Adventures with lyrical - buying a business
- Thread starter Shonuff
- Start date
-
Guest, it's time once again for the massively important and exciting FoH Asshat Tournament!
Go here and give us your nominations!Who's been the biggest Asshat in the last year? Give us your worst ones!
Shonuff
Mr. Poopybutthole
- 5,538
- 791
I might try the billboard idea. Also, your point is well taken on the cost of billboard vs. radio, I"m just not sure which station would hit my best demographic (hh income of 45k or more and home owner). I"ll spend a minimum of 4k on a billboard for a three month contract (including design and material), and I might only spend 10% of that on a test radio ad campaign.Evelys said:
Shonuff
Mr. Poopybutthole
- 5,538
- 791
I"ll look into NPS. I"d hazard its high, we have a ton of customers who have used the company for two or three decades, and most of our business comes from repeat or referral. There was a day in the last month where every customer call was a referral.prescient63 said:
And as far as pricing goes, our wealthier customers don"t care about paying more, but they want us to be fully insured, and they want the job done quick. An example of that would be a customer in the area"s most prestigious gated community. He flat out said don"t care about price, charge me whatever, but I want this done quick. Rich people don"t wait for things, you can"t keep their job on schedule for two weeks before you get to it, they"ll have someone else do it.
The thing is, we practice price discrimination (not from a negative connotation, but from an economic standpoint). The guy who owns part of a sports team and has thousands of acres on his estate for sure is going to get charged more than the elderly lady who called this morning and is on social security. Its basic microeconomic theory applied to actually make sense in the real world. Try to charge people what they can afford and don"t mind paying. The guy who lives in a 10k sq ft mansion doesn"t care about an extra 20-25%.
Shonuff
Mr. Poopybutthole
- 5,538
- 791
Thanks for the input.
Its all a numbers game. I know that if I get five calls a day, the company makes money (any one call can be for $300, or up to 100k). Sometimes, I feel like a genius, like today. Eight calls came in the first hour of business today. We"ll close 50-60% of everyone who calls, so the more calls we get, the more profitable we are. The laborers are great and do the job right, so really, the number one stat is the daily calls for estimates. Everything else usually remains constant (other than the rising gas prices, not good when you have a fleet).
Its all a numbers game. I know that if I get five calls a day, the company makes money (any one call can be for $300, or up to 100k). Sometimes, I feel like a genius, like today. Eight calls came in the first hour of business today. We"ll close 50-60% of everyone who calls, so the more calls we get, the more profitable we are. The laborers are great and do the job right, so really, the number one stat is the daily calls for estimates. Everything else usually remains constant (other than the rising gas prices, not good when you have a fleet).
Shonuff
Mr. Poopybutthole
- 5,538
- 791
1- In the last year, I"ve interviewed people who wanted a spot as a laborer. Five of them have been business owners as competitors. I don"t take it for granted that we are still in business, and am thankful. The common denominator has been they were doing well, the economy hit them hard, and then the phone stopped ringing. I"ve definitely learned the importance of having working capital and being an owner. My competitors are out partying, buying hookers, and doing blow, and then going under. I know its a hackneyed statement, but working capital is the lifeblood of any business.Kais[] said:
2- One thing I"ve gleaned from my competitors is that calls have dropped, and alot of it is self inflicted. They cut their advertising, while I increased mine, and this is a reason we are up 50%. I figure we do about 10% of the homes in the area, and I want to increase this. A sound strategy is when your competitors retreat, you expand. Its like when I ran cross country as a kid, everyone slows down when going up a hill, you can catch them by surprise and get a sizable lead by not slowing down, but speeding up at the sight of that big hill.
I look at the recession as an opportunity to pick up market share, and most of it will be repeat business. Very few businesses reach one million in sales annually (like 5% ever get there). The closest we"ve got is 800k in service dollars. This year seems like we are running hot so far, and I may need to hire some more people, or lose customers that get impatient by waiting.
The only negative right now is gas prices. Last month, 3k of profits went to fuelling the trucks. That"s 3k that would have gone in my pocket. That"s about 15% of the company"s profits that went to just moving heavy equipment from job-to-job, and no I"m not going to be a tool and sneak in a gas surcharge on the invoices and hope they don"t notice it.
Like I said in my post, you"re far more likely to hit affluent customers on news talk radio and sports radio. Listeners of both trend older, are more likely to own a home, and have disposable income, and are far more likely to work in a professional setting, which makes them more likely to have your target or better income. Those two types of radio and top 40 are the most likely to be on at a work place, and top 40 gets too many younger listeners to be as finely targeted as the other two types.Lyrical said:
It"s a pretty low risk shot, I"d imagine.
I haven"t had time to read everything the past page, but here are my thoughts about tracking the marketing. The majority of our marketing is with direct mail, and I make tweaks to our letter/flyer every few months to test new ideas. We typically mail to the same clients throughout the year, so if we make a change it can be difficult to track whether they were calling off an old flier or one of our newer ones that we altered. I got an account at voiceshot.com that allowed me to track everything. It"s basically an 800/866/877 # that electronically saves the inbound calls and can act as a virtual receptionist if you want. It directly routes the call to your local #, but it saves the # of calls and phone # electronically. The cost is like $25/mo. and definitely worth it.
