So Goes the First Quarter, So Goes the Rest of the Year
authors Scott Siegal
It’s a common saying in our industry and one not to take lightly. If your company suffers a bad first quarter, you’ll spend the rest of the year digging your way out. It’s almost like the song, “Once in a Lifetime,” by the Talking Heads. The one where the lead vocalist sings: “And you may find yourself in a beautiful house, with a beautiful wife, and you may ask yourself: How did I get here?” But instead of the nice house and attractive wife, you may find yourself with too few leads and too many expenses, wondering, Oh geez, how did I get here?
The answer, of course, is pretty straightforward—you didn’t prepare correctly. If you don’t build enough momentum in the last few months of the year to carry you past the holiday season and through the heart of winter, you’re in for a pretty tough time. That’s why it’s incredibly important not to grow complacent as the fourth quarter winds down.
So instead of stressing out over how to get things going anytime in the first quarter, start your planning in advance. Here are three pieces of advice to help you survive the holiday hangover and set yourself up for a successful first quarter.
Hit the Gas, Not the Breaks
Motivate your sales force in the fall to develop more leads, bring in more projects and develop a strong backlog of business that can sustain your company throughout the winter. To do this, look at your goals for the year and see if you can raise the bar. If your goal was $250,000 for January, increase it to $350,000 and incentivize your salesforce to bring in the work to get it done. Marketing can help with your sales efforts too. Leads are hard to come by in the holiday season, so advertise your products and services early and often to get ahead of the curve.
What Is Old Is New Again
Most companies constantly focus on developing new leads. While there isn’t anything wrong with new customers, this can sometimes be a nearsighted approach to improving your overall sales. A key alternative to this is taking advantage of the leads you’ve already established. Most companies don’t rehash their existing leads, and this can prove to be a big mistake.
It’s the same principle as re-marketing, where websites will attempt to target you and reconnect with you about a previous product that you expressed an interest in. If you were looking at a grill on Weber’s website, you might suddenly start getting emails or banner ads about the Spirit II E-310 or the benefits of charcoal versus propane. Now, major retailers have figured out the importance of re-marketing. So why don’t we take a page from their playbook?
Focus on the leads where you came near to making a sale and re-examine the factors that prevented you from closing. See if enough time has gone by for you to reconnect with these former customers and start a new conversation. It’s a whole lot cheaper to rekindle old leads than to find brand new ones, and there’s plenty of untapped value in doing so. Exploring unfinished leads could be the one tactic that salvages your winter, gives you a lucrative Q1 and sets you up for a profitable year.
It’s also as simple as keeping track of what people are looking for. Did a former customer install new windows in half of their house? Maybe they’re ready to do the other side. Communicate to them that this is the best time for an installation, when contract work is slow. Also be sure to stay top of mind. Contact these leads throughout the year, not just when you want them to buy. And above all else, provide them with information about how your projects can uniquely be of value to their homes, based upon the information you have previously gathered.
Take Stock and Make Your Adjustments
When it comes to recalibrating and setting up a business plan for the rest of the year, the first thing you need to do is figure out where you’ve been. What had happened the past year financially? Where did you win? Where did you lose? Is there any waste in your business? You need to roll up your sleeves and really get to know your financials. Most people don’t have a great insight into all of their costs. You have to look over everything and figure out what you’ve spent.
First you have your direct costs first—these are what you need to spend to perform work. Most companies will find that there isn’t a whole lot of wiggle room to adjust their direct costs. Labor costs have been tough throughout the industry. It’s been hard to find new people, and what that’s done is put pressure on prices, and labor costs have risen as a result. So can’t do anything there. Materials? You can only save so much on materials.
After you’ve examined your direct costs, next you need to consider your overhead. This is where you might have your best shot at cutting costs. It is in your power to negotiate the price of expenses like rent and services like insurance. By keeping a handle on the costs necessary to run a business, you can help make your company more profitable. After freeing up some capital, you can always consider reinvesting in your company by hiring more salespeople. A strong sales team can help you win projects at higher prices, helping you close the gap to make quota and achieve your goals.
In summary, prepare to start next year with a bang. Help your company build momentum by filling out your backlog, explore old leads as a way to close new sales, and take a hard look at your company’s spending habits to see where you can save. Then reinvest those savings in your company by adding to the sales team. These are just a few of our strategies to help your business put its best foot forward in 2020. QR
Scott Siegal is owner of Maggio Roofing in Washington, D.C., and also owns the Certified Contractors Network. You can learn more about CCN by going to the website contractors.net.