CHAPTER 2
The Business Designing & Building The Framework For Your Business
Now we get to the meat in the sandwich. In the same way as you designed the blue print for your new self in the last chap- ter, in this chapter you will do the same for your business.
You are the key to your business success, that is why it’s vital to build you first, then build the business around it. Once you build a steady foundation within yourself and maintain it, you will succeed.
“Disneyland is a work of love. We didn't go into Disneyland just with the idea of making money.” - Walt Disney
SECT I ON 1
Product & Market
What are you offering and who are you offering it to?
CONTENTS CHAPTER 2 SECT I ON 1
★ Your Product Or Service
★ Your Customer
★ Your Pricing
★ Your Brand
★ Sales & Marketing
YOUR PRODUCT OR SERVICE
I write quite a lot on themillionairetradesman.com of how im- portant it is for you to specialise if you want to make good money. There are much too large a number of guys operating in the construction industry all doing the same thing and slit- ting each others throats for business. It’s a race to the bottom.
Focusing on a particular skill or product within your trade is an excellent way of raising the impression of value in the minds of your buyer. What’s rare is wonderful, and what’s wonderful people will pay more for. If you can find a niche in your area of expertise and focus on it, you can command a higher rate for your services.
A SPECIALIST PRODU CT
Finding a specialist product and negotiating an arrangement with the manufacturer that gives you preferred, or even sole installation rights is a good move. It will need quite a little bit of research of the market by you, and a few trips to interna- tional trade shows to find the right product.
If you decide to go this road, then it will be a real test for you. It means adopting the businessman mindset and a significant level of determination to make it work. Bringing a new prod- uct to the industry is difficult because there is no trust and no familiarity amongst buyers with new products.
There is no “taking a punt” on this. You must be absolutely cer- tain about the products viability.
A SPECIALIST SER V I CE
Specialising at a particular skill and using products already es- tablished, recognised and supported is a sensible move for most guys. Here’s a few ideas of what some tradesmen can spe- cialise in; Carpenter/Cabinet Maker Make expensive bespoke pieces of furniture- Express your trade as an art form. Don’t tell me there’s not a market for ex- pensive stuff. The world is full of people who spend a lot of money on things to make them stand out from the rest of the pack. You just need to find where they hang out.
Electrician
Specialise in Testing & Inspection for large contractors. Large Electrical Contractors are always in need of this service. The guys who run and manage these companies have a great need for a specialist who can properly test an installation. If you go this road of specialisation you will be set at a significant level of advantage and can command a high fee.
Plumber
Choose installation of high value water filtration systems. As with the cabinet maker above, you are basically taking a high value item and selling your skills of installation to people who can afford it. If your potential customer is looking seriously at shelling out 5k to 10k to filter their water, then you can do well by installing them.
Roofer
Look into installation of expensive high spec roof coverings. There are roof coverings out there that are being marketed and sold to specifiers who need competent installers to fit for their clients. These roof coverings command a high price and you can make a margin on the product and a good installation rate with adequate training.
THE 80/20 RUL E
You know this one right? The 80/20 rule says that we get 80% of our results from 20% of our activities. Brian Tracy (The Business Guru) loves this rule, you should check him out. He says that if you have 10 things to do in your day and 2 of them will earn you the most money, then you must do those 2 things and nothing else.
Specialising is a no brainer, but most guys are afraid to be- cause they think there will not be enough work. So rather than go for the 20% of activities that will give them 80% of their profits, they struggle to fit everyone in and wind up with huge headaches and a small bank balance.
TOOL TIP - REMEMB ER THE 80/20 RUL E
Get a bunch of Post-it notes and write “Remember the 80/
20 Rule” on them. Post the all over the place so you’ll see them everywhere. This needs to become stuck in your mind. If you do anything, remember this.
YOUR TIM E IS FIN ITE
All tradesmen and women are in the business of providing physical services. There is only a given number of hours in the day where you can earn your income, so one of two things needs to happen for you;
1. Charge a high rate for your service to a market that will pay it.
2. Sell the same as everyone else and scale things up. Utilise the skills of others in other words.
I tried no #2 for many years and it broke my heart. I found it so difficult to make it work given the level of attention re- quired to so many staff, at so many sites, making you so little margin. In my opinion, scrambling around with every other tradesman trying to make a profit in a very competitive mar- ket is not worth the effort. I would like to convince you from the above argument that specialisation is the way to go. It’s the 80/20 rule.
YOUR CUSTOMER
Sitting right next to your chosen product/service is your cus- tomer. When you choose your product/service you are choos- ing a range of customers. As I pointed out in the last section; What’s rare is wonderful, and what’s wonderful people will pay more for. When you choose your product (Lets just use product from now on to mean product or service okey-dokey), you are narrowing your customer base.
CUST OMER PROFILE
This is marketing speak for “what your customer looks like.” Compile a picture of who your customer is, in as much detail as possible. Let’s assume you choose the construction industry as your market. Ask yourself the following;
Is your customer in design or Installation?
