Empower your construction business with closing tools sales for Construction Industry

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hi i'm tom stevenson and welcome to construction business management in this course we are looking at how to plan and run a successful construction business in this next series of videos we're going to be looking at the sales process and the closing process and how to grow your business from the marketing side of things it includes a lot of things that you need to know and that you may not be doing and if you are wanting to run a successful business there's actually a lot of knowledge and practice and skills that are behind that so we'll dive into that and we're going to be looking at today how to develop a credible process for finding qualifying and retaining clients we want to identify and apply the key components of the sales process to your repertoire of skills a lot of construction people they come from this from the tools or they come from a particular discipline of knowledge be that project management or construction management but they often don't think of all the skills required to actually sell and close on a bid and to make sure that they're able to actually secure their share of work you spend a lot of time and effort coming up with a costing for a project and if you can just shift that sort of needle another 20 percent in your favor that you're getting more of the projects that you bid on uh through successful sales and negotiation skills that'll put you in a much better position financially and from a profitability point of view i'm going to re-go over this and i brought this up in probably about the last two or three videos and by the way if you click the subscribe button and you look under the playlist construction business management you'll see the rest of the videos in this series for the whole course uh starting right from the beginning where we talked about goals and missions and values to where we went through the financial statements to this point where we're actually looking at the marketing and sales aspects of a construction business and there's these four key points that really quite frankly any business needs to think about you know increase your client base for example if you currently have 100 how do you increase it to 150 clients whatever number it is if you have 10 clients how do you increase it to 20 clients that will for sure increase your sales and if you if you've outlined the markup covering your overhead and your profit then you will be doing much better as a business so it's it's the coming together of a bunch of spokes on the wheel so to speak uh raise your prices well a lot of times we undervalue what we are selling we don't really recognize the value that others see and what we sell and so we may be selling ourselves short essentially we may be getting a lot of work but not making much money off of it and do we really want to be the low-cost producer in our market segment somebody has to be the low market low priced producer but maybe that's not us maybe that's not our particular market segment that we're going after of course if we can have more frequency in the transactions that's going to allow us to be more successful too so if we've got the same client buying from us more frequently that's a big plus that means that we could keep the same 100 clients but now they're buying from us twice as often we've essentially doubled our sales and if we've got the right profit margin we doubled our profit margin increase the average size of each transaction well that ties into a lot of this what we'll be talking about as well you know what are the options are you providing your client with the right uh number of options that really sort of meets their needs and requirements they call it upselling a lot of time where you can increase what you're selling but also what you're trying to do is add real value to your client but to add real value you really have to understand your clients as we've talked about in some of the previous videos and if we got that good knowledge base and we're able to provide packages that really are attractive to that client then we have a much higher likelihood of selling to them and that can be a very very strong possibility one contractor could come in they got this one option is too much and basically the clients like put off by it you could come in with the same package that's too much but also have other packages that might be lesser or might be more encompassing of something else that they want to do in the future and they might once they start want to expand what they're doing and just get it over with that happens a lot in construction as well so the sales the end result of this aspect of successful marketing that we've been talking about is actually the sale and it's a profession unto itself but you know what everybody is selling all the time you sell uh basically which restaurant do you want to go eat at you sell which car do you want to buy as a family there's always the sales that goes on and the other aspect is negotiation i'll have another video where we'll dive into sales and negotiation because there's a lot of sort of techniques out there anything that's a profession unto itself there's people that are really good at it and there's people that are not good at it and as a business owner you want to become very good at the sales process a lot of people don't like it a lot of people don't like being having rejection but there's a definite winning formula that will get you more success by really studying it and practicing it's one of those things you really have to practice practice makes perfect and long-term success is also understanding that long-term success is about that relationship that you build and have with your clients so sales is an important fundamental aspect so when we think about the traditional sales approach we can break it down into five areas you