This could be a rough year for many painting contractors. With construction slowing and home owners holding on to their money more tightly, leads are likely to slow. Customers will likely be more price conscious than ever. Since "anyone can paint", we might see an increase in competition.
It could become very easy to get stressed out and focus on all of the negatives. This can feed on itself-- often when we focus on the negatives we stop being pro-active and wallow in our misery. Focusing on the negatives can blind us to the many positives in our life.
In late December somebody turned me on to the idea of a Happiness Journal through HBL. The idea is pretty simple-- each day you write down 3 things that made you happy or brought you pleasure. These don't need to be huge events-- it could be as simple as a good meal or hearing your favorite song. The idea is to spend a few minutes reflecting on the positive.
This can have a huge impact psychologically. It gets us to recognize the good things that we have in our life. It reminds us that there are positives. Just a few minutes a day thinking about what makes us happy can make a huge difference, and it can change our perspective on the problems.
Running a business can be difficult at times. And with the economy the way it is, it could get worse. Anything we can do to keep a positive outlook helps. As the owner of a business, it can sometimes seem like the weight of the world is upon our shoulders. Thinking about the positive can help lift some of that weight.
I started doing a Happiness Journal on January 1. I tend to be optimistic and focus on the positive, but I’ve still found it both fun and illuminating. Some days I struggle to select only 3 items—I have many more to choose from. Other days, finding 3 items has been a little more difficult. For example, I came down with a cold on New Year’s Eve, which made the entire weekend a bit of a downer and less active than normal. But just thinking about what I had enjoyed during the day brightened my spirits.
Life is full of ups and downs. We don't hit a home run everyday. But we don't strike out every time at the plate either. Sometimes a series of singles are just are rewarding and meaningful as a grand slam. After all, a grand slam isn't possible without three other runners getting on base.
My wife is also keeping a Happiness Journal, and we intend to share and discuss the items we have listed. This will be a lot of fun in a number of ways. It will be an opportunity for us to share our thoughts and discuss positive events. We will probably learn a few things about one another.
I certainly don’t mean to imply that we should ignore our problems or pretend that everything is fine and dandy. But at the same time, we shouldn’t ignore the good things and pretend that our world is falling apart. A Happiness Journal helps keep the proper perspective, and that may be more important than ever in the coming year.
Wednesday, January 14, 2009
Monday, January 5, 2009
Quick Roundup 2
The Power of Pausing
Good sales skills begin with good listening skills. Brian Tracy suggests pausing before you respond to your customers. Pausing has three benefits
I've seen a lot of contractors (and other people as well) who are so eager to share what is on their mind that they completely ignore what the customer is saying. The customer will realize this, and it will greatly undermine their confidence in you. Communication is a two-way street. Do your part by listening carefully and being certain you understand what you are hearing.
Price vs. Service
Many companies are lowering prices in order to retain customers. Bill Hogg points out that Ambercrombie and Fitch aren't. They plan to retain their brand--which is not based on price. Many contractors are going to be tempted to cut their prices during this tough economic times. But what will they do when the market recovers and their customers expect the lower prices? A better strategy is to improve service, which might even permit you to increase prices. Don't view the economy as an obstacle; view it as an opportunity.
Make Their Phone Ring
John Jantsch suggest a simple, yet effective way to generate leads. Rather than sitting around waiting for the phone to ring, make your customer's phone ring--give them a call and thank them for their past business. Discuss ways you can help them now. Ask what you can do better. Most importantly, remind them you want their business.
Low-Cost Marketing Ideas
Maria Garcia offers seven low-cost marketing ideas, including writing articles and networking. If your advertising budget is feeling the pinch, some of these ideas will get the word out without breaking the bank.
Good sales skills begin with good listening skills. Brian Tracy suggests pausing before you respond to your customers. Pausing has three benefits
The first is that you avoid the risk of interrupting the prospect if he or she has just stopped to gather his or her thoughts. Remember, your primary job in the sales conversation is to build and maintain a high level of trust, and listening builds trust.