What’s their primary business area (Government etc)? What’s the size of their turnover each year?
What do they usually spend on your service? How many times a year do they buy?
Have they a good reputation?
What pain do they have and how can you cure it?
With your service in mind, what’s most important to them? Who serves them at the moment and can you do better? What business groups are they a part of?
Who do you know who might know them?
Bring as much detail as you can to the description and if you don’t have all the detail now, then that’s OK. Take your time to build the profile of your perfect customer and go after them, and only them. Others may come to you for other serv- ices and you may choose to do that work also, but FOCUS your attention on your perfect customer. Become an expert at serving these people and you will develop a strong brand.
My advice for anyone in the construction industry with special- ist services is to focus on architects and consultant engineers.
If you provide a specialist service then you can be nominated in the design specification which can mean continued refer- rals and opportunity to apply a higher rate.
THE POW ER OF FOCUS
When you take a magnifying glass and focus the rays of the sun on a sheet of paper, the concentration of the sun’s rays ignite the paper. Your attention and focus on a particular customer has the same effect. Yes, the sun goes behind the clouds sometimes but it always comes back out.
If you wish to stand out from the crowd, if you wish to make real money as a tradesman in business, then you simply must focus on one market and one customer type within that mar- ket. You will by virtue of your perceived expertise, attract to you other business. It’s not like you are saying no to every- thing else, you are simply choosing where to apply your focus.
TOOL TIP - DON ’T LOOSE SIG HT OF THE GOAL
Remember, revisit you business dream as you’ve written it every day at least twice. Refine it as necessary. It’s easy to become overwhelemd but if the why is big enough, the how’s will look after themsleves.
YOUR PRICING
Now we come to price. The area almost every tradesman who ever became self employed has the biggest difficulty with. “How do I set my price? I can surely not charge any more that everyone else charges right?”- Wrong.
If you are doing the same work as everyone else, how can you possibly charge a premium? You can not! Only if you special- ise can you make more money. I can hear the complaints – “but I can’t ask for more, that’s the going rate!” Yes, that’s the going rate alright, at the bottom of the rate ladder. You must get up the ladder! Don’t demand your right to charge as little as possible.
You must do it, It’s as simple as that, you must set a higher rate than the standard. If you can not raise your self worth to a level that allows you charge 20%, 30%, 40% more than “the going rate” then you are destined to remain a tradesman who makes merely a wage, until your dying day.
You will continue to scrape by making a low income and feel- ing all those financial pressures you’ve always felt. You’ll con- tinue to ask why you can not make money like that other guy over there. You’ll take on those jobs for little margin risking heavy losses on the back of delays or other problems on site.
Setting a rate higher than the standard is about making a shift in consciousness. It is you declaring to the world; “Here’s what I’m worth”. And guess what? When you take this posi- tion and set your rate higher than everyone else in total belief of your worth, then that’s what the world will pay you. Do it with conviction and you will see I’m right. Do it without belief and you will prove yourself right.
STARTING OUT
If you are only starting out, please don’t get caught in this trap. Many many guys who have come before you, including your’s truly, have fallen for “the going rate” trap.
So here’s what to do; make a few calls, ask a few friends in the business, contact your local trade organisation, and ask them all what the going rate is. Then add 30%. That’s your rate.
But you’ve got to believe it. It’s no good asking for €75 per hour if you believe your only worth €50. You’ll be broken down. This is where the work on yourself, the affirmations, the marketing job you did on yourself in Step #1 comes into play.
Your specialised field of expertise, coupled with your higher than normal rate will mean you are set up to make a profit.
A STORY ABOU T RATES
I was once engaged by a property owner to repair a fire alarm system in a block of flats (apartments) in Dublin. I wasn’t on the tools at this time, I got my guys in to carry out the work. Before hand I gave the guy a price whereby I could make good money and he awarded me the job.
All good so far. During the job he asked if we could do general electrical work, and I said “yes, we are Registered Contrac– tors”. So without revisiting the quote (mistake #2, mistake #1 was not turning down the work. I should have trusted my gut!) and with the intention of charging him the same rate as I charged him for the Fire Alarm works, we went ahead and did the small piece of work.
My guys documented their time as per usual using day-work- sheets, and I totaled the work. It came to about €500.00. Now the trouble started. Although I had charged him the same rates and was able to produce back up documents that de- tailed the work, he was totally unwilling to pay the bill. “You’re charging me too much” he said.
It subsequently materialised after lengthy attempts to get paid, that he up to recently, had hired unregistered electri- cians to carry out work on these and other blocks of flats for very small money (hence the crappy workmanship that caused the problems initially). He had a low intrinsic value placed on the work of electricians, but he could accept paying the rates I was charging for Fire Alarm works because, as he put it him- self “It is a specialised field.”
You can’t account for peoples perceptions of value, you simply must filter out the ones with low values.
TOOL TIP - SET YOUR RATE & STICK TO IT .
