This coming winter looks like it will be a rough time for painting contractors. Economic turmoil and the uncertainty of a new President have clients holding tightly to their money. Painting work will likely be tough to come by for many contractors.
I have regularly written, on this blog and elsewhere, of several crucial components to success in the contracting business. Those ideas remain true even in an economic slow down. Those ideas are:
1. Market constantly
2. Develop systems (including marketing systems)
3. Manage cash flow
4. Sell at the right price
In a recession contractors are going to be very tempted to cut prices. This temptation will be even greater if leads are not regular and consistent. Thus the need for constant marketing. If you are not getting sufficient leads and cut prices as a result, you will suffer other consequences. Cash flow will diminish—lower prices means less cash. You will have difficulty raising prices later—you will have a reputation as a cheap painter. Insufficient leads is a symptom. Do not treat it by cutting prices. Treat it by dealing with the disease—lack of marketing.
Systems are crucial to efficient operations and consistent results. Efficiency and consistently have side benefits, such as fewer crises, more free time, and reduced stress. Reducing stress will be important during a recession. Reduced leads and tighter budgets are going to potentially stress even the most successful contractors. Anything you can do to reduce stress—and developing systems is one of the most effective ways—will be beneficial.
Cash flow management is always important. It is more so during tight economic times. Eliminating debt frees up money, reduces expenses, and allows you to build a cushion. Cutting prices will not improve cash flow.
Selling at the right price is never more important than during tough times. During good times jobs can fall into our laps. Often, if we simply show up and offer a fair price the job is ours. But things change during tight times. Customers hold onto their money and spend more time shopping for value. Don’t think that tough times will turn all customers into price shoppers—it won’t. But they will be more cognizant of value, and it is your job to offer and communicate the value you offer.
Tough economic times are a challenge and an opportunity. It is up to each of us whether we allow the challenge to beat us down, or we rise to the occasion and take advantage of the situation.
Saturday, November 22, 2008
Friday, November 14, 2008
A Change in the Blog
I had several motivations for starting this blog. One was to share some of the information I have learned over the years. Another was because I enjoy writing, and blogging provides an outlet for that. After more than 10 months of blogging and nearly 300 posts, I am finding this less fun than I once did. I find myself rehashing the same issues and it is getting harder to find fresh ideas.
Writing about business related issues is enjoyable, but it isn't my true passion when it comes to writing. Many years ago I was a free-lance writer focusing on current events and political issues. In the early 1990's I was actively involved in numerous local political issues. For the past 14 years or so my business has occupied much of my time and the writing I am most passionate about took a back seat.
That is no longer the case. Last year I was hired as a consultant to help fight a zoning ordinance in New Mexico. More recently I have revived the organization I founded in the 1990's to address local political issues. I started a blog-- Live Oaks-- to address those issues and have re-discovered my true passion.
This past week I have written about my desire to Get Out of the Office. My primary motivation is so that I can spend more time writing about topics that really excite me.
I will continue to post on this blog, but it will be far less frequently. My writing always has been, and always will be, primarily aimed at pleasing me. If others enjoy it, that is a bonus. But no decent writer can focus on his audience-- he must write for his own pleasure and enjoyment. And so, I will write about paint contracting when I find topics of interest to me.
Along a similar line, I have almost ceased visiting the various contractor forums I once frequented. I find little of interest, and those threads that have promise often decay into juvenile bickering. I may use the forums as a source for ideas for this blog, which is appealing because it will allow me to have my say without being subjected to the uninformed and insulting comments I often receive.
I thank you for reading my blog. It's been fun to do (for the most part).
Writing about business related issues is enjoyable, but it isn't my true passion when it comes to writing. Many years ago I was a free-lance writer focusing on current events and political issues. In the early 1990's I was actively involved in numerous local political issues. For the past 14 years or so my business has occupied much of my time and the writing I am most passionate about took a back seat.
That is no longer the case. Last year I was hired as a consultant to help fight a zoning ordinance in New Mexico. More recently I have revived the organization I founded in the 1990's to address local political issues. I started a blog-- Live Oaks-- to address those issues and have re-discovered my true passion.