The second benefit of pausing is that your silence tells the prospect that you are giving careful consideration to what he or she has just said. By carefully considering the other person's words, you are paying him or her a compliment.
The third benefit of pausing before replying is that you will actually hear and understand the prospect better if you give his or her words a few seconds to soak into your mind.
I've seen a lot of contractors (and other people as well) who are so eager to share what is on their mind that they completely ignore what the customer is saying. The customer will realize this, and it will greatly undermine their confidence in you. Communication is a two-way street. Do your part by listening carefully and being certain you understand what you are hearing.
Price vs. Service
Many companies are lowering prices in order to retain customers. Bill Hogg points out that Ambercrombie and Fitch aren't. They plan to retain their brand--which is not based on price. Many contractors are going to be tempted to cut their prices during this tough economic times. But what will they do when the market recovers and their customers expect the lower prices? A better strategy is to improve service, which might even permit you to increase prices. Don't view the economy as an obstacle; view it as an opportunity.
Make Their Phone Ring
John Jantsch suggest a simple, yet effective way to generate leads. Rather than sitting around waiting for the phone to ring, make your customer's phone ring--give them a call and thank them for their past business. Discuss ways you can help them now. Ask what you can do better. Most importantly, remind them you want their business.
Low-Cost Marketing Ideas
Maria Garcia offers seven low-cost marketing ideas, including writing articles and networking. If your advertising budget is feeling the pinch, some of these ideas will get the word out without breaking the bank.
Friday, December 19, 2008
Quick Roundup
Clarify Your Goals
The clarity of your goals will ultimately have a large impact on your ability to achieve those goals. Vague goals only lead to confusion, and often send us in the wrong direction. For example, a goal to spend more time with your family in 2009 is much different from a goal to achieve the financial position to be able to spend more time with your family. On the surface, they may seem the same, but the latter specifies the more fundamental goal. In other words, achieving a certain financial position makes more free time possible.
Brian Tracy addresses this in The Law of Clarity:
No matter our goal, we must identify the cause and the effect. And we must focus in on the real effect we want. That will often help us identify and clarify the specific steps we must take to achieve that goal.
What Was That Bump?
In working with other contractors I am often struck by how resistant they are to try a new idea. They seem overwhelmed by the potential for making a mistake or failing, and this fear stops them from attempting something new. For example, many contractors are extremely reluctant to raise their prices.
Certainly, nobody enjoys making a mistake or failing. But it is a part of life and business. As Dan Miller writes in Go Ahead--Make More Mistakes:
An essential part of entrepreneurism is taking calculated risks. Doing what you've always done will continue to get you the same results. Getting different--better--results means doing something different, and that necessarily involves the risk of making a mistake or failing. Taking calculated risks won't eliminate mistakes, but it often reduces them to minor bumps.
Five Essential Skills
Michael Gerber's new book, The Power Point, lists 5 essential skills that every entrepreneur must possess. Mastering these skills, he says, is necessary to create a great business. The skills are:
Not only do these skills help us achieve our goals, they also help us clarify those goals and develop a plan that will minimize the risks involved.
The Two-Minute Rule
One of the biggest obstacles to achieving our goals is procrastination. While there are many causes of procrastination, they all result in delaying work on some task or project. We may write the task down, or swear that we will remember it, or whatever. But we delay doing it, and suddenly we can have a very long list of tasks. David Allen, of Getting Things Done, developed the Two-Minute Rule--if a task will take less than 2 minutes to complete, do it now. Here is a short video--it is only 2 minutes long--on how to apply the Two-Minute Rule.
The clarity of your goals will ultimately have a large impact on your ability to achieve those goals. Vague goals only lead to confusion, and often send us in the wrong direction. For example, a goal to spend more time with your family in 2009 is much different from a goal to achieve the financial position to be able to spend more time with your family. On the surface, they may seem the same, but the latter specifies the more fundamental goal. In other words, achieving a certain financial position makes more free time possible.
