20 Questions to Ask When You’re Struggling
Are you struggling? Many contractors are struggling, but not all of them. So why you? Here are 20 questions to ask yourself if you find yourself struggling.
1. Am I pricing right? Most contractors undercharge. We’ve had a lot of general inflation and structural industry price changes from government mandates. Has your pricing kept up?
2. Should I offer performance pay? Performance pay is a game changer from high performers and the well-organized. Start with installers and move to service. There are lots of resources to help.
3. Am I a victim of fraud? It’s more prevalent than you think because most contractors don’t like to talk about it. Take common sense measures to make fraud harder execute and easier to detect.
4. Are my employees moonlighting? Follow up on no revenue service calls from time to time to ensure your employees aren’t returning on the weekend to do work at a discount.
5. Am I carrying my customers? Do you finance any customers or offer extended payment terms? This is especially prominent with commercial and construction work. You aren’t a bank. Walk away from this type of business as fast as you can.
6. Do I have low margin business I should exit? Typically, this is residential new construction. It can be profitable at scale. Few companies manage this. If you’re not one of them, walk away.
7. Can I boost average tickets? Slowing down and running fewer calls per tech can perversely raise revenue and profit. It gives techs time to be more thorough, to talk with customers, and to offer accessories.
8. Am I cash focused? Companies close when they run out of cash. Hoard yours. Watch it. Conserve it. Sweep the excess and put it in low risk interest bearing accounts.
9. Do I know my numbers? As a business owner, it is essential that you know your way around an income statement, balance sheet, cash flow statement, ratios, and key performance indicators.
10. Am I giving customers options? Lots of homeowners are struggling too. Some might opt for a system rebuild over a replacement. Some will want the budget offering. Some will want top-of-the-line. Some will want all accessories. Give people choices.
11. Are my trucks wrapped? Hire a good graphic designer and wrap your trucks. This is the biggest bang for the marketing dollar you can get. Each truck gets over 30 thousand exposures a day.
12. Does my marketing work? Are you even marketing? Constantly test, tweak, and adjust your marketing. Never stop marketing. When it gets harder to find a customer, put forth more effort, not less.
13. Am I marketing to existing customers? Do you send them consumer newsletters? Can you email them? Text them? They are your best source of more business.
14. Are we following up? Do you continue to follow up on every sales proposal until either the sale is made or the prospect tells you to stop? Do you send end-of-season “second chance” letters to customers who opt to repair instead of replace?
15. Am I training frequently enough? Training is like bathing. It wears off, so repeat it frequently, even daily. Training is an investment, not a cost.
16. Am I in a buying group? Most best practices groups have a buying group. Buy from the preferred partners and you can save tens of thousands of dollars.
17. Am I getting information from reliable sources? Facebook groups, the Internet’s self-proclaimed experts, and sketchy business coaches can sink a company. There are lots of good coaches and good groups to explore.
18. Does my software match my needs? There are more software options for contractors than ever. Have you outgrown your? Conversely, are you paying too much for software that’s overkill for your business today?
19. Am I attending conferences and meetings? Industry conferences, association meetings, and supplier dealer meetings are where you will learn about new innovations in service and, more importantly, where you will run into other contractors who have overcome the problems you are facing. Most contractors love to share business ideas and talk shop with other contractors.
20. Are there people I should cut? This is a hard question, but must be asked. Are there people in the office you need to cut? Are there poor performing techs?
Looking for a best practices group and buying group? Check out the Service Nation Alliance. For inspiration, buy Matt Michel’s book, “Contractor Stories” from Amazon.