Find people who place a high intrinsic value on the work you have chosen to do. Specialise, set your rate and stick to it.
YOUR BRAND
Your brand is vital to becoming recognised as a specialist. I happen to believe deciding to specialise enables you to de- velop a strong brand almost by default. It does need work on logos and artwork etc, but fundamentally, your brand will be built on your ability to specialise in your chosen field of exper- tise. Artwork, website, logos, etc will come as a result of your focus.
I love branding. It’s a fascinating subject to me. Branding is almost like a language unto itself. It speaks silently to your audience and tells them all about you. You display your brand every moment of the day, in how you walk, how you do your work, how you communicate with the people you meet in your line of work.
Your staff communicate your brand too, they are part of your brand, they are a reflection of you. I’ll go back to Chapter #1 again; Everything you do is a reflection of you, of your inner state, that’s why you must create you first.
All the work you have covered so far in this book has been about branding. You are declaring to the world “This is who I am, would you like to be a part of it?” Branding is a psycho- logical exercise, and you are building yourself from the inside out.
When you build a brand that is recognised for providing spe- cific value to a given audience, you are building your bank ac- count. Others will sit up and take notice and if you build your brand significantly enough, you may attract a buyer who will be willing to part with cash for what you’ve got.
I should say here that you mustn't become too attached to your brand. It’s your creation, that’s right, but if you allow it, it will consume you and all the good work you’ve done. The greatest of men (and women, but mostly men), have fallen down from the heights of their own creation. Too much self identification in a business can blind you to certain realities that may be staring you in the face. Beware your Ego!
PHYSICAL BRANDING
I’m not going to get into the technicalities of creating artwork and all that jazz. If you can find your way around Photoshop or some other application and create your own then great, but if you want to do it right, appear professional, and create a con- sistent message through your website, business cards, vehi- cles, paperwork etc, then hire a graphic designer.
There are loads of online resources such as Logonerds for this type of thing. Check them out, get a sample of their work, get your artwork done the way you want it and start broadcasting your message.
TOOL TIP - BEW AR E THE EGO .
Don’t be afraid to let go of your business if the time comes. It’s only an expression of you, and if you did it once you can do it over and over again. The joy is in the creation.
SALES & MARKETING
Your Sales and Marketing message is your voice declaring what it is you do. You can be either structured and deliberate about your message or unintentional and unplanned.
If you do not appreciate the power of a definitely planned mes- sage, then you’ll be swallowed up by all the other voices out there in the construction industry. It doesn’t matter if you are a small contractor or large, a structured sales and marketing message will be the difference between you and everyone else.
Lots of guys are scared away from sales and marketing, and I understand this. It’s difficult to understand if you have not been exposed to the benefits. But fear not, this doesn’t have to be complicated. Entire volumes have been devoted to Sales & Marketing, so go read them for finer detail. For now here’s a few things you can do in both the areas to get you started;
SALES
Without sales you have no business. What you do to generate sales is up to you, but you need to be consistent and persistent about it. Tradesmen have plenty to do operationally during the week, but if you can put a couple of hours aside twice a week you will see benefits.
After choosing your ideal customer (in the earlier in this sec- tion) decide to go after them on a consistent basis. Go online and get their contact details. Call them and get the name of a senior person responsible for placing orders in your area of business. Alternatively, ask someone like your accountant if they know anyone in that organisation. Chances are they’ll know someone who knows someone and you’ll get a lead in the door. Tell the guy (or girl) that you’d like to do business with them and ask what you need to do to get on their list of approved vendors. It really should be that simple.
If you can’t get to speak to them, get their email and send them a message. Tell them you’d like to do business, ask them for an opportunity. Don't beat around the bush, be direct. You will be respected for it, and when it comes to giving a price for works, they will know you mean business and you will be less likely to be beaten down on price.
Don't take maybe or no for an answer. Go back in a couple of weeks later and ask again. Fear of rejection is the only thing that will keep you from getting the business. They will smell your fear and look right past you.
MY PER SONAL EXP ER I ENCE
I did a small job for the MD of Sisk Group the longest est. and most successful building contractors in Ireland and UK, through a relationship I had with one of the Sisk Group com- panies. It was an AV job and was in his own home in Dublin.
Two years later I thought of him and decided to call him. There’s no way he’d remember me as we only met briefly but I had his phone number, so I called him. There was Zero beat- ing around the bush. I reminded him of where we met and I straight out told him I wanted to work for Sisk. He gave me a name of one of his people and I was shortly thereafter awarded a nice domestic rewire for one of their directors.
Before I called him I was planking it, but I rang him anyway. I ignored the negative voices in my head telling me I’d look stu- pid, did it anyway and got the result I wanted. You must do the same.
Sales is an area where those with the toughest skin, those most insulated from the harsh words of their prospects, will do the best. I don’t accept that we are merely Tradesmen, that we are not Salesmen. We are all in sales, we sell ourselves every second of the day whether we realise it or not.
TOOL TIP - D