In a nutshell you can put the toll free # on your billboard or radio ad, but it doesn"t change anything with the inbound calls other than allowing you to track calls coming to that specific phone number.
In a nutshell you can put the toll free # on your billboard or radio ad, but it doesn"t change anything with the inbound calls other than allowing you to track calls coming to that specific phone number.
If a lot of your business is repeat. You may want to think of some easy ways of increasing your client/mailing list.
An easy way would be to find a business that has a similar demographic of client and buy/swap client lists with them.
An easy way would be to find a business that has a similar demographic of client and buy/swap client lists with them.
Shonuff
Mr. Poopybutthole
- 5,538
- 791
Which is fine, but in the landscaping industry, people are always trying to add on adjacent product lines. I"m not saying it can"t be done, but we"d have to be very careful.rinthea said:
A very simple idea I came up with is networking with other landscaping companies. We have deals with a few of them to be subcontractors. We have a ton of high dollar equipment which makes us able to do any job. Some of the smaller companies can"t. For instance, a guy who just spends 90% of his time doing lawns can"t do the high end jobs. Customers ask them to do them, and then they use us a subcontractor (and add on a % for them). We never invoice the customer, we invoice the landscaping company.
Next week, I will send a letter and maybe call the other companies in the area that would be interested in subcontracting, and can"t afford to spend several hundred thousand to do the high end jobs, or can"t be bothered. Some of them do other things, but have a large presence. For instance, one of them has all of the landscaping contracts for every Lowe"s within 45 miles, and subcontracts a good bit of work.
Shonuff
Mr. Poopybutthole
- 5,538
- 791
Billboard won"t work with the current vendor I am using. I just got a list of inventory, and its either cheap billboards in lower income areas (not our target customer), or it goes for $2k a month near where all of the corporate HQ"s are. The rate is pushed up there because the vendors (and potential vendors) try to impress their potential customers by dropping big cash on the billboards.
I"ll need to look at other areas, but April is looking pretty good, sales wise. At this rate, we"ll do 50k in sales hopefully, which is all we can do with this current crew (max capacity). If sales keep spiking up, I"m going to need to hire more, which I am loathe to do in this economy. But we are a service business, and people expect prompt service and don"t want to wait three weeks.
Im sending out a mailer to our past customers, which always seems like it brings 10-12k in the first 30-45 days after I send one. "I love you man" brings alot of calls for estimates. They eat that stuff up no one spends a couple of k telling customers how much they love them.
I"ll need to look at other areas, but April is looking pretty good, sales wise. At this rate, we"ll do 50k in sales hopefully, which is all we can do with this current crew (max capacity). If sales keep spiking up, I"m going to need to hire more, which I am loathe to do in this economy. But we are a service business, and people expect prompt service and don"t want to wait three weeks.
Im sending out a mailer to our past customers, which always seems like it brings 10-12k in the first 30-45 days after I send one. "I love you man" brings alot of calls for estimates. They eat that stuff up no one spends a couple of k telling customers how much they love them.
Obviously our industries our different, but in the Pizza business, we went from doing zero coupon-ing pre recession (around 6% which was mostly instore specials) to heavy coupon-ing (around 10% last month). However we are finally up (same month sales) after 24 straight down months from this recession. We"ve also seen 2 major competitors go out of business during that time for one location, so it is tough to attribute all the success to just the mailings, but our second location is also up (which is 30 miles away).
Things that worked well for us was doing a blanket mailer in a publication called "The Red Plum" and we did target magnet mailers specifically to businesses. The magnets have been our best return and they are great cause your phone number stays stuck to a fridge or whatever. The magnet mailers might work well for you because you can target neighborhoods. I think we spent around $0.30 a piece on them but don"t quote me on that.
Something else you can try would be door hangers. It can be a bitch to hand them out, but you can target neighborhoods and I"m guessing most people just grab random landscapers out of a phone book, so that might give you and edge. When we did them I had my employees hand them out with each employee putting a unique stamp on the back. I gave out bonuses to the employees who had the most returned, seemed to be good incentive for them. Saved me the trouble of having to do it myself and/or overpaying some agency to do it for me.
Things that worked well for us was doing a blanket mailer in a publication called "The Red Plum" and we did target magnet mailers specifically to businesses. The magnets have been our best return and they are great cause your phone number stays stuck to a fridge or whatever. The magnet mailers might work well for you because you can target neighborhoods. I think we spent around $0.30 a piece on them but don"t quote me on that.
Something else you can try would be door hangers. It can be a bitch to hand them out, but you can target neighborhoods and I"m guessing most people just grab random landscapers out of a phone book, so that might give you and edge. When we did them I had my employees hand them out with each employee putting a unique stamp on the back. I gave out bonuses to the employees who had the most returned, seemed to be good incentive for them. Saved me the trouble of having to do it myself and/or overpaying some agency to do it for me.
