The Design Builder's Blog

Get Ready, Complying With the RRP Rule Will Get Much More Expensive

EPA to raise RRP fees

Businesses complying with the EPA RRP Rule should plan ahead for increased costs.  Because of EPA's mismanagement and lack of accountability regarding the RRP Rule, the actual costs to administer and enforce the rule have so far dramatically exceeded the fees collected from complying firms.   To address the shortfall of funds EPA plans to raise the fees related to the rule.  This will likely mean that the cost of firm certification and firm re-certifications will dramatically increase.  And, because the RRP rule is required to be self funding, it looks like EPA will need to raise the fees high enough to offset their losses since the program began, as well as their ongoing costs going forward.

The increased costs will definitely add to the advantages non-complying firms have been enjoying so far, further punishing legitimate businesses for complying.  I also predict the increased fees will promote more illegal work, therefore more kid will be needlessly poisoned because many in our our government are incompetent.

The amount of the EPA RRP fee increases is not yet known

Because EPA did not do an accurate estimate of program costs and revenues when they set their original fees, money coming in to support rule administration is not coming anywhere close to the actual costs.   If EPA were a for profit business they would already have gone out of business when it comes to RRP.   But, because the EPA and its leadership are not held to the same standards as for-profit businesses and business leaders, not only will they be allowed to continue operations, those at EPA who are responsible for the RRP rule get to keep their jobs and paychecks, despite such dismal performance.   And, rather than concentrate on fixing their business plan to create financial health, EPA can simply charge their customers more money.   The problem is that their customers, those who must comply with the rule, do not have any other options they can choose from to do business with.  

Here is a summary of information to help you understand what has happened and what to expect going forward

Note: Info below is from an EPA Office of Inspector General Report dated 2/20/13 titled "EPA Is Not Recovering All Its Costs of the Lead-Based Paint Fees Program”

• EPA had not conducted a formal cost study to determine its actual program costs before establishing fees.
• According to the report, EPA is losing money on the RRP program.
• Based on the agency’s estimates since the RRP rule went into effect in 2010, the total loss will amount to around $16.4 million by 2014.
• Fiscal year 2010, the first year of the rule, actually netted a profit of $8.9 million, but costs are exceeding fee collections by $25.3 million for 2011 through 2014.
• The report pointed out three issues contributing to the EPA’s unrecovered costs.

1. The agency has not conducted recommended biennial cost reviews to ensure that fees are in line with costs.  (Think WAG: "Wild Ass Guess")
2. The fee structure also does not take into account all the indirect costs needed to recover the cost of administering the RRP program.
3. RRP firm participation is lower than the EPA projected.

• The report says that by not recovering all of its program costs, “the federal government did not collect funds that otherwise could have been available to offset the federal budget deficit.” (In business speak this means they contributed to the deficit by operating beyond their means.) 
• The OIG recommends that the March 2009 fee schedule for the lead-based paint program be adjusted “to reflect the amount of fees necessary for the program to recover the costs of implementing and enforcing the program.”
• The report indicated that the EPA agrees with the recommendation and "intends" to take “corrective actions".  
• According to the report EPA agreed and plans to conduct a biennial cost review of the RRP program in Fiscal Year 2013.

Wrapping this up!

Here is what the EPA Inspector General had to say:

“The President’s Budget Message for FY 2012 states that reducing the long-term federal deficit must be a priority. The federal government is looking for ways to save money and cut unnecessary costs. We believe that EPA could help the federal government in this endeavor by collecting more lead fees to recover more of its costs"

So to save money and cut unnecessary costs, does your business raise its prices too?

Generic Contractors Are Fading Away, Brand Names Are Shining

Remember the isles of generic vegetables at the grocery stores back in the recession of the 1990's?   Just like the manufacturers of those cans of generic vegetables, during the recent recession many contractors put themselves into a commodity market where the consumer chooses product based on price.

