could sell shirts at Penney’s and make more than them guys!”

You will only know if the advice in this book works if you try it. You have to try it. You must be willing to make the effort. Will your results be immediate? Probably not. Take this new approach one day at a time. Remember the old proverb: How do you eat an elephant? One bite at a time. The same is true in sales. You learn something new and give it a try. The next day you learn something else and try that. Over time you gain a critical mass of new ideas, and the combination of new stuff begins to pay off. You start hearing “Yes” from more customers, fewer excuses and stalls for time, fewer rejections. But for this to happen, you and you alone have to be willing to make the effort. Make a commitment to be the best you can be in sales – the most honorable and oldest of all professions. When you look at your tax return at the end of the year, you will know the effort is paying off.

Table of Contents

Chapter 1, Attitude as Your Sales Foundation

Chapter 2, Old Ghosts and New Concepts

Chapter 3, The Salesperson

Chapter 4, The All-Important Sales Lead

Chapter 5, The Sales Call

Chapter 6, Your Customer’s Three Fears

Chapter 7, The Four Basic Questions

Chapter 8, Objections

Chapter 9, Design Agreement and Letter of Intent

Chapter 10, Callbacks and Rehashes

Chapter 11, Estimating

Chapter 12, Contracts

Chapter 13, Missing the Sale And Cancellations

Chapter 14, Employing A Salesperson

Chapter 15, Make Every Possession Count

Chapter 16, Sales “Opportunities”

Conclusion

Appendix 1, Sales Opportunities

Appendix II, Sales Opportunities

Appendix III, Sales Opportunities

Appendix IV, Contributors

About The Author

CHAPTER 1, Attitude as Your Sales Foundation

The problem with many sales books is that they do not work. If they did, everyone who read them would be making a ton of money. The sad fact is that no sales techniques will work without a firm foundation – you and your attitude.

Overcoming the tremendous odds stacked against you involves sacrifice, disappointment and heartache. But trust me, despite all the difficulties you can be successful. The difference between those earning excellent money in construction year-after-year, and those who just “make a living” – or fail to – is not a matter of luck, good looks or heredity. The difference is having the necessary dedication and determination to win.

Imagine for a moment that you are hiking with your family along the Oregon coast. You go to the little town of Tillamook and then south to Cape Lookout. It is a 2.4-mile hike through a rain forest to the westernmost point of the cape, jutting into the Pacific, and you are rewarded with spectacular views.

But the hike is rugged terrain with steep banks and cliffs dropping several hundred feet to the rocks and ocean below. As you hike, one of your children slips and begins to slide down one of these banks, but manages to catch hold of a tree root on the face of the bank. Instantly you know there is no time to go for help. To rescue your child you must climb down.

Can you picture this scene in your mind? Can you imagine the courage it will take to go over that slippery, moss-covered bank to rescue your child? One slip and your children will have one less parent.

Would you do it? Most parents would. Now, will you take the same risk for your business?

Succeeding in business means taking this kind of risk. Many do not realize that when they start a business. They discover they lack the necessary dedication somewhere along the way, and I believe that is one of the main reasons why construction has such an alarming rate of business failure.

When you hang out your shingle, you instantly become your company’s lead sales person. Even if you delegate sales responsibilities, you are the top sales manager. It doesn’t matter if you like sales or not. If you are in business, you are in sales. Being successful in business requires becoming successful in sales. With a desire to win, most people can become good at sales. But if the desire to win is not in you, your business will go away. This is a simple fact-of-life.

So, let’s agree that how much and how fast you improve your sales ability depends upon your own dedication to putting what you learn into practice. The more disciplined you are about learning new things and putting old, bad habits aside, the better at sales you will become. As popular sales consultant Zig Ziglar says: “Sales is the highest paying hard work, and the lowest paying easy work there is.” Ziglar advises that if you are in sales, then get “in” it. And if you are not “in” sales, then get out.

My own experience as a business coach and consultant has taught me to appreciate how easy it can be to find a reason to believe something won’t work and not bother to give it a try. “That’s not for me,” some conclude. Others say, “I could never use that in this town.” Keep an open mind and study as you go. Don’t be afraid to try something new. The absolute worst that can happen is that you remain where you are. Numerous contractors can testify that the advice I’ve given has improved their business, often dramatically. One truth I share in all my training seminars is, “If you continue to do what you have always done, you will continue to get what you have always gotten.” Any of us can fall into a sales rut and stay there. But success always involves getting off your duff, going where the customers are and getting to work. Penciled on the steering wheel of my pickup is G.O.Y.A. – a reminder to “Get Off Your Assets” and go sell something.

EDUCATION

As I said earlier, if you own a construction company you are in sales whether you like it or not. That being the case, what can you do to become the best salesperson you can be?

In almost every case, the better the salesperson’s education, the better they do in the long-term. I don’t believe you need a college degree to succeed in sales, but it certainly helps. If contractors were required to have more formal education before they could start a business, the rate of business failure would drop significantly.

The reality is that it takes little to start a construction company in most states. The solution, and the common thread among all successful contractors I know, is a personal commitment to education. It doesn’t have to be formal, sitting in college classrooms - but it does have to be sincere. Do you already have a college degree? Your education isn’t finished, because education is an ongoing process. Your education must cover the basics if you are ever going to rise above being “just another contractor.” Focus on business and sales-related subjects.

READ

If you are “in” sales, it is critical to study, and that means reading. There is no other way to make it to the top. I have never met a successful salesperson that doesn’t read at least an hour each day.

Recent studies have shown that reading keeps the mind sharp and working properly. I believe that top salespeople are constantly reading sales books. It has been my practice to read 35 to 40 books a year and countless magazine articles, newsletters and information off the Internet. I average no less than one hour of reading every day and many days it will push three or four hours. I still take occasional sales calls for or with other contractors, so I must stay current on sales approaches and issues that come up.

You should read every book, article, newsletter, blog and forum you can find about sales. If you invest four hours to read a book just to gain one new idea, but that idea helps you sell a new job, your time was well invested and you have gained an important advantage over competitors.

What to read? Start with basic selling books. An excellent book is How I Raised Myself from Failure to Success in Selling, by Frank Bettger, old but still good. Another book I highly recommend is How To Master The Art of Selling by Tom Hopkins.

Whatever books you select, I urge you to spend the most time with authors who have “been there and done it.” You can tell very...