know there's a there's a number of ways that we can look at the space between the spaces so to speak but there really are five um different areas uh on the sales approach there's the marketing approach well how do i get the lead in the first place and we've talked about that you know the different ways that you can advertise and get a lead to contact you but that's great um but how do we show our prospects how professional we are and how basically we are somebody that they want to do business with the construction industry you know it writes it ranks right up there with car mechanics that people are very skeptical very cautious and rightfully so i can't think of anything more than you would be spending more money on than construction work really when it comes down to it right so if it's a business to business relationship it's still going to be a lot of money if it's a business to cons customer relationship it's still going to be a lot of money so people are on guard and concerned so the first thing you really want to try to do is come across professionally so the approach is very important warm up your goal is to warm up is to get the potential client to like you and to trust you so between up showing your professionalism and building a trust and a relationship there with the client is very important and it's important that you're genuine about this you know if you're if you're about this it's not going to do what you want it to do especially in construction where we want to retain 80 percent of the clients we do get for future work we want them to think about us as their long-term contractor and so that's that's something that you really cause people are really concerned so if you belay those concerns and you execute on what you say then you are building a long-term relationship which is building your business for the long game not just the short game qualifying oh we'll talk about this too qualifying you don't want to work for everybody necessary they're qualifying you right and you should qualify them in construction a lot of contractors quite frankly are very busy so actually getting enough clients often isn't the issue it's getting the right clients because if you get the wrong clients yeah i got a ton of clients but i'm losing money on every two out of ten jobs that i do and those two that i lose money on take most of the profit from the other eight that i actually made money on so trying to qualify the clients is important and we'll be diving into that in the upcoming lectures presentation well you want to be professional and that people have a lot of difficulty talking to other people and doing a presentation and explaining the breakdowns and they can get jumbled up we're not talking about presenting to a hundred people or something we're talking about presenting to clients but that can be very uh unnerving for somebody that let's say has a construction background as used to working on project sites but not used to professionally presenting a proposal to a client so really you real you want to develop skills in that area and i always think of winston churchill who was known as one of the best speakers of the 20th century and how in 1908 when he had to present uh in parliament and he was a young basically a young parliamentarian in england and he had to present and he forgot his words and he got all muddled up and he went and sat down because he couldn't get his head together and in the papers the next day it said this young winston churchill he's mentally inept not suitable for an elected position winston churchill and winston churchill vowed after that that he would get better at doing presentations he worked it for decades he worked it so that by the time 1939 rolled around in world war ii he was the right person at the right time in the right job so you anybody can improve whatever level you're starting at in their presentation skills including myself i'm always trying to figure out how can i do things a little bit better and i think it's helped me over the years for sure con considering where i started i started by reading out of a book to a classroom you definitely get much better as you go if you put the time and effort into trying to improve on that but we will discuss that as well the close well they call it the close the goal of the close is to leave uh with the contract uh you know already signed or follow up and close the contract well this kind of depends what you're doing if you're in construction and you're dealing with other businesses you're likely not going to close by delivering a price they may be taking bids in it may be a closed bid process and then basically um they'll select the bid based on the lowest price if it's a government agency they'll have a public tender opening will they'll actually open up the bids they'll uh call out the the actual pricing and you would have had to been pre-qualified yourself to bid on that and you might have been it might have been secured with an actual bid bond uh in that case it will definitely go to the lowest bidder as long as everything is in place and it fits the budget of the government agency and probably take a few weeks or even some cases a couple of months before they actually come out and award you the contract so those are those are some differences there but essentially though if you're in the residential sector you would definitely want to try to have everything ready that if the client seems obliging to go ahead with it that you have a contract then they quickly sign it and then you're ready to go because if you leave it then people will have times well maybe we should get another price or maybe we should uh rethink this uh part of it but once they actually sign up then they're typically a client that way i don't mean to be in construction you don't want to be pushy you don't want to seem desperate you just want to seem prepared with that and there's an old saying in negotiation if you don't