Manufacturers of those generic foods told us what was in the can was the same thing you would get if you bought the name brand products.   They also told us that the reason they could sell at low prices was because they didn't do any advertising and skipped the fancy labels on the can.   Essentially during the recession of the early 90's manufacturers of these products were banking on cash challenged consumers being attracted to their low prices for what they claimed to be the same quality of products they would get if they purchased the more expensive name brands.

Here today, gone tomorrow

My recollection is that those products occupied a few isles at the supermarket during the early years of the recession and consumers did give them a try.  But, by the end of the recession consumers stopped buying them and the isles went away.   My theory is that consumers discovered the products weren't the same quality as the name brands, the quality of the food often varied from purchase to purchase, and even at a lower price buying them just wasn't worth it.   I can tell you from my own experience that my kids wouldn't eat the generic spinach.  For my family saving money on generic foods really didn't save us any money at all because what we bought didn't serve the purpose for buying it.

I would suggest the same thing is currently happening to many contractors who resorted to similar tactics.  To lower their prices they too at the start of the recent recession took on generic labels and stopped doing any marketing and advertising.  They also offered their services with the promise that even at low prices consumers would get the same quality project the well known name brand contractors were offering.  Like the generic food manufacturers of the 90's, now that the economy is improving, these contractors are  finding it hard to sell anything at all.

Here’s my message

This should serve as a wake-up call for contractors who want to stay in business and actually earn enough money to live well, maybe even eventually be able to retire when their body's give out due to old age.   Let's face it, if your selling strategy is to be the lowest price, you need to be the loser to win.   When consumers are short on money they may be willing to give you a try, but if your offering leaves a bad taste in their mouth they will likely go back to buying from the name brands as their income improves.

If you are having a hard time accepting my thoughts in this article just take a look around you.   All over the country I am hearing from name brand contractors who are overwhelmed with work, are raising their prices and desperately need more staff to help them get the work done.  At the same time generic contractors are complaining that they have very little work and consumers inquiring about their services are still aggressively beating them up on price.  Like the generic vegetables, I am pretty confident many contractors with generic labels will soon be gone from the isles where consumers shop for a contractor.

Think about it.  

If you brought a 30 pack of generic beer to a Super Bowl party, would your buddies let you in?

Contractors, Will Your Use Of Subcontractors Land You In Jail too?

Being a contractor is no longer an amateur sport.  Due to government regulations and laws a contractor can get into serious trouble if he or she is not following the rules of law.   Even if you were ignorant of those rules, the government will still hold you accountable to the legal responsibilities you must accept if you run a residential construction or remodeling business.  A few weeks back I shared how a GC and his subcontractor both got fined for not following the EPA’s RRP rule on the same job due to an anonymous tip.   Between the two businesses they could end up paying about $120,000.00 in fines.   In this blog article I want to make you aware of a contractor who may just go to jail for purposely cheating regarding workers compensation.

The facts

The owners of Triple Star Roofing in Wood County Ohio were recently found guilty of fraud for failing to report their payroll to the Ohio Bureau of Workers' Compensation.  Like the RRP violations mentioned above, their business was investigated after an anonymous tip.   During the investigation bank records were analyzed for the 2004 to 2008 time period.  The investigation found that checks were issued to the same individuals on a weekly basis with many of them indicating “payroll” in the memo section.  As a result the company owners now face possible prison terms of one to five years and fines of up to $10,000.  Additional charges are still pending for the 2009 to 2012 time periods.  I am sure you would agree, they are feeling a world of hurt and are probably scared as hell.

“Schemes like this to avoid paying premium undermine the purpose of workers’ comp insurance – to protect workers who are injured on the job – and will result in unwanted attention from our investigators.”

Steve Buehrer, Administrator/CEO, Ohio Bureau of Workers’ Compensation (BWC)

What about you and your business? 

Are you operating illegally to save money and or to be the lowest bidder?  How would you answer the list of questions I pose below?  I don’t know the laws in your location, but remember, if you were in Ohio, and answered yes to any of them, you too might be facing jail time if you get caught.

