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PressurePros

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Posts posted by PressurePros

  1. Posted · Edited by PressurePros · Report reply

    What if I told you the solution in a downed economy is to raise prices? What?? Do I have three heads? Here is why I say raise 'em. Advertising ROI is still predictable. If your close ratio falls in a downed economy, you need to compensate by increasing leads. (yes, you do need to know all of your numbers)

    Let me use some round numbers to keep things relatively simple. I'll also eliminate the other aspects factored in job acquisition cost.

    Before slowdown:

    Gross Sales: $100,000 (100 jobs at $1000 each)

    Advertising/Job Acquistion Cost: $10,000 ($100 per job)

    Job Leads: 200 of them (5% or $50 per job) Note: Job lead cost and job acquisition costs are two different numbers

    Sales Closing Ratio: 50%

    During Slowdown (you are down 20%)

    Gross Sales: $80,000 (80 jobs at $1000 each)

    Advertising/Job Acquisition Cost: $10,000

    Leads: 200 (6.25% or $62.50 per job)

    Sales Closing Ratio: 40% (this is where you are down 20%)

    Solution

    • You have to make up $20,000 in sales. (20 more jobs)

    • To get 20 more jobs at your lower closing ratio, you need 50 more leads.

    • Factoring an average cost per lead of $56 you need to spend an additional $2,800 in advertising. I would up that number to $4000 to compensate for the possibility of less response on your advertising than you may have been used to.

    So now in 2010 you will gross $100,000 and spend 14% on advertising. That's 4% more than before the economic downturn. To keep your margins the same, you will need to raise your prices at least 4%. That $1000 job is now $1040. Someone that was going to hire you at $1000 is not going to not do so because of the extra $40.

    Note:

    If you are a motivated person and on your game, you would increase your low cost lead generation.. networking with business groups and orgs, call old customers, put out door hangers, etc.

  2. Posted · Report reply

    Jeff, that is one of the caveats of you sharing so much good information on these bulletin boards. Lots of leaches with no experience and no selling skills. "So I call, write, and fax, throw some bleach and Dawn together and that's all there is to it? If Jeff is getting $8,000 for a four day job, I only need to charge $3K. I don't have Jeff's overhead." I feel your pain.

  3. Posted · Report reply

    Just remember that customers buy products and services based solely on benefits to them. Think of ways owning a deck benefits a homeowner. A place for kids to be safe while mom is cooking, a gathering place for entertaining, an extension of living space, and added property value.

    Jut try to think what would catch your attention. I threw together a quick one to to get your ideas flowing.

    post-581-137772281335_thumb.jpg

  4. Posted · Report reply

    Nothing lasts forever - but I feel this is the best 'recipe' so far for wood restoration business. Now I am not going to argue with other crowds about the superior technical aspects of preserving wood like 100% parafinnic type stains. I am not talking about what is best for the wood itself, I am talking about the perfect comprimise of durability, looks, preservation value, customer satisfaction, ease of use, and general ability to systemize a high output business and maintain a loyal customer base.

    A perfect summation.

  5. Posted · Report reply

    Good advice above from Jim. Deck restoration is not pressure washing. Longer learning curve.

    I agree about the regional aspect of what to target. I often say that I could run a one line ad in the phone book that says "pressure washing" and 80% of my calls would still be for decks.

    I've also found that you get a better return if you separate services and run campaigns. If you want the best lead generator in today's market, build a website and work hard on the SEO to get it ranked. Use postcards to get people to your website by using effective calls to action. An example would be "Download a FREE report on How Roof Cleaning Can Cut Your Energy Bills." Maybe support that with "Find out how to your roof cleaned for FREE". I'm going to run a program next year offering a free roof cleaning to every 25th person that requests an estimate. The only rule is they have to keep up a yard sign for 30 days.

