Solid Foundation Needed For Success

November 12, 2004
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Putting the cart before the horse is a tired, old cliche that just keeps popping up over and over again. It is easy to get ahead of ourselves, especially if we haven't mapped out a plan of action in advance.

How many times have you seen a good idea to promote your business and rushed to implement it without taking the time to plan it properly and track its success?

Just as it is important to have an annual budget for your business, it is equally important to have a solid business plan. The plan should include marketing, advertising, and merchandising - all methods of promoting your business. But unless you have a solid budget, even the best promotions are doomed to failure.

Using A Familiar Example

In the Nov. 1 issue of The News, readers were introduced to Terry Boone, owner of T&T Sales & Service, St. Paul, Va. Boone agreed to let The News arrange for a number of business consultants to the HVACR trade help him sort out what he needs to plan his business future.

Boone had been hampered by some poor business planning and was striving unsuccessfully to correct his problems.

In truth, he had been spending too much time working in the field and not enough time working on his business plan. While he makes plans to expand his staff, business consultants have been working on Boone's business plan.

Boone would like to promote his new indoor air quality (IAQ) business expansion in nearby Abingdon, but in order to accomplish this goal he realized he needed a solid business plan.

The consultants who have been working with Boone include Al Levi, president of Appleseed Business Inc.; Adams Hudson, founder of Hudson, Ink; Mack Heaton, a consultant with No Secrets Training; and Ruth King, CEO of ProNetwork.TV Inc.

Establishing Systems

Levi provides contractors with the tools designed to develop the proper systems for marketing, pricing, and business planning.

This, he said, allows contractors to lay the foundation for effective merchandising and promotions. With his two-day Planning Power! consultation, Levi breaks down eight fundamentals of owning and operating a successful business.

His "Power Suite" includes "Operating Power," "Financial Power," "Selling Power," "Marketing Power," "Staffing Power," "Leadership Power," "Coaching Power," and "Training Power."

"These eight power fundamentals are the foundation of a sound business plan," said Levi, adding, "My thorough ‘Needs Assessment' allows contractors to learn what they're doing right so they can do more of it; learn what they need to stop doing and why; and learn what they need to begin doing and how they'll benefit."

Marketing Remake

Hudson enlists a seven-step program called the "Marketing Remake." Here is what it contains:

1. Commitment. Be willing to differentiate from competitors, said Hudson.

2. Focus. What are the marketing goals? Review current marketing costs and plug the biggest holes, he suggested.

3. Review Yellow Pages budget to find how much money is wasted. "I mean ‘investing poorly' there," said Hudson. "We'll create a new, typically smaller ad to increase your leads-per-dollar."

4. Allocate money for "high-performance marketing." This means more leads, better image, and greater retention for less money, he said.

5. Create a simple marketing plan based on a "marketing profile." There are three profiles showing the ideal percent for each media and each message type, said Hudson.

6. Select ads for the next 90 days. "This should take 20 minutes, mixing service and replacement, depending on your goals," he said.

7. Retain what is gained. Each customer should get a newsletter at least twice a year, believes Hudson. The goal is to move customers to a maintenance agreement program and to refer others.

"With a polite e-mail, fax, or phone call, you can request which item above is your biggest challenge and we'll send you a free report to help you through," said Hudson.

Sales, Profitability

Heaton helps contractors increase sales and profits. He evaluates where they are and where they want to be. Heaton then helps them lay out a business/operation plan to incorporate sales, marketing/advertising, operations, pricing, and service. This plan is then implemented into the business.

"I believe in focusing on what is in the customer's best interest to achieve the dominant position in the market," he said. "I have contractors achieving net profit before tax above 30 percent. This can only be done long term by having an exceptional customer service culture throughout the company."

Another foundation block of Heaton's program for companies is the service agreement. He de-scribed it as helping "convert customers to clients."

"These clients then partner up with the company for the long term to be taken care of at the highest level of customer service," said Heaton. "This allows the company to achieve higher profits because the other companies don't deliver the same service to the market. This ‘plants' the equipment replacements for the company for the future."

Heaton also trains the sales reps how to let the customer buy without pressuring.

Service Agreements

King feels that service agreements are a cornerstone for locking in customers and providing cash flow during the slower times of the year.

"Service agreements are the foundation for any service business," she said. "They even out seasonality, make your company less dependent on the weather, and build customer trust."

King said once you have the basics completed (pricing, what value you will provide in your service agreements, the number of times per year that you visit the customer, etc.), you can then begin the plan to promote the agreements.

"On average, your technicians should get one yes for every three people they ask to invest in an agreement," said King. "You need to make sure that your technicians believe in service agreements and create the procedure for their sale and promotion.

"One of the keys is to generate enough calls through referrals and advertising/public relations to enable you to ask the question. Once the customer comes through the door, then your dispatcher, your service technicians, and your follow-up personnel must complete the sales process."

Need to contact any of these consultants? To reach Levi, e-mail him at info@appleseedbusiness. To contact King, e-mail her at RuthKing@pronetwork.tv. For Hudson, e-mail him at reestuff@hudsonink.com. Heaton can be reached at Mack@nosecrets.com.

Publication date: 11/15/2004

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