This past week I have written about my desire to Get Out of the Office. My primary motivation is so that I can spend more time writing about topics that really excite me.
I will continue to post on this blog, but it will be far less frequently. My writing always has been, and always will be, primarily aimed at pleasing me. If others enjoy it, that is a bonus. But no decent writer can focus on his audience-- he must write for his own pleasure and enjoyment. And so, I will write about paint contracting when I find topics of interest to me.
Along a similar line, I have almost ceased visiting the various contractor forums I once frequented. I find little of interest, and those threads that have promise often decay into juvenile bickering. I may use the forums as a source for ideas for this blog, which is appealing because it will allow me to have my say without being subjected to the uninformed and insulting comments I often receive.
I thank you for reading my blog. It's been fun to do (for the most part).
Penny Wise and Pound Foolish
You have probably heard the phrase "penny wise and pound foolish". The phrase generally is applied to someone who pinches pennies and then turns around and spend exorbitantly. More essentially it means that someone is fretting over small details while ignoring the bigger picture.
I witnessed a humorous (at least it was humorous to me) example of this during a meeting with a general contractor. He was presenting several painting contractors with a very large project involving a national fast food company. He was giving us some general information about the project, which was going to occur in cities across the South. At one point he mentioned that we would be using Sherwin Williams' products, so we would not have problems getting the same products.
One of the contractors started asking which specific products we would be using. He wanted to know if we'd be using SuperPaint or ProMar, whether the walls would be flat or satin, etc. Mind you, this project was still in the planning phases and no products had actually been specified yet. The issue was not the product, but how we would organize production and insure quality control. The product was an irrelevant detail.
I recently read a similar story on Denise Landers' blog.
In other words, this person was going to spend countless hours trying to re-create something that already exists. All to save a few dollars. Not only was he being penny wise and pound foolish, he was also trying to re-invent the wheel. Both are a huge waste of resources.
I see a lot of contractors do this on a regular basis. They plod along, year after year, doing the same things. They vow that next year will be better. They keep looking for some magic marketing pill. They keep trying to hook up with a general contractor or builder who will overwhelm them with work. And they keep refusing to do the simple, proven things that will actually help them build a better business. That's more than penny wise and pound foolish, that's just plain foolish.
I witnessed a humorous (at least it was humorous to me) example of this during a meeting with a general contractor. He was presenting several painting contractors with a very large project involving a national fast food company. He was giving us some general information about the project, which was going to occur in cities across the South. At one point he mentioned that we would be using Sherwin Williams' products, so we would not have problems getting the same products.
One of the contractors started asking which specific products we would be using. He wanted to know if we'd be using SuperPaint or ProMar, whether the walls would be flat or satin, etc. Mind you, this project was still in the planning phases and no products had actually been specified yet. The issue was not the product, but how we would organize production and insure quality control. The product was an irrelevant detail.
I recently read a similar story on Denise Landers' blog.
One former user of Paper Tiger software told me he’d wanted to recreate that product’s great functionality by setting up an Excel spreadsheet and doing keyword searches to find his filed documents. I suggested he just buy the software instead, and maybe putting a completed time management worksheet in his first new file.
“Do you think you’ve saved money by trying to do that yourself, instead of just buying the software?” I asked. “Isn’t your time really worth more than that?”
In other words, this person was going to spend countless hours trying to re-create something that already exists. All to save a few dollars. Not only was he being penny wise and pound foolish, he was also trying to re-invent the wheel. Both are a huge waste of resources.
I see a lot of contractors do this on a regular basis. They plod along, year after year, doing the same things. They vow that next year will be better. They keep looking for some magic marketing pill. They keep trying to hook up with a general contractor or builder who will overwhelm them with work. And they keep refusing to do the simple, proven things that will actually help them build a better business. That's more than penny wise and pound foolish, that's just plain foolish.
Communications Issues
At this point the biggest challenge I will face in Getting out of the Office is maintaining good communications with customers and field personnel. Our office is typically staffed from 8 AM to 4:30 PM by my wife. This allows us to answer the phones live, schedule appointments and jobs, relay information, etc. is an efficient and timely manner.