  7. Posted · Report reply

    I don't want to shoot down your aspirations to start a business. The issue that is staring us that have been in business for awhile is that you have too many of the criteria that cause failure. You've heard the expression "throwing good money after bad"? Here is the reality of what's going on with your business plan.

    1. You need insurance to do this work.

    2. Your market is notorious for low pricing.

    3. You don't know what you are doing.

    4. You are woefully undercapitalized. Yes, some have started on a shoestring budget, but I don't think anyone started with a Honda Civic as a vehicle.

    5. Even if you buy a super cheap homeowner grade machine and lift it in and out of your trunk/hatch, that doesn't mean anyone will hire you.

    6. You have no experience in business and as such you will not understand your numbers and probably way underprice your service.

    7. You have no way of generating leads other than to jump in the pool with the hundreds of guys that probably roam Miami with the same capital reserves. That means hand printed flyers and CraigsList for your job leads. You'd be lucky to make yourself $150/wk for 40+ hours of effort.

    Save your $500 and find a company from these boards and see if they are hiring helpers. Trust me on this, you'll make more money than if you try to start this thing on your own.

  10. Posted · Report reply

    The "Great Monsoon" was our biggest profit killer. Leads were up 20% or so with almost zero print advertising. I think I ran a classifieds ad for about a month and then pulled it. Dan, take this lesson with you through the remainder of your years. Economic slowdowns come and go. Flues come and go.. housing bubbles, market fluctuations, etc. Every one of those is always predicted to be the "worst one yet". In the end it is a natural ebb and flow cycle that repeats consistently. You already mentioned why a recession is a good thing for a business. It makes you tighten ship. Capitalism runs and corrects itself. That is why I remain in awe of it.

  14. Posted · Report reply

    Roberta please fill out your signature line though there is little doubt whom you represent. We are not opposed to intelligent presentation of facts. Through the years many products have been presented to wood professionals that had great science.. on paper. What the scientists and wood preservation experts fail to address is the aesthetics of the wood. The wood can be dimensionally stable 100%.. a fine feature. But homeowners also want their deck to look good.

    Please correct me if I am wrong. There is no pigment that is not sacrificial to UV. ie at some point the pigment will be history and the wood will turn gray. Many people can accept that in a fence.. not their deck though. One outstanding question with these types of products has been the ability to apply a pigmented sealer over them. If you have further data and evidence in the form of real world pictures of decks that have been both chemically petrified AND stained consistently with a pigmented product, that would go a long towards convincing wood professionals of the efficacy of the product.

  17. Posted · Report reply

    KISS Keep It Simple Stupid. As long as it is simple enough that people can remember it, thats all that matters. It is just one of many versions i am probably going to make. Any input is good input at this point.

    In marketing, KISS can make you spend a lot of money with no return. I agree about the original logo. It looks like it came from free software.

  18. Posted · Report reply

    I was making one last pass at the forums before bed. Michael, I'll be honest with you man to man.. as much as you can do that on a forum anyway.. I didn't really know what to think of you when you first came onto this forum. One thing I have come to like about you is your tenacity. That's just a fancy word for nothing really stops you or gets you down. You keep bouncing back. I've always admired that ina person. Its a trait of successful people. What you haven't had the oppotunity to experience is good business guidance. I was lucky. god put a couple of guys into my life at different times who were awesome mentors. So I guess what I am saying is there is hope for you after all (just playing with you).

    Down to your question.. It would take me the rest of the night and a few pages worth of what would end up sounding like a really boring book to answer it. Your making good progress on your own so far. I don't know what your future holds. You may be able to grasp the business end, you may not. As long as you stay open minded and keep reading..

    Get that e-myth book!

    .. you'll become a stronger business man. Pressure washing is easy.. learning how to keep a company afloat is the part that makes the difference. I will jump in on the forum when i can to help.

  19. Posted · Report reply

    Ken year 1: What would you do to stay afloat?

    A: Whatever it takes as long as it doesn't mean dropping price.