• Are you paying employees “under the table” to avoid paying payroll taxes or workers compensation premiums?
• Are you treating employees as subs to avoid paying payroll taxes or workers compensation premiums by giving them 1099’s?
• Are you misclassifying workers to put their payroll into a lower cost workers compensation rate?
• Are other legal and legitimate contractors frustrated that you are stealing work away from them?

These are some of the reasons the owners of Triple Star Roofing are facing potential jail time.   I wonder how their families are doing while they all wait to see what will happen.

So let’s just say you get caught, have to pay fines, but don’t actually have to go to jail.  

How would you look at that?   I know one contractor who had that happen to him.  When I asked him about it he told me he was definitely scared about going to prison so he spent big money to hire a good lawyer to try to keep him out of prison.  He said the lawyer was successful but he was definitely sweating it right up until the final verdict.  He didn’t get any jail time but did have to pay a lot of money in fines.  He also told me that when everything was said and done, and based on all the money he saved over the years by cheating, the fine and lawyer fees were far less than the money he saved.  He told me he felt it was worth the risk.

I then asked him if I asked his wife and kids if they thought it was worth it what their response would be.  He told me he had never thought about that…

Read More Here

How One Contractor Is Keeping His Prospects and Customers Happy As The Economy Rebounds

As the remodeling marketplace picks up the amount of work a business owner must get done is also picking up.  The challenges of keeping up can become multifold depending on the type of work you sell.  For example, for many full service remodelers, not only is the number of projects increasing, so is the average project size and therefore the number of details to be handled for each project.  If you downsized your staff during the recession to control costs you might want to consider staffing up again if you want to keep your customers happy and help your prospects make quicker buying decisions.  Another good reason might be that you want to have a social life again someday.

One contractor’s success story

One of my coaching/mentoring clients, Joe Levitch of Levco Builders LLC in Boise ID, recently shared with me that he was having challenges getting prospects to pick out products and make decisions during the design phase.  This prevented him from finishing up their agreements in a timely manner and getting new jobs started.   He was also having problems finding the time for ordering and procuring products during production as well as closing out jobs due to the number of small details to be managed at the end.  All of this was getting in the way of Joe growing his business and being able to keep up with the pace of sales.   He shared with me that worrying about getting everything done was often times getting in the way of being “fully present” at meetings with clients and prospects. Joe referred to it as feeling like spinning plates in the air.  He said he didn’t want to get to a point where he dreaded another new lead phone call coming in and wanted to be sure he served his clients in the best way possible.

To address his challenges and take advantage of the opportunities of a recovering marketplace Joe created a job description detailing the help and skills he was expecting and used it to recruit and hire the right person to add to his team to work with him and his clients.  By working together with his new hire Joe reports that he now has time to work on the future while his new office person works on the current. 

So far so good

The changes Joe has made provide a better level of service and attention to current prospects and customers, and, at the same time, gives Joe the time and ability to also fully focus while meeting with new prospects for the first time.  By sharing the workload with the right person and using the right process Joe has improved the service his company delivers and his customers are very happy.  He says he now looks forward to working with new prospects as their calls keep rolling in.

As The Economy Improves, Will You Become A Slave To Your Business?

Now that work is picking up many remodelers who had larger businesses before the recession hit have admitted to me privately that they are overworked and limping along.  Because they let staff go during the recession they now have an insufficient team of leaders at the middle management levels, both in the office and in the field.  Without the right staff to help share the load and responsibilities that come with increased volume they are concerned they will become and remain slaves to their businesses.   To solve this dilemma and remain successful these remodelers will need to quickly find, recruit, train and create ways to retain high quality talented employees.  

The “Catch 22” #1

The longer they wait to get such people on board and trained the tougher it will be to find the time to get such people on board and trained.  This is because without the help already in place their workload will only increase even more, further limiting their available time to focus on finding new hires and getting them up to speed so they are productive.