ask you don't get and so one of the things with the close is that you're ready there and you can also say we can put you into our schedule and we could start in two weeks or three weeks or a month whatever the time frame is but you're giving them a date from when you think you can start if they sign up today which would be a fair assumption because you should know how your projects are coming up and how you're scheduling things and you can lock them in otherwise you can't really lock them in if you don't know you have a project uh so that's uh the aspect of the clothes a lot of unskilled contractors don't make the ask and so they've lost that opportunity and that could cost them a good 25 of their jobs that they could have potentially had or even more follow-up is also important and we'll get into that as well but basically we want to make sure that the follow-up occurs when you're not able to close when you did your presentation and you want to see if you can make the close right so you're following up maybe you didn't make your clothes you want to do some follow-up and if you're not receiving uh the contract you also want to valuable feedback so you can make improvements in the future i always would do that with clients and when you present uh your quote to the client the other thing is that you want to you want to be very professional and i find i actually had a little bit of a business going just on how well i took it when a client would tell me that we didn't get the project i would be super nice i'd be over the top nice oh that's fine that's okay i fully understand that if you have any problems at all or if you have any other work in the future i'd be more than happy to quote this for you i really enjoyed working with you up to this point to get the quote and i think it would be uh great for us to do business in the future i've had clients literally if it was done on the phone where it's always better on person but where they've uh hung up the phone and uh they've called me back in a half an hour to say you know what we've been thinking about this really um deeply we'd actually like to go uh with uh the contract with you we just didn't have the same feeling with the other contractor right so it can make a huge huge difference actually my uh favorite client that i worked for um decades ago was uh he owned ray gordon equipment company this was this large construction equipment company they sold they they had a dominant position in ontario canada and then they sold it to united rentals but we just kind of clicked and helped him working with the architect who was designing the project from a budgeting point of view in the early processes and this was actually a connection we got through our plumbing contractor where we this plumbing contractor would also act as a general contractor sometimes so they'd have a client just trying to show you how the different businesses go together business to business business to customer and how they integrate like we talked about in a previous video so this plumbing contractor basically uh did their bathroom did this master bathroom and we did all the carpentry work for that so we were their subcontractor you know usually we were always the gc but because we kind of always did work with this same plumbing subcontractor we kind of went both ways with things we'd be their subcontractor they'd be our subcontractor it just depended right and which is a great relationship business to business relationship and so they did they were interested in in like bathrooms and anything to do with plumbing they weren't interested in doing like a half a million dollar addition onto the house and a whole bunch of other work right and so this client uh contacted us based through the plumber because they had asked the plumber if they knew a good general contractor and the plumber said us and that we had already worked on their house and so they wanted me to actually help uh sort of work with the architect to have a budget but first they actually wanted the architect and i referred the architect to them so you can see how all this is working together the referral process because i had worked with this architect on a previous project and so they actually started the design and we were doing the budgets and it came time for the pricing of course the architect got a few other contractors to bid on it because they want to make sure that they weren't paying too much and we were a little bit more expensive uh than the lowest uh price contractor it wasn't a like on a 500 000 job i think we were like four or five thousand dollars so in the big scheme of things not not a ton of money uh but you do know how financial statements work and how profit and overhead works as we've talked about in the previous videos uh so uh we were a little bit high but the big the big point was we couldn't start for i think it was five weeks we were very busy all the time we were very busy and so we said five weeks this other contractor could start like you know in three days well that would be one question i'd wonder how during busy times they could start in three days but anyways and so that i got the phone call uh after we had submitted the bids because it had to be put in by a certain time done through an architect's office exact exact bid process and he said i'm very sorry you know we're gonna go with the other contractor you know your pricing is pretty online but we just want to get it started etc and i said oh sorry about that uh you know i'm always straight up with my clients if we can't start right away i say that you know we could always do a start but i don't like to mislead my clients and this is how how we typically do things i've enjoyed so much working with you and i think in future we'll have great opportunities together please keep us in mind so that's the example i was saying after about 20 minutes phone back you know what we want you to do the job not only did we get that