[Podcast] Episode 15: How to be More Profitable with Dave Yoho

Your contracting business generates an income but how much of that do you keep as profit? And, what if you could keep even more profit in your pocket?

There’s one EXPERT you need to hear. When it comes to profit, Dave Yoho has a ton of insight to share. At the age of 28, Dave founded a home improvement company; by the 1970’s he had grown it into the largest home improvement company in the US. Today, Dave is a widely sought-after author, speaker, and expert on home improvement companies.

I can’t wait for you to hear Dave’s insight on the newest episode of The Wealthy Contractor Podcast™.

In this episode, you’ll hear Dave’s best strategies to keep more money as profit this year. You can even start implementing his strategies right away!

Plus, he’ll share with you how much profit you should be keeping in your business!

How to Sell at Prices Higher than Your Competition and Still Get More Leads for Your Contracting Business

One of the most obvious ways to grow your profits is to raise your prices.

However, if you simply raise your prices without adding value, you’re not only cheating your customers, you’re ruining your reputation.

Therefore, the most ethical and business-savvy way to raise your prices is to add value so your customer gets MORE for their money… while you end up with more profit to grow your contractor business.

Check out the following ways to build value into your customer experience so you can sell at prices higher than your competition and still generate more leads for your contracting business.  

Product:  Close More Sales for Your Contracting Business

You’re likely selling a great product – most companies are. But have your reevaluated your product selection recently? Meet with suppliers and ask your sales team about the feedback they receive from customers. Now is a great time to make sure you’re offering a premium product.

And what’s more important – how are you presenting that product? Do you have the best sales materials so they’re presented in the best light to your prospective customers? Ensure that all of the features and benefits of your products are clearly communicated to your potential customers and that all of your salespeople are well-trained and well-versed on how to present them. After all, it doesn’t matter if you have the best product in the industry if your customers don’t know that.

How Your People Can Help You Close more sales for your Contractor Business

One of the greatest ways in which you can differentiate yourself from your competition is your people. Sure, your competition might be selling the same kind of roof/bathroom/kitchen materials as you, but they don’t have your friendly receptionist, your detail-oriented project manager, your expertly-trained installers, etc.

If you’re feeling a little inadequate in this department, it might be time to make some changes. Evaluate which of your team members are capable of elevating their level of service so you can charge higher prices. For those who aren’t there yet, they may simply need some additional training; others may need to be replaced with a new team member. In the end, your team can make or break a customer’s experience with your company, so you MUST make sure they’re highly trained and customer-focused.

Processes to Help Grow Your Contractor Business

The ultimate way to earn the right to charge higher prices is to build, implement and quality-check your processes. From answering the phones, to the sales process, to installation and following up after the job is complete – all of these actions should follow a very detailed, highly engineered process.

To get started, go through your business from start to finish as if you were the customer. Call in, observe and/or participate in a sales presentation, a job installation and post-job follow-up. You can also ask past customers for their feedback. Where are there holes in your customer experience? Make sure that you are “wowing” your customers every step of the way.

By increasing the value your customers receive, you will not only earn the right to increase your prices, you will earn customers for life™. For more insights on how to take your business to the next level, click here to request your free, no-obligation strategy session with our team today.

 

Not Understanding How to Classify PROFIT Will Stop You From Becoming a Wealthy Contractor

I have been on the “inside” of hundreds of home improvement businesses, and I know that many – if not most – are not making anywhere near the kind of money they should be making.

For the amount of work and risk you take on being in a home improvement business, not only do I believe you are entitled to MINIMUM NET PROFIT of 10%, I also believe you are setting yourself up for trouble if you are making anything less than that. (NOTE: You are obviously only entitled to profit if you are providing real value, confidence and peace-of-mind for your customers, your team and your community.)

Why Profit to Grow Your Home Improvement Business?

You see, PROFIT is the fuel of your business. Without profit, not only does your family not eat… but, you don’t have the resources you need to grow your home improvement business. Sure, you can go out and borrow money to grow your contractor business, but many of us have learned the hard and painful way how bad debt can be.