If we are no longer manning the office all day long, we will face some significant communications challenges. We are considering several options: forwarding all calls to a cell phone; using voice mail and checking messages remotely; hiring a part-time office assistant; or, using Virtual PBX.
Each has some pros and cons. Forwarding phone calls to a cell phone would mean that we are "on call" all of the time, which partially defeats our purpose. We could of course, allow calls to go to voice mail. Checking phone messages remotely would allow us to do so on our schedule, but it can be slow. Hiring a part-time office assistant will impose additional costs, but would likely be the most effective.
Virtual PBX is a service I have used for several years. This service provides us with several phone numbers that are routed to our office. We use this for the other contractors we sell paint jobs for. When our phone rings, Virtual PBX identifies which company the call is for, so we can answer the call appropriately. During off hours voice mail messages are emailed to a designated recipient, so there is no need to periodically check messages.
While this isn't an earth shattering issue, it demonstrates why it is important to identify and evaluate different options when you are planning to get out of the bucket. There is seldom a perfect solution to a problem, and sometimes the best solution may be a combination of several.
Stay tuned as we work on getting out of the office.
If we are no longer manning the office all day long, we will face some significant communications challenges. We are considering several options: forwarding all calls to a cell phone; using voice mail and checking messages remotely; hiring a part-time office assistant; or, using Virtual PBX.
Each has some pros and cons. Forwarding phone calls to a cell phone would mean that we are "on call" all of the time, which partially defeats our purpose. We could of course, allow calls to go to voice mail. Checking phone messages remotely would allow us to do so on our schedule, but it can be slow. Hiring a part-time office assistant will impose additional costs, but would likely be the most effective.
Virtual PBX is a service I have used for several years. This service provides us with several phone numbers that are routed to our office. We use this for the other contractors we sell paint jobs for. When our phone rings, Virtual PBX identifies which company the call is for, so we can answer the call appropriately. During off hours voice mail messages are emailed to a designated recipient, so there is no need to periodically check messages.
While this isn't an earth shattering issue, it demonstrates why it is important to identify and evaluate different options when you are planning to get out of the bucket. There is seldom a perfect solution to a problem, and sometimes the best solution may be a combination of several.
Stay tuned as we work on getting out of the office.
Thursday, November 13, 2008
Identifying Our Options
Getting out of the Office presents us with numerous options. Some are more obvious than others. And some may take considerable digging to identify. To repeat yesterday's theme, that is why beginning with the end in mind is so important. If I know what I want to do, I can start looking for the best way to do it.
The Internet certainly makes it much easier to discover new processes, services, and ideas. It is such a useful and powerful tool that I sometimes wonder how I ever survived without it. But it is only a tool, and like any tool, its usefulness is ultimately determined by the skills and imagination of the user.
Search engines are a prime example. There are many keywords that one can choose when conducting a search. And, while most search engines are somewhat intuitive, they can only utilize the information entered. For example, if I enter "paint" in Google, the first page is primarily manufacturers. However, if I enter "paint contractor" I get entirely different results. This may seem obvious, but it has big implications.
Let's say I decide that my goal is to work from home. This is a pretty vague goal, and could mean virtually anything. Am I going to operate my own business? If so, what kind? Am I simply going to telecommute? If so, for whom? Am I going to stuff envelopes, or operate some kind of phone service, or what? I could do any of these and work at home. Because my goal is so vague, the options are almost unlimited.
But if I decide my goal is to write 30 hours a week, while operating my paint contracting business remotely, I have really narrowed things down. I now know specifically what I am shooting for, and the options also narrow.
But even with a very specific goal, I still need to discover what options are available for dealing with the myriad issues that will arise. For example, what options are available that will allow me to access customer information remotely? Which leads to another questions-- how do I find out?
While this example is relatively simple, it illustrates a bigger issue. It can be quite easy to limit ourselves to false alternatives, to give ourselves fewer options than really exist. The result may a solution that is inadequate, or worse, abandonment of our goal because the options do not seem realistic.
The Internet certainly makes it much easier to discover new processes, services, and ideas. It is such a useful and powerful tool that I sometimes wonder how I ever survived without it. But it is only a tool, and like any tool, its usefulness is ultimately determined by the skills and imagination of the user.