    So I painted, I worked for Comcast as a subcontractor, I stayed up at night reviewing my business plan, I added free upgrades that didn't dip too much into profit margin.

    Same question year 6 doing mostly residential work.

    A: I am exclusive as to who can be my customer.

    Tying that in to my post above. I need a humility tip. That's not to say I need to radically change my business model but after some reflection tonight, i need to work on my "attitude of gratitude" and get back some of that assertiveness that these new guys show. I have always said to get performance from someone, keep them hungry. I lost a little of that.

    Dan, you have been in the trades awhile. You too have lost it. Find that male pride and do what you have to do.

  21. Posted · Report reply

    Yep.. all said and done I am down about 15%.. all due to weather. I would have been down 30% but a few condo projects saved my behind. Now we have temps that are off average by 20+ degrees.. a fitting end I suppose. I still have three decks we haven't even touched yet and 6 house washes on the books. I think I got two calls the last 5 days. This is when I strongly dislike my residential dominated model.

    I was bidding jobs in May for post July 4th and people were not biting. The typical response was "we are ready to go with you but that is the middle of summer, I'm sorry". I could have had ten crews but Mother nature wins. I have to reevaluate this deck resto model. I didn't plan on a season like this. Its a big ouch. I will personally make $20,000 less salary this year. I don't make so much money that that amount doesn't hurt. I have to adjust my lifestyle a bit for winter. Not a great year to shut down RAD to regroup either. It is what it is. I tout the mantra about the strong surviving. I'm tasting that medicine. But, not crying, I'll be back in 2010 with a stronger business model.

    Hang in Dan. I wanted to share that with you so you know you are not alone.

  22. Posted · Edited by PressurePros · Report reply

    DeJay, don't take it personally. Of course you have to do good work. You can give someone a check for $1000 and if they weren't happy with the work and the experience of hiring your company, they won't refer anyone. That's why I asked you how long you have been in business (which you still did not answer). If you are getting referrals you have been in business for awhile. If you are a new guy and believe that your system will work for the majority of new business owners, you may be missing the big picture. the goal for any business is 100% referral work. It rarely works that way but hands down, referrals are the best leads. If you want to have a multi crewed company that stays busy primarily from referrals you have to be proactive. That's the only point of my post. I'm not sure why you got bothered by that.

    Ron runs a very large, very busy company with a high energy sales machine and has been in business what, Ron? 20 years? He also asks for the referral. Ron do you offer rewards for referrals?

    Rod went roundabout and detailed what makes a referral happen (thanks for adding that critical component.. I skipped that as I assumed it was a given) but he also mentioned that asking for the referral is part of the sales process.

  23. Posted · Report reply

    I do not buy into the "do good work and the referrals will come" mantra. It holds some truth with the pitfall being that it takes a good 3-5 years to really get rolling. You can jump start that with a modest program.

    I mentioned acquisition costs in another thread when determining your "gift". This is the real cost for you to get a customer. It factors in your advertising costs, estimating costs and closing rate. Certain formulas account for projected earnings over the life of a customer. I try not to make things more complicated. It costs me approximately $40 to attain a new customer. That's a static expense on every job. If a person eliminates me spending that much, my only cost is going to look at the job. This is why I give $35 as a reward for referrals.

    There are some other programs I have explored through the yearrs but have not implemented due to cost. I might revive one called "Pressure Points". Instead of getting cash, a customer will accumulate points. There is a company that has a website that customers can go to and use their points for high def TV's, Ipods, appliances etc. I like this better than giving cash because now it inspires a customer even more to create leads:

    "Hon we only need two, more referrals to get that 20" flat screen monitor. Who else do we know that could use pressure washing?"

    If anyone falls into the trap of believing that prior to year three you will get any types of referrals just by doing good work, you may be in for a rude awakening.

    Here is a summary article/review I put up about the importance of customer loyalty.

    Customer Service is Worthless.. Customer Loyalty is Priceless

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