Clearview National February 2019 - Issue 207 | Page 70

INSTALLERSUPPORT
Thirsty for more?
Five ways to invest for growth
while controlling costs
Installer businesses can generate decent returns.
However, not many of us would say no to making
a bit more. Benjamin Dyer of Powered Now
examines five ideas for growing your business while
at the same time seeing cost kept in check…
» » TALKING TO PEOPLE RUNNING
trade businesses is nearly always enlightening.
I must be honest and admit that virtually all of
the ideas in this article come from people that
run installer and other trade companies. So,
I hope that they will forgive me for ‘stealing’
their ideas. Many bosses of successful trade
businesses have great tips to share and I am glad
to try and be the conduit for some of them.
WIN MORE PROFITABLE QUOTES
You can grow your business in two main
ways – by winning more work and by charging
higher prices. We will look at both of these…
Deciding on the price to quote is difficult.
Get your prices too low and you can win
lots of business, but then it turns out to be
unprofitable. Make your quotes too rich and
you don’t win enough. In the worst case, where
you are poor at estimating and get your prices
both too high or too low, you only win the
unprofitable business.
This is why tracking costs against your
estimates over time is a good discipline. If you
do this you can gradually improve the accuracy
of your quotes. One of my relatives runs a
garden landscaping firm and he was telling me
that virtually all of his employees used to run
their own businesses. They are good at the job,
but none of them were any good at estimating,
so they barely scraped a living.
The other trap to watch out for when doing
fixed price quotations is that you shouldn’t
take any unreasonable risks. Gas engineer
John McLaughlan has this advice: “Suppose
the customer wants a boiler in an out-house,
because it’s not wanted in the kitchen. But
when I drill the wall, I find it is not stable. I
then have to give them the choice of either
putting in a new wall or moving the boiler to
the kitchen. That’s why on my quotes I always
70 » F EB 2019 » CL EARVI E W- UK . C O M
say: ‘Subject to no significant discoveries that
could not have reasonably been anticipated’.”
Time spent on making quotations look
professional is also a good investment. A
system can help, which I talk about below. But
you can get many of the benefits just by using a
well-designed logo and nice layout.
Finally, concerning quotes, my own
company’s research has shown that one of the
biggest frustrations for homeowners is trying
to get quotes from installers. As a result, if you
respond quickly to quotes you will be able
to win higher priced jobs. This is because you
will come across as more professional and
secondly you will often be the only bidder.
INCREASE PRICES
Undercharging for work is the single
biggest problem for installers running their
own businesses and can often lead to their
demise. Of course, I’m not suggesting that you
overcharge for bad work. But if you do a great
job, you should receive a decent reward.
A quick clue is that if no-one ever tells you
“that’s expensive”, then you are too cheap. It’s
easy to feel that cost is the only decider but
that is rarely the case. The Dacia Sanderos
costs under £7,000 new. So, everyone should
buy it, right? Wrong. The vast majority of
people buy on value not just on price and the
cheapest doesn’t work for them.
Charging a reasonable amount also means
you can show some flexibility. So small
insignificant changes can be absorbed into the
job leading to happier customers.
Customers never excuse short cuts because
you are the cheapest. So, if that’s your approach
you often end up with low income and angry
customers which is a bad combination.
Doing it the right way means you will get
more recommendations, which is how 70%
of domestic work is won. Recommendations
in turn sustain higher prices as you are much
more likely to be pitching for jobs with no
competition. It’s a virtuous circle.
It’s easy to feel that the only way to
compete is on price but quality nearly always
trumps price as a business approach.
KEEP MATERIAL COSTS DOWN
There is a simple word which explains how
to keep material costs down and that word is
planning. When jobs have been properly planned
you save costs in several ways. This includes
avoiding the team sitting around waiting. Materials
are always to hand and wastage is minimised.
Doing all of your buying in advance will
usually mean that you can get keener prices
and credit from your trade account means
improved cashflow. Then there is the saving of
time and fuel. That comes from not needing to
drive to the nearest builder’s merchant to pick
up emergency supplies.
Finally, try not to leave anything valuable
or useful at the site. If I had a ladder for