When I started in business I kept a close eye on my profit numbers; I got excited when I made money. I had a little bit of debt, but it was very manageable. I used the profit my business earned to buy more trucks, hire more people, do more advertising. I even used my profits to start a new, complementary business. Everything was going fairly well until I put my eye on growth-at-any-cost versus calculated growth through strong profitability. I took on more debt than I should have. I risked our savings, our home and our livelihood. It was a gamble pure and simple, and I busted. Needless to say, I’ll never do that again.

REAL Profit = NET Profit

As I’ve said before, the purpose of The Wealthy Contractor Program is to help you build a successful, sustainable and profitable business so you can build real wealth for you and your family.

In order for your business to be successful, sustainable and profitable, we must first be very clear about NET profit. Net profit is what is left after everything and everyone has been paid. Obviously the goal of your business should be to earn a healthy profit. If it’s not… you probably shouldn’t be in business for yourself.

One big problem I see is that many contractors aren’t clear about what NET profit actually is. This article is by no means an accounting course, but here is a simplified way to determine NET profit:

COMPANY XYZ

$100,000 Income

-$50,000 COGS (Material, labor and sales commission)

-$40,000 Overhead (Office expenses, salaries, advertising, rent, insurance, etc.)

Net Profit = $10,000

Pay Yourself, You Deserve It

Now, just to be clear, if you work in your business in ANY capacity, salesperson, sales manager, general manager, installer… anything, your net profit is the number AFTER you have paid yourself a reasonable salary and/or commission for the job(s) you do in your business. Too many contractors mistakenly think they are making money when they really just have a job.

For example, I recently asked the owner of a $2 million dollar company how much his business made last year; the conversation went like this…

HIM: “about $150,000.”

ME: OK, I said, how much of the $2 million were you responsible for selling?

HIM: “About $1million”

ME: Did you pay yourself a $100,000 in commissions?

HIM: Yes.

ME: Was that part of the $150,000 you claim as profit?
HIM: Yes.

ME: Did you pay yourself a reasonable salary for being the general manager of your business?

HIM: That’s part of the $150,000.

ME: So, I hate to be the bearer of bad news but, your business made ZERO money last year. In fact you have a $350,000 problem in your business.

As you can imagine, at first he wasn’t very happy with me.

However, to his credit he also realized what I pointed out. You see, the reason the business made no money is because if he had to pay a salesperson to run his leads (which he should be doing by the way, but that is for another day), he would have had to pay them about $100,000, which would leave him with a “profit” of $50,000. But wait… he is also the general manager of the business and he deserves a salary for that also.

So, in the end, he has a $350,000 problem ($100,000 sales commission + $50,000 manager’s salary + $200,000 profit). Now, there are a number of strategies for fixing this problem, and over the next couple of months we’ll dive deeper into this topic.

For right now, make sure your business is set up TODAY to make a profit… at least 10%. Doesn’t matter how much sales volume you did last month, at the end of the month make sure you have at least 10% left over.

Remember, your business exists to serve YOU and your family first; the only way it can do that is if it produces a profit. So, take some time now to examine your NET profit and ask yourself – am I producing enough profit to become a Wealthy Contractor?

Could your business use a strategy to grow your business more profitably? Our team at gFour Marketing Group can help you create, keep and multiply your customers AND your profits. To request your free strategy session today, click here.

[Podcast] Episode 10: Lift Your Prices, Profits & Knowledge with Arry Housh

 

When you think of the ultimate “Wealthy Contractor”, one of the names that should immediately come to mind is Arry Housh of Arry’s Roofing Services in Tampa.

He’s a smart business owner who built his multi-million-dollar roofing business from the ground up and did it the right way – by providing his customers with the absolute best service possible.

On top of that, Arry is a great family man who is always there for his friends and his community – including all of us in the home improvement community…

Which is one of the reasons why he joined us for The Wealthy Contractor Podcast™ – to share some of the wisdom he’s gained during his 37 years in the roofing business with fellow contractors so that YOU can avoid some of the pitfalls in the industry and reach YOUR highest level of success.

You’re going to love this episode because it has some solid business insights regarding pricing AND some tips on how to grow as an individual and a business owner.