Brian Tracy addresses this in The Law of Clarity:
People with clear, written goals, accomplish far more in a shorter period of time than people without them could ever imagine. This is true everywhere and under all circumstances.
No matter our goal, we must identify the cause and the effect. And we must focus in on the real effect we want. That will often help us identify and clarify the specific steps we must take to achieve that goal.
What Was That Bump?
In working with other contractors I am often struck by how resistant they are to try a new idea. They seem overwhelmed by the potential for making a mistake or failing, and this fear stops them from attempting something new. For example, many contractors are extremely reluctant to raise their prices.
Certainly, nobody enjoys making a mistake or failing. But it is a part of life and business. As Dan Miller writes in Go Ahead--Make More Mistakes:
Here’s what Robert Kiyosaki (Rich Dad Poor Dad) has to say about “bad luck.” He says, “Making mistakes and becoming smarter is the job of an entrepreneur; not making mistakes is the job of an employee.”
An essential part of entrepreneurism is taking calculated risks. Doing what you've always done will continue to get you the same results. Getting different--better--results means doing something different, and that necessarily involves the risk of making a mistake or failing. Taking calculated risks won't eliminate mistakes, but it often reduces them to minor bumps.
Five Essential Skills
Michael Gerber's new book, The Power Point, lists 5 essential skills that every entrepreneur must possess. Mastering these skills, he says, is necessary to create a great business. The skills are:
- Concentration--The inner force and energy that allows you to focus your attention.
- Discrimination--The ability to choose upon what, where and who our attention (or concentration) is directed.
- Organization--This is the ability to turn chaos into order.
- Innovation--Innovation is that spark of genius that all entrepreneurs have and should be seen as an asset.
- Communication--The ability to transmit ideas with clarity, precision, passion and purpose.
Not only do these skills help us achieve our goals, they also help us clarify those goals and develop a plan that will minimize the risks involved.
The Two-Minute Rule
One of the biggest obstacles to achieving our goals is procrastination. While there are many causes of procrastination, they all result in delaying work on some task or project. We may write the task down, or swear that we will remember it, or whatever. But we delay doing it, and suddenly we can have a very long list of tasks. David Allen, of Getting Things Done, developed the Two-Minute Rule--if a task will take less than 2 minutes to complete, do it now. Here is a short video--it is only 2 minutes long--on how to apply the Two-Minute Rule.
Tuesday, December 16, 2008
Take What You Want, and Pay For It
I recently received an email asking how the owner of a paint contracting company should determine his salary. I have previously written that it is often recommended that the owner be paid 8% to 10% of the company’s revenues as his salary. As the emailer pointed out, if the company does $120K in a year, this means the owner’s salary would be $12K at most, which is not very good money.
At the risk of sounding flippant, the owner’s salary should be whatever you want it to be, so long as it is reasonable and fair. Of course, that raise the question—what is reasonable and fair?
To begin, the owner should be paid for each service he renders to his business. If he does sales and estimating, he should be paid for it. If he works in the field, he should be paid for it. As a general rule, the owner should be paid 8% to 10% of the company’s revenues, and he should also pay himself a commensurate amount as a sales commission. When he works in the field he should pay himself an hourly rate.
Doing all of this accomplishes several things. First, the cost of these expenses is built into the price. If the owner hires an estimator, that cost has been built into his price and he avoids a dramatic price increase. Similarly with paying himself for his field work. Second, the owner makes a salary that more accurately reflects his efforts. This allows him to live a reasonably comfortable life, save for his future, etc.
But this still does not tell us what the owner’s salary should be.
The 8% to 10% suggestion is only a guideline. Like the directions provided by Google Maps, one should take a look around to determine the accuracy of those guidelines. One should look at one’s personal and business finances to determine what is fair and reasonable.
The starting point is one’s personal finances. What do you need to make to pay your bills, have money to save and invest, and enjoy life? This is where you must be reasonable. It would be easy to say that you want to make $100K, but if your business is only doing $120K, this is clearly not reasonable. You must also be fair to yourself—you must make enough to pay your bills and invest in your future. If you don’t, then why own a business and endure the stress and headaches?