When I was looking for a landscaper for my house I called a good friend who manages a lot of rental properties for a recommendation. When I needed a HVAC repairman I called a good friend who is a remodeling contractor for a recommendation.
Magnets, random mailers, and door hangers might work for pizza, but I would never use one for a contractor. I think the best advice I"ve seen here, for Lyrical, would be to partner with a general contractor for referrals and to exchange customer lists.
But that might not even be necessary, considering how well Lyrical"s sales are doing and the fact that his crews are maxed out.
Magnets, random mailers, and door hangers might work for pizza, but I would never use one for a contractor. I think the best advice I"ve seen here, for Lyrical, would be to partner with a general contractor for referrals and to exchange customer lists.
But that might not even be necessary, considering how well Lyrical"s sales are doing and the fact that his crews are maxed out.
Lendarios
Trump's Staff
- 19,360
- -17,424
How about contracts with developers / real states agencies? You may have tried this already but you may get a deal of "free landscaping for 4 month if you buy a house!!", you sure eat the costs but more than likely keep that customer for some time. Or maybe even break even on the cost if you can get some sort of predefined deal with the seller.
Shonuff
Mr. Poopybutthole
- 5,538
- 791
Once a year we send out thank you cards with magnets, and every time we invoice a new customer, we send out magnets. Most of our customers know us, but given the high amount of corporate employers in the area, it does help with that type of customer that tends to move alot.opiate82 said:
We put up door hangers in the Winter, and picked up about $500 a week. Now that we are in Spring, we don"t have the staffing to walk door-to-door, since everyone is working on jobs. I"ve decided that when we get slow, I"ll pay the guys to do door hangers (since I pay them 35 hours in a week even if there"s no work).
I may hire an extra guy just to have as cushion, and pay him to do door hangers. April still tends to be slow, and we"ll probably do 50k, which is the most I can do with four guys. I am concerned that if we get up to pre-recession numbers (and it looks like we are getting close with the rebound in business the last six months) then we"ll lose customers that won"t wait. One time when we did 150k in a month (totally slammed), we lost about 20k in business from customers we couldn"t get to.
The problem is that the business is hard to predict sales-wise. A year ago, in the dead of Winter, we once only did 6k in sales (not good when you have nine people working for you), and in that same 12 month period, did 150k in sales in a month. Alot of times, we have to eat a loss for a few months, to make sure we have adequate staffing in the big months.
Shonuff
Mr. Poopybutthole
- 5,538
- 791
Don"t get me wrong. Pre-recession numbers, we had another crew that contributed 480k in sales a year. That is the goal.Ashes Emberblade said:
Whether it sounds greedy or not, I don"t care. You have to put as much $ away as you can in the bank account in this business for the slow times, given the cyclical nature. I"ve lost 100k in three months, I"ve made it in three months.
When customers are out and buying, its time to maximize sales, because in the Winter, I"m usually holding my bleeding rectum for those months, and me and my employees are sitting around looking at each other instead of working.
The goal of doing more advertising is to try to smooth out the sales by month, instead of relying on word-of-mouth and warm weather to spur sales.
That is exactly why I prefaced my post with "our industries are different." Also just because you do your due-diligence doesn"t mean random joe-blow does. I became a home-owner before most people in my circle of friends so when I had to higher a contractor they weren"t much help for providing a reference. I just looked up 4 different random ones online for reviews (and to check licenses) and got bids. If I had a flyer or magnet sitting on the fridge, they probably would have ended up being one of my randomly selected contractors who had the chance to give me a bid.Ashes Emberblade said:
I think one thing all business industries can agree on is that word-of-mouth is the most powerful form of advertising.
Ya, that can be rough. We are pretty consistent. I can tell you down to the week, when we"ll be our busiest and when we"ll be slowest year in and year out, and we don"t have nearly the swings you are describing. Also cutting labor during the slower periods is a lot easier for me. Out of curiosity have you tried using temp-labor when you get a spike in sales?
Shonuff
Mr. Poopybutthole
- 5,538
- 791
We have very few contracts, and I like that the best with those entities, and I like that the best. We do all of the work for a small city that can"t rationalize doing it themselves, and had them as a customer for over ten years. Once you give good service, you tend to keep the larger entities. If we had a contract, we"d have to renegotiate every time it ended.lendarios said:
Shonuff
Mr. Poopybutthole
- 5,538
- 791
I"ve thought about using temp labor, but heard nightmares about temp labor coming to work high, or coming to work with knives. And, for the most part, we need skilled labor, alot of our guys have at least three to four years experience. We also move alot of equipment around, and driving manual on a big dump truck takes time to learn.opiate82 said:
Cutlery
Kill All the White People
- 7,050
- 21,179
I dunno man, Ashes is a tool, but I"m with him on this. Anything that gets stuck in or on my door gets chucked in the trash. Anyone who comes to my door gets told to fucking leave, immediately.Lyrical said:
If I need your services, I"ll find you. If you make it easier to find you, you might get more of my business. I just don"t think that shit that hangs on my door and gets thrown in the trash as soon as I find it is the answer to that problem. You litter my yard and want me to call you? Fuck off.