job but we've got we got several million dollars worth of work after that as well i often think about that because i was to be honest i was not happy because i spent a lot of time on the budgeting process and honestly there was kind of a little thing that went on between us and the architect too i felt like the architect was pushing the other contractor that they had referred so there was all this kind of background stuff but to the client you want to be professional and i i'm sincere i really like that client i really probably the best client i ever ended up working with we just gelled and everything made so much sense it was a lot of enjoyment and so i think i learned a lot from that you definitely don't want to burn bridges and you want to be as professional as possible and you move on if they don't call you again that's fine but i can tell you i had a lot of people call me back when i lost projects because they'd start the project and maybe then with this other contractor it went south and a lot of construction projects do go south especially if somebody really underpriced you and they end up calling you back and usually at that point i would go in as a cost plus contract so we would fix things based on cost plus because you never know what somebody started something else what you're getting into but it worked out for a few years to be an excellent excellent uh business model and it really brought in a lot of revenue so you really gotta kind of look at these six elements approach warm-up qualifying presentation close follow-up and work them and when you don't get a project ask yourself why didn't you get the project and what could you improve upon and work that because some of you might be golden on approach and warm up but not so good on qualifying others might be horrible on approach you know and it just goes a number of different ways i want to dive into this in a little bit more detail and i want to do a separate video where we kind of just get into each of the areas and the area is kind of i took from this actually years ago i took this from this old canada mortgage and housing corporation document that they had which was really how to close sales and build client relations for a construction-based business i've kind of updated things for the purposes of today that it makes much more sense and the other area that i also want to dive into a little bit is negotiating the contract and negotiate just negotiation skills in general so i'm going to do a a quick short video on just the negotiating side of things because there's a lot of little there's so much there there's just there's just so much there that depending on you how you have been in the past your culture your upbringing uh your personality uh there's a lot of factors that go in and then who you're dealing with as far as being able to successfully negotiate a contract that you're okay with that you're satisfied with because very often the other problem we have with running a construction business very often we win the contract and then we have buyers remorse like how are we going to do this now or why did we agree to this after the fact and then we end up losing money on it and it as a as a small to medium-sized business you don't want to have very many of those types of projects you want to try you're never going to get rid of all of them but you definitely want to be conscious of them and you want to grow the ones that are super profitable and you want to minimize the ones that aren't so that's what i wanted to cover uh in today's video lecture but i'm going to have right after this one if you uh look on the subscribe playlist construction business management you'll see video 9b which will be taking it deeper into these particular five areas initial contact and inspection the things that we need to do things about prospect information and background your client your view of the client preparation testimonials we need to get testimonials we need to get people that have been happy with the work we've done we need raving fans that are helping to market for us nothing is better a google ad is not going to do the same as a client that is over the moon happy with the project you did and is telling their friends and neighbors about it nothing is going to be better than that and also it's going to be in your geographical area we've talked about that right place and that's going to be helpful as well so testimonials uh providing advice to to clients we'll be diving into that so making sure you're not self-serving about it that's building on the trustworthy side on the aspect of presenting presenting the estimate negotiating the contract as we said well i'm also going to have a separate pull out on that one performing the work you're going to be there you're going to be in the client's premises or you're going to be building this project for the client whether it's a office project or whether it is a residential project you're going to be performing the work so how well are you doing during that process in updating them and communicating with them and making sure that you're meeting those needs and follow-up service and warranty you got to bring it home you got to close it out and you've got to make sure that if there's any after the fact things that you tie them up because that could be enough that one little thing that the client now doesn't want to call you for the next project you got to make sure that you take it all the way home don't stop short with it so that's what i wanted to give you this sort of lead into the process and the steps of actually um selling and closing um the deal right so selling and closing the deal and we'll get into it in the next video so i'm tom stevenson and i just want to remind you click subscribe click the notifications to see updates to this video and others in the construction community that we're building and i hope you have a wonderful day and we'll see you next time bye for now