I should clarify one important point. There are three separate components involved in the owner’s income if he also does sales and works in the field—owner’s salary, sales commission, and painter’s wages. Each is separate and distinct, and the total is the owner’s income. But in one’s budget, and on one’s Income Statements, each item will appear separately.
Identifying your personal income goal is the first step. This number should then be used to determine what your selling price must be. If your income goal requires that you sell at a reasonable price—that is, a price that you can actually sell paint jobs at, such as $45 an hour—then your income goal is reasonable. If the calculated selling price is not reasonable—you don’t think you can sell at that price—you are faced with two options. You must reduce your income goal, or learn to sell at the requisite price. Unless your desired income is outrageous, I strongly suggest the latter.
This last point is particularly important. It is a fact that 90% of the contractors who started a business this year will fail within 5 years. The primary reason for that failure is the simple fact that they do not make any money. And the cause for that is not charging enough. There is no reason to endure the trials and tribulations, the headaches and stress, and all of the challenges involved in owning a business if you are not going to make a decent salary.
An old Spanish proverb states: “Take what you want, and pay for it”. That applies to the owner of a paint contracting company. Take the salary you want. You pay for it by learning the skills that are necessary.
At the risk of sounding flippant, the owner’s salary should be whatever you want it to be, so long as it is reasonable and fair. Of course, that raise the question—what is reasonable and fair?
To begin, the owner should be paid for each service he renders to his business. If he does sales and estimating, he should be paid for it. If he works in the field, he should be paid for it. As a general rule, the owner should be paid 8% to 10% of the company’s revenues, and he should also pay himself a commensurate amount as a sales commission. When he works in the field he should pay himself an hourly rate.
Doing all of this accomplishes several things. First, the cost of these expenses is built into the price. If the owner hires an estimator, that cost has been built into his price and he avoids a dramatic price increase. Similarly with paying himself for his field work. Second, the owner makes a salary that more accurately reflects his efforts. This allows him to live a reasonably comfortable life, save for his future, etc.
But this still does not tell us what the owner’s salary should be.
The 8% to 10% suggestion is only a guideline. Like the directions provided by Google Maps, one should take a look around to determine the accuracy of those guidelines. One should look at one’s personal and business finances to determine what is fair and reasonable.
The starting point is one’s personal finances. What do you need to make to pay your bills, have money to save and invest, and enjoy life? This is where you must be reasonable. It would be easy to say that you want to make $100K, but if your business is only doing $120K, this is clearly not reasonable. You must also be fair to yourself—you must make enough to pay your bills and invest in your future. If you don’t, then why own a business and endure the stress and headaches?
I should clarify one important point. There are three separate components involved in the owner’s income if he also does sales and works in the field—owner’s salary, sales commission, and painter’s wages. Each is separate and distinct, and the total is the owner’s income. But in one’s budget, and on one’s Income Statements, each item will appear separately.
Identifying your personal income goal is the first step. This number should then be used to determine what your selling price must be. If your income goal requires that you sell at a reasonable price—that is, a price that you can actually sell paint jobs at, such as $45 an hour—then your income goal is reasonable. If the calculated selling price is not reasonable—you don’t think you can sell at that price—you are faced with two options. You must reduce your income goal, or learn to sell at the requisite price. Unless your desired income is outrageous, I strongly suggest the latter.
This last point is particularly important. It is a fact that 90% of the contractors who started a business this year will fail within 5 years. The primary reason for that failure is the simple fact that they do not make any money. And the cause for that is not charging enough. There is no reason to endure the trials and tribulations, the headaches and stress, and all of the challenges involved in owning a business if you are not going to make a decent salary.
An old Spanish proverb states: “Take what you want, and pay for it”. That applies to the owner of a paint contracting company. Take the salary you want. You pay for it by learning the skills that are necessary.
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