The “Catch 22” #2

In a good economy it can be very difficult to find people who have the background, skills, and experience to perform as high achievers.   These employees are already working for someone else or are taking advantage of the good market and are running their own businesses.  On the other hand, during the recession economy like the one we are hopefully getting out of, there was an abundance of available talent, including those who owned but closed down their businesses.  Act now as the economy and remodeling are picking up and you might find great hires.  Wait and you will likely have to comb through whoever is left after other contractors have scooped up the cream of the crop.

Consider the following options if you want to lead the pack and get your life back

• Consider hiring new talent before everyone else figures out it is time to hire.  Make sure money isn’t the only reason they are joining your team.
• Consider replacing underperforming staff now while the selection of good employees is strong, before compensation expectations explode due to supply and demand, and while those who want new opportunities are eager to prove their value.
• If too much of your time has been shifted back to production management activities, consider letting go those carpenters who need to be managed, hire real lead carpenters this time and use subs where needed to fill in labor gaps.
• If you already have good talent, make sure you do what you can to keep them with your business.   As the economy returns other businesses, desperate to fill positions, will be over-paying to grab or steal talent from their competition.
• Keep in mind that money is not the primary motivator when trying to retain good talent.  A positive culture, opportunity for advancement, benefits and real responsibility all rank high for employees who have a long term perspective about their careers and personal goals.

 

Final thoughts

Attempting to strategically ramp up staffing needs as the economy improves and get new employees acclimated before your business already needs to have them at high capacity will definitely be a juggling act.   There is no better time than now to get that process started.  Those contractors who use their past experience in this area and or the shared experiences of a mentor will have a jump on grabbing top talent.  They will be the select few who are ready for the business opportunities that will come with an improved remodeling marketplace.

Have The Right Compensation Strategy For New Carpenters Before You Hire Them!

One of the benefits of the great recession was that as business slowed down businesses got rid of underperforming and or overpaid employees.  This article is intended to help those remodelers who had or may still have such employees.   I hope by reading this information they can avoid repeating the same mistakes again as the economy eventually improves.

During the boom times many contractors, trying to get enough field labor to keep up with volume demands, resorted to overpaying carpenters and other field workers just to get them on board.  Also, over time, many remodelers gave wage increases to these people just to keep them, either in fear of losing them and or because another business offered the employee more money.  Additionally, many employees received wage increases based on longevity, perhaps with little or no consideration for any actual advancement in performance, responsibility or productivity.  One could fault the business and or the economy for why this was happening, but certainly not the employees.  After all, if market demand stimulated increased wages, employees would be foolish not to pursue and take the increases.

Then the bottom fell out

The great recession changed this scenario somewhat due to layoffs and downsizing.  The surplus of unemployed field workers got as high as 27% for the construction industry during the recession.  Unfortunately many skilled workers left the industry for other jobs, less physical jobs and or better job security.   This has set up what is expected to be a major labor shortage problem for our industry as the economy and construction pick up again.  Many contractors around the country are already reporting challenges finding skilled carpenters to keep up with construction demand.  As the demand goes up, so will the wages that carpenters can demand to either stay at their current jobs or that other contractors will use to lure workers away to work for them.

Finding, attracting and keeping the best carpenters will require strategic thinking

If you plan to hire additional carpenters as your business volume picks up now is the time to put a plan together for not only finding, but also attracting good carpenters to work for your business and then to get them to stay with your business.  The compensation package you put together should not only capture their interest, but also help them see opportunities for future growth and increased compensation if they are loyal and motivated.

This provides a great opportunity for remodeling business owners to get compensation and any future wage increases in line with actual performance, rather than continue using the subjective reasons so prevalent the past.  It should only make sense for a business to put a plan in place that properly compensates employees based on the value they bring to the business.  It also makes sense to put such a plan in place so employees will know how they can and when they have earned the right to expect increased compensation.

Buying a boat or getting married is not a good reason to give a carpenter a raise!