Search engines are a prime example. There are many keywords that one can choose when conducting a search. And, while most search engines are somewhat intuitive, they can only utilize the information entered. For example, if I enter "paint" in Google, the first page is primarily manufacturers. However, if I enter "paint contractor" I get entirely different results. This may seem obvious, but it has big implications.
Let's say I decide that my goal is to work from home. This is a pretty vague goal, and could mean virtually anything. Am I going to operate my own business? If so, what kind? Am I simply going to telecommute? If so, for whom? Am I going to stuff envelopes, or operate some kind of phone service, or what? I could do any of these and work at home. Because my goal is so vague, the options are almost unlimited.
But if I decide my goal is to write 30 hours a week, while operating my paint contracting business remotely, I have really narrowed things down. I now know specifically what I am shooting for, and the options also narrow.
But even with a very specific goal, I still need to discover what options are available for dealing with the myriad issues that will arise. For example, what options are available that will allow me to access customer information remotely? Which leads to another questions-- how do I find out?
While this example is relatively simple, it illustrates a bigger issue. It can be quite easy to limit ourselves to false alternatives, to give ourselves fewer options than really exist. The result may a solution that is inadequate, or worse, abandonment of our goal because the options do not seem realistic.
Tuesday, November 11, 2008
Begin with the End in Mind
Yesterday I mentioned the importance of identifying the goal of Getting out of the Office, that is, what we want the business to look like in the end. The same applies to Getting out of the Bucket--what do you want your business to look like when you are no longer painting each day.
Identifying the end is important in several respects. Most importantly, it provides direction and and gives us a destination. If we don't know where we are going, how will we know when we get there? Also, it provides us with a certain psychological motivation. If we can envision our goal, that goal becomes more real. In a sense, we get a certain experience of it, which can help move us forward.
For me, Getting out of the Office is the means to another end. I want to spend more time writing magazine articles, and perhaps a book. This requires large segments of uninterrupted time, which is hard to get sitting in an office with a phone ringing every 20 minutes. I would also like to do more traveling, both for pleasure and for researching writing assignments.
These goals necessitate the need to have procedures that allow me to spend minimal time communicating with customers and field personnel, while simultaneously keeping everyone informed. And I need to be able to do this whether I am working in my home office or I am out of town.
Identifying my end goals has allowed me to identify the issues that I must address. For example, how will phone calls be handled? How will appointments be scheduled? How will I access customer files remotely? How will we prepare job folders and schedule jobs if we are out of town? By beginning with the end in mind, I now have a better idea of how I will get there. And I will certainly have a lot fewer surprises along the way.
Identifying the end is important in several respects. Most importantly, it provides direction and and gives us a destination. If we don't know where we are going, how will we know when we get there? Also, it provides us with a certain psychological motivation. If we can envision our goal, that goal becomes more real. In a sense, we get a certain experience of it, which can help move us forward.
For me, Getting out of the Office is the means to another end. I want to spend more time writing magazine articles, and perhaps a book. This requires large segments of uninterrupted time, which is hard to get sitting in an office with a phone ringing every 20 minutes. I would also like to do more traveling, both for pleasure and for researching writing assignments.
These goals necessitate the need to have procedures that allow me to spend minimal time communicating with customers and field personnel, while simultaneously keeping everyone informed. And I need to be able to do this whether I am working in my home office or I am out of town.
Identifying my end goals has allowed me to identify the issues that I must address. For example, how will phone calls be handled? How will appointments be scheduled? How will I access customer files remotely? How will we prepare job folders and schedule jobs if we are out of town? By beginning with the end in mind, I now have a better idea of how I will get there. And I will certainly have a lot fewer surprises along the way.
Monday, November 10, 2008
Getting Out of the Office
Last week I wrote about the Four Hour Workweek and stated my intention to spend less time on my contracting business in 2009. As I work through this process I will share how I address the issues that arise, the tools I use to do so, and some of the procedures and processes I develop. While my goal may be different from yours, the same principles apply to Getting out of the Bucket as to Getting out of the Office.
My wife works with me in the office, so Getting out of the Office applies to both of us. Doing so will require some changes in our business, such as communications with customers, accessing information, scheduling, etc. Addressing these issues, and developing procedures is our primary goal for the next several months.
