We recently wrote an article featured in the Oct / Nov Issue of Pavement Maintenance & Construction. Check out the full article below!
It's no secret
the economy is tough. The stories are
predominantly the same regardless of where you live. Your customers ask
you to do more for less, just as the government is trying to take more of what
you earn. Some of the largest property
management companies have declared bankruptcy, prompting many contractors to
wonder if they will ever see the money owed to them. You may be facing the prospects of slimming
down your work force and breaking the news to employees that depend on you for
a living. Things look bleak all
over.
But there can be a silver lining around this dark cloud of doom. We believe that the answers are not found in burying your head in the sand and waiting for things to work themselves out. Borrow the title from Rick Page's book, "Hope is Not a Strategy" and take this opportunity and time to be proactive in all aspects of your business. We want to touch on a few strategies that are crucial to maintaining and successfully growing your business in tough times.
But there can be a silver lining around this dark cloud of doom. We believe that the answers are not found in burying your head in the sand and waiting for things to work themselves out. Borrow the title from Rick Page's book, "Hope is Not a Strategy" and take this opportunity and time to be proactive in all aspects of your business. We want to touch on a few strategies that are crucial to maintaining and successfully growing your business in tough times.
Budgeting
A frequently
asked question we get at Nite-Hawk Sweepers is, "How do we compete in this
tough economy against low bidders?" And to tell you the truth, the answer isn't
easy and sometimes there's not a lot you can do. When your competition is willing to sweep for
what you made 20 years ago in high school working at local fast food joint, it
can be brutal. It's tough not to be
perturbed when you are spending 100 hours a week and every cent you have building
your business, only to see someone who doesn't know their costs underbid and
destroy the market. You can't stop the
tide, but you can mitigate the impact on your business.
Know your costs and limits. You must understand your costs fully to
compete in a tough market. Know your
variable costs, your fixed costs, and what type of economies of scale you can
achieve by expanding your market. You
can't afford to guess when every dollar counts. Know your margins, set parameters that are
comfortable, and stick to them. You may
find that knowing all of your costs gives you more flexibility in the pricing
of the bids you are placing.
Remember that profitability does not
necessarily correlate with the amount of money a customer gives to your
business. In many cases, smaller
accounts can be highly profitable, while large accounts can cost your company a
lot to administer, thereby leaving you with a smaller profit margin. Run scenarios with your budget and margins to
maximize your bottom line. Optimize what you have and concentrate on
profitability, not overall revenue.
Marketing
When companies
are looking to save money, one of the first cuts is often marketing. What people can’t see, or don’t see is that
marketing is an investment in future sales and market share. Remember that new economic conditions, good
or bad, create new opportunities. Look
at your market and evaluate what is the best way for your potential customers
to find you. Yellow pages, websites,
brochures, ads, flyers, social networking...the list goes on and on.
It is important to remember the marketing
you are already doing. The shirts your
employees wear, the appearance of your office or shop, the condition of the sweeper
trucks you operate, and the quality of your service are all forms of
marketing. They create an impression in
the minds of current and potential customers.
If you aren’t creating this impression proactively, then it will occur
by default – and you may not like the results.
Create a marketing plan that is simple,
clear, concise, and well thought out.
Your plan should be a document that guides you through your marketing
program. It should focus on the objective of your marketing and how you intend
to accomplish that objective. Whatever medium you decide to use, it's important
to have a focused strategy to accomplish your goals. Write down a simple
plan, stick to it, review it, and never stop marketing!
Communication
We can’t
emphasize this enough. As frequently as
possible and practical, make contact with your customers. When interacting and building relationships,
strive to understand their business and find ways that you can help them. Property managers are under the same
pressures you are to cut costs and save money. Set yourself apart as a service provider. Remind them that opting for the lowest priced
contractor may be a short term solution with long term consequences. Educate your customers about the sweeping
industry. Does your competition carry
the right insurance? Are they really
doing the same quality job you're doing, or are they cutting corners? Are they using the proper equipment? Many property managers, if properly educated,
will pay a few bucks more to have the job done right.
While keeping in touch with your many
customers, make sure you are doing it the “right” way. It's important to decipher how your customers
communicate and tailor your approach, without losing the advantages of making
it personal. One extreme is the tech-savvy
entrepreneur that emails and sends text messages, but never makes a phone call
- probably a model of efficiency, but losing that personal touch that separated
him early on from the competition. Have
anything important to say? Don't email
it. Face to face contact is the best way to communicate, followed by a phone
call. Personal contact allows you to
read the customer’s reaction and handle any concerns they have
immediately. Use email for follow-up and
confirmation, not conversation.
In the tough
economy of today, it is not enough to simply react – you must be
proactive. Gain knowledge and experience
through networking. Know your business, know your competition, and be
creative. Now is the time you should focus your efforts on all those
things you know you should have been doing, but felt you were too busy get
done. Ask questions and don't be afraid
to innovate. These principles, if effectively implemented and followed, will set
you apart as an exceptional sweeping company.
Tracy Day
President,
Nite-Hawk Sweepers
Jake Hoerman
Sales
and Marketing, Nite-Hawk Sweepers