The automobile industry uses a flat rate manual to determine the labor costs for auto repair services.  The strategy they use is not to estimate the number of hours to do a certain task, but rather the typical actual cost of the labor to perform the task.  A repair shop that uses flat rates pays their employees for what they accomplish, not how long it took them to do it.  A construction or remodeling business could do something similar.  Such a strategy could also help the business and the employees learn where to invest training to improve performance and stimulate wage increases for those who buy into performance based opportunities.

If remodelers and other contractors continue to use purely subjective methods to determine compensation for field employees, they will be setting the example for and encouraging employees to also continue using subjective methods to assess their own performance.  If this plagued your business in the past it’s up to you to make sure it doesn’t happen again. 

Summary

Before you hire new employees or bring previous employees back into your business take the time to think out and document compensation plans based on merit.    If you introduce such a plan to job candidates it could even act as a filter.  Top performing candidates will be attracted to such a plan, but those who can’t or won’t perform will likely find somewhere else to work.  After all, as a business owner your compensation is based on actual performance.  Why not offer the same opportunity to employees.  If they make more money participating in such a plan, so will you!

Related articles:

Successfully Grow Your Business By Creating A Ladder Of Opportunity For Employees

How To Make The Ladder Of Opportunity Happen At Your Construction Business

Simple Profit Sharing Plan For Contractors

The Marketplace is Improving; Are You Sure You Are Working With The Right Vendors?

The marketplace seems to be picking up for contractors.  Many are reporting increased leads and sales.  With increased demand for the products contractors need to build their projects we will definitely see supply and demand challenges with local lumberyards, the big boxes and specialty product vendors.  This supply and demand challenge is one of the reasons many in the construction industry are predicting as much as a 25% increase in cost on many building products.  Although contractors need to be aware of these increases as they price their projects, I suggest they also need to make sure the vendors and suppliers they purchase their materials and products from will be prepared for the increased demand.

If you are a contractor who has been buying on price from vendors who have been selling on low price to get your business, you might want to think twice.   If that vendor has a good business, low or no debt and is using efficient business systems and technology to keep their costs low, you may be OK.  But if your vendor has very high debt, has cut back on staffing, equipment and service, just so they could sell at low prices, their business may not be prepared for a surge in sales as the economy improves.

Choosing and keeping the right building product dealers for your business and your customers

Here are some things to think about regarding the vendors you are currently using.  This same list can also help you decide which vendor or vendors you should work with going forward:

• Many lumberyards and specialty dealers are short staffed.   To save money and to stay in business many of these businesses have reduced staff during the recession and often times the people they let go were the higher paid employees.   If this is a tactic any of your suppliers used they may have let go many of their most knowledgeable staff.   The remaining staff, often less skilled and far less knowledgeable about building products, construction and contractors, will be challenged to serve contractors as the number of contractors doing work and buying materials picks up.
• Building product suppliers who have high debt may not be able to finance the cost of increasing their inventories to keep up with the predicted supply and demand challenges as the economy improves.   If this happens at your supplier you may find that many products, even common commodities like framing lumber, will be out of stock.  Imagine going to the lumberyard first thing in the morning to get the materials you need to frame a deck or reframe that kitchen, only to find out you can’t get what you need.  To keep working that day you might have to pay for longer lengths than you need, or might even have to drive to a different supplier in the hopes that they will have what you need so you can work that day.  Remember, if you lose two hours chasing materials, in reality you also lost two hours of productive time on the job.   That would mean you lost a total of four hours you could have billed your client for if the materials were already at the jobsite.
• Lumber and building materials dealers who cut back on staff may also be challenged to help you sell to your customers.   If you had a customer who wanted to see the door, cabinets or windows you recommend, will you be able to send them down to your local supplier to see the products they are looking for?  What is the condition of the showroom?  Is there going to be anyone there to make and take the time to meet with and help your customer?   Will the person working at that dealer have the sales skills, product knowledge and knowledge about you and your business to help you make the sale?

The risks of low price

Selling on low price typically puts any business on