We have several motivations for Getting out of the Office. The most important is that we would like to spend more time pursuing other interests. It is difficult to do this when tethered to an office.
We have considered selling the business but see no real reason to do so. We make a pretty decent income while working part-time. Maintaining a business that generates semi-passive income simply makes the most financial sense at this point.
As I mentioned, the principles involved in this are essentially the same as Getting out of the Bucket. In both situations there is a need to maintain operations while the owner is not omnipresent. This presents numerous challenges, and while the details of those challenges differ, the same basic approach applies-- develop systems and procedures.
Our first step in this process is identifying our end goal, that is, what we want to accomplish and what we want our business to look like in the end. In other words, we first need to know where we are going before we can decide how to get there.
My wife works with me in the office, so Getting out of the Office applies to both of us. Doing so will require some changes in our business, such as communications with customers, accessing information, scheduling, etc. Addressing these issues, and developing procedures is our primary goal for the next several months.
We have several motivations for Getting out of the Office. The most important is that we would like to spend more time pursuing other interests. It is difficult to do this when tethered to an office.
We have considered selling the business but see no real reason to do so. We make a pretty decent income while working part-time. Maintaining a business that generates semi-passive income simply makes the most financial sense at this point.
As I mentioned, the principles involved in this are essentially the same as Getting out of the Bucket. In both situations there is a need to maintain operations while the owner is not omnipresent. This presents numerous challenges, and while the details of those challenges differ, the same basic approach applies-- develop systems and procedures.
Our first step in this process is identifying our end goal, that is, what we want to accomplish and what we want our business to look like in the end. In other words, we first need to know where we are going before we can decide how to get there.
Friday, November 7, 2008
Plato, Kant, and Dewey
As an Objectivist, I am accustomed to others disagreeing with my ideas. My ideas challenge the conventional thinking and this necessarily puts me at odds with others. I do not intentionally seek out conflict—it simply goes with the territory when one holds ideas that are outside of the mainstream.
Because my ideas are foreign to most individuals, it can be particularly frustrating when I explain my position on a particular issue. Both the content and the method of my argument is often misunderstood. It is not uncommon for my arguments to be dismissed out of hand, with my opponent saying something to the effect of “nobody could seriously believe that.”
While such casual dismissals are disturbing, I do find them somewhat understandable. Few individuals have studied philosophy or explicitly identified their ideas and the validity of those ideas. Most individuals have absorbed their ideas over their lifetime, accepting an olio of ideas whose source and validity are often unknown. (This is not intended as a slam, just a statement of fact.) For example, few individuals have heard of Immanuel Kant or John Dewey, yet their ideas are widely accepted. Few individuals are familiar with the ideas of Karl Marx or Plato, yet their ideas are widely accepted.
I see the influence of these men and their minions on a daily basis. “That may be true for you, but not for me” came from Dewey. “We can’t be certain of anything” came from Kant. “Corporate executives are overpaid” came from Marx. “We need to protect people from themselves” came from Plato. These clichés and many more like them are often uttered with no understanding of their true meaning or their implications.
You might think that this is a bunch of useless theory and it has nothing to do with real life and operating a painting business (you got that from Dewey). You might think that my ideas work for me, but you run your business differently (you got that from Dewey as well). You might think it’s admirable to be so principled, but I’m not being practical (another idea from Dewey). You might think I’m an egoist jerk for insisting that I am right and most everyone else is wrong (Dewey again).
The ideas we accept as true ultimately determine the choices we make and the actions we take. It does not matter whether we know the source of those ideas, whether we have consciously considered them or not, or whether we understand their implications. The power of ideas is an inescapable fact of human life.
I recently witnessed this in action in a very interesting fashion. Members of a popular forum for painting contractors were discussing illegal immigration. I commented that I found it interesting that such discussions seldom, if ever, included any discussion of the legitimacy of our immigration laws. I stated that our immigration laws are immoral because they violate an individual’s rights. I was quickly attacked and accused of knowingly and intentionally hiring illegal aliens. I was told that my arguments were simply an attempt to rationalize my behavior (he got that idea from Marx).
In another thread on that forum I was discussing compensation methods for production personnel with another contractor. At one point he stated that my ideas might work for me, but he runs his business differently (this idea comes from Dewey). I then started another thread in which I stated that sound business principles apply to all businesses, and only the details of implementation differ.
Before long the thread was hijacked into an inquisition into whether I hire illegal aliens. My comments regarding business principles were ignored and my character was attacked. I was accused of being overly sensitive when I pointed out these facts. I was accused of making statements that could be found nowhere in any of my posts.
At the end of the day the entire experience was rather amusing. It was also illuminating because it revealed the true character of my antagonists. They may not know the source of their ideas, and they may not understand the implications of those ideas, but they are responsible for what they regard as true.
Each individual is a being of self-made soul (I got that from Aristotle). We choose the ideas that will guide our lives. We can do so explicitly through careful study and thought, or we can do it implicitly by accepting the ideas that are tossed our way. In either case, the choices we make will determine our character. The choices we make will determine the nature of our words and actions, and thus reveal our soul to the world.
Because my ideas are foreign to most individuals, it can be particularly frustrating when I explain my position on a particular issue. Both the content and the method of my argument is often misunderstood. It is not uncommon for my arguments to be dismissed out of hand, with my opponent saying something to the effect of “nobody could seriously believe that.”
While such casual dismissals are disturbing, I do find them somewhat understandable. Few individuals have studied philosophy or explicitly identified their ideas and the validity of those ideas. Most individuals have absorbed their ideas over their lifetime, accepting an olio of ideas whose source and validity are often unknown. (This is not intended as a slam, just a statement of fact.) For example, few individuals have heard of Immanuel Kant or John Dewey, yet their ideas are widely accepted. Few individuals are familiar with the ideas of Karl Marx or Plato, yet their ideas are widely accepted.
I see the influence of these men and their minions on a daily basis. “That may be true for you, but not for me” came from Dewey. “We can’t be certain of anything” came from Kant. “Corporate executives are overpaid” came from Marx. “We need to protect people from themselves” came from Plato. These clichés and many more like them are often uttered with no understanding of their true meaning or their implications.
You might think that this is a bunch of useless theory and it has nothing to do with real life and operating a painting business (you got that from Dewey). You might think that my ideas work for me, but you run your business differently (you got that from Dewey as well). You might think it’s admirable to be so principled, but I’m not being practical (another idea from Dewey). You might think I’m an egoist jerk for insisting that I am right and most everyone else is wrong (Dewey again).
The ideas we accept as true ultimately determine the choices we make and the actions we take. It does not matter whether we know the source of those ideas, whether we have consciously considered them or not, or whether we understand their implications. The power of ideas is an inescapable fact of human life.
I recently witnessed this in action in a very interesting fashion. Members of a popular forum for painting contractors were discussing illegal immigration. I commented that I found it interesting that such discussions seldom, if ever, included any discussion of the legitimacy of our immigration laws. I stated that our immigration laws are immoral because they violate an individual’s rights. I was quickly attacked and accused of knowingly and intentionally hiring illegal aliens. I was told that my arguments were simply an attempt to rationalize my behavior (he got that idea from Marx).
In another thread on that forum I was discussing compensation methods for production personnel with another contractor. At one point he stated that my ideas might work for me, but he runs his business differently (this idea comes from Dewey). I then started another thread in which I stated that sound business principles apply to all businesses, and only the details of implementation differ.
Before long the thread was hijacked into an inquisition into whether I hire illegal aliens. My comments regarding business principles were ignored and my character was attacked. I was accused of being overly sensitive when I pointed out these facts. I was accused of making statements that could be found nowhere in any of my posts.
At the end of the day the entire experience was rather amusing. It was also illuminating because it revealed the true character of my antagonists. They may not know the source of their ideas, and they may not understand the implications of those ideas, but they are responsible for what they regard as true.
Each individual is a being of self-made soul (I got that from Aristotle). We choose the ideas that will guide our lives. We can do so explicitly through careful study and thought, or we can do it implicitly by accepting the ideas that are tossed our way. In either case, the choices we make will determine our character. The choices we make will determine the nature of our words and actions, and thus reveal our soul to the world.
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