Ask the Experts: Winning More Work

For owners of small to midsize construction firms, juggling all the responsibilities of owning and operating a business—such as accounting, estimating and scheduling—while trying to increase profits can be a daunting task. A member of CBO’s LinkedIn group asks the following question:

How do we get more leads and close more sales when we’re a small company that wears every hat?

Bobby Darnell Principal Construction Market Consultants Inc. “Companies without a full-time business development person must develop a reasonable plan and stick to it. There is a big difference between marketing, prospecting, sales and business development. I have found that proper prospecting is the most overlooked area when it comes to building new business for a company, and this can easily be done by anyone. Lead services are fine, but even the best ‘purchased lead’ is typically purchased by dozens of your competitors. Finding and developing your own leads organically must be at the top of your consideration.”

Terry Kramer, CMC President Kramer Management Consulting “If growth is sought, general contractors should first review the private and public customer lists that they have done business with in the past three years. They should weed through this customer list to decide who to keep. Customers with the right fit in terms of project types, project sizes and gross profit margins should be pursued in fiscal year 2014. It’s important to group customers by market segments (project types) to determine your focus. General contractors should add customers within market segments they have experience in. These customers can be pursued through a local book of lists that contains corporation lists, property management lists, architect lists and engineer lists, for example. Also, general contractors can pursue non-bid public sector job order contracting (JOC) work through a state-approved entity that requires qualifications for projects from zero to $1 million.”

Danny B. Parrish President Parrish Consulting Group “Smaller companies have to search for leads and opportunities everywhere on a 24/7 basis to keep the lead pipeline flowing. The function, let alone the process, of marketing and business development is every employee’s job in a small company, and if everyone learns to capitalize on the full extent of their entire circle of contacts—business, family, friends, etc.—more opportunities can be developed. Every contact, prior customer, vendor or subcontractor is a potential source of a lead, and most of those should be ‘warm’ referrals, which can facilitate the closure rate. Closure is almost always a function of the match between the customer’s needs and the contractor’s ability to respond to the four basic components: price, quality, schedule and complexity.”

Brad Spelbring, MA Founder Toolbelt Trainers LLC “The best way I know to generate more leads is to ask for them. If you did a good job for someone, ask them for three to five referrals. Everybody needs a good contractor. Almost any trade would be able to get more work this way. Then, do your due diligence and follow up these leads with a personal letter; it should be handwritten with your and the customers’ names. Place this in a handwritten addressed envelope with a stamp on it, and include one of your brochures in it. This works a lot better than an email.”

Doug Phelps Founder Management Consultants for Contractors “Your company is at a crossroads. Try determining the percentage of time you spend on the various tasks. Which tasks could be handled by a part-time person to enable you to devote more time to marketing and selling? Can’t afford one? What if that part-time person costs you $500 per month and, with the additional freed up time, you are able to sell an additional $15,000 of work per month with a 20 percent gross profit? Would investing another $500 in overhead expenses that will potentially net an additional $2,500 ($3,000 minus $500) of gross profit per month make sense? Failure to use this logic hampers many from growing their company.”