Study Up: More Education Means More Business

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By Michael Stone
At a recent convention, I noticed many contractors visiting the exhibit hall but few attending the educational classes. I asked one contractor on the exhibit floor why he wasn’t attending classes. His response was, “Money is tight, can’t afford it.” So, he could afford to look at new tools and products being offered by manufacturers, and maybe sit in on the free “how to do it” classes.

These classes are mechanical stuff, how to do this or that. They last 30 minutes to an hour, many with 75 to 100 people attending, frequently it’s standing room only. Many of the attendees are looking for some pearl of wisdom that will somehow double their production speed.

“If I could only roof the house faster, think of all the money I could make.” Folks, if you don’t get leads in and have potential jobs to sell, you won’t get a chance to use those tools.

This is not a practice round, it’s the real thing. If you don’t get it right, you are gone, out of here, history. Over 90 percent of all business failures in the construction industry are due either to poor business management or not charging enough for the work being done. Less than two percent of business failures happen because of problems on the job site. So shouldn’t construction-related business owners focus on the stuff that causes most failures?

At the same convention, educational classes were held on topics such as business management, building websites, or how to use social media to increase the number of leads coming into the company. Our coaching clients with an up-to-date website with good search engine optimization (SEO) get 40 percent to 60 percent of their new business from that website.

Think about it this way. If your business doesn’t make it, how will it impact your family; your employees; your suppliers; their families? What will it do to your customers that may have something go wrong with the job you did for them? How can you make yourself a better businessperson?

Start here.

Sit down with a pad and pencil.

Finish reading this newsletter.

Take a minute to read past newsletters and check out our blogs and eLocal’s Resources page. A host of useful business information can be found at www.markupandprofit.com, www.elocalplumbers.com/blog and at www.elocalplumbers.com/resources/. Write down everything and anything that is new or you are not sure about. In other words, list those things about business that you don’t know.

Spend a few days, get on the Internet and find other newsletters or articles about business management for plumbing contractors.

Sign up for free trade magazines (see http://elocalplumbers.tradepub.com/). Read every related Blog you can find. Write down everything that you do not know or understand.

Consider these starter topics:
• What is SEO, and how can you determine how your website is performing?
• Can you read and understand your balance sheets and profit and loss statements?
• How should you price your jobs to make sure you can pay all your overhead expenses, have funds available to market your business, and still make a profit?
• What is the difference between markup and gross margin? Do you know the formulas to convert one to the other?
• Is dumping all your overhead onto your hourly rate a good idea or not?
• Where and how should you be marketing your business?
• What should you do when the homeowner: wants an itemized bid?
• What should you do when the homeowner wants to provide their own materials?
• What should you do when the homeowner wants you to email their bid because they are busy?
• What’s the right number of employees for your size business?
• Are you taking full advantage of the technological tools available to help run and manage your business?

Make your list and prioritize it based on how much you know about the items. Put the item you know least at the top. Now get busy and read one hour each day, starting with the subject at the top of your list. If you find out about a class in your area that covers that topic, attend the class. There are numerous books and tapes available for purchase specifically for construction-related business owners. Become the guru of that topic, then move on to the next topic.

Do this and in a year, you and your business will be doing just fine. When you educate yourself in business practices, your business will benefit and you will be able to go to conferences and attend any class you want, the money will be there.

Michael Stone, author of Markup and Profit; A Contractor’s Guide to Profitable Sales, has more than five decades of experience in the building and remodeling industry. He can be found on the web at www.markupandprofit.com.