Q:
I am too busy doing everything myself to come to your two-day boot camp. I have a small one-person business I want to get going. What else would you recommend?
Paul House, Owner
Ready Electrical
A:
What is the key to growing any business? The first clue: you can't make any money until you get some money coming in the door. Therefore, the first step is to get some business. Invest whatever you have into your brand, image and marketing. Get a professional website. Get placed in yellowpages.com. Paint your truck to match your logo, shirts, hat, letterhead and business cards. Get some postcards printed and start mailing them out to potential clients (at least five per day). Start a referral program for your customers, and offer them an incentive to refer your work. Spend at least two hours every day pounding the pavement, knocking on doors and looking for work. Then, when your phone is ringing off the hook, go out and do one heck of a job to make your customers happy.
Q:
I am now finding it hard to maintain good cash flow. Between getting paid on time to super late payments, it has been tough. I don't come from money and have never been able to sit down with a bank that was actually interested in affording me a loan, a line of credit or even overdraft protection. I own a company that does more then $2 million with a profit margin. However, no bank will talk to me. Being bondable is impossible, too. Everything has been financed through me and the company.
Our work is divided between different types of development from government to private developers to residential homes. However, it seems that everyone has problems paying. My sales are great and my estimating and project management are constantly getting better. However, I can't seem to get ahead. When we eventually do get paid, we are so far behind that we get nowhere. Our lawyers are good. But this all takes time.
What do you suggest?
Joe Michael
Eastern Greenscapes
A:
Attracting a bank or bonding company to give you credit is like bidding to win lots of jobs. One bid to one customer won't cut it. It takes lots of time and effort to find the right bank and bonding company. You will need to make a presentation binder of your company's strengths to present to potential banks and sureties. The business plan and portfolio must include the past three years' tax returns (you said you were profitable), the current and last year's financial statement, a list of your past and current jobs (showing the financial results for each job), an organizational chart, customer and reference lists, photos of finished jobs and an inventory list of your equipment. The goal is to have a selling tool to show off your professionalism. Next, make a list of ten people who can refer you to the right banker and bonding agent. Ask your competitors, builder's association, contractor friends, insurance agents, etc., for referrals. Once you have a list of twenty targets, go see them and present your company. If you are willing to put in the work, you will succeed. Good luck!
Q:
I was interviewed and hired by a man who owns a company that builds large multi-million dollar homes. He was looking for someone to take over his job and run the company. However, I can't get him to let go of the reins and let me do my job. After reading your books and several articles, I am wondering if you could give me some help with this. Any information that you could give me would be great.
James Vector
President, Valley Homes
A:
Wow, what a surprise-95 percent of small business owners are control freaks and never let go of the reins. As a result, they stay stuck and don't grow beyond their level of control. I suggest you meet with him and come to an understanding of what he wants you to do and what he wants to continue doing. Also discuss what decisions he wants you to make without his knowledge or input. Make a list of these things. Perhaps he will loosen the grip over time as he begins to trust your judgment. Remember, he probably won't change much, so you can either get used to it and keep the paychecks coming in, or start looking for another job. In this economy, I'd say keep the job!
Construction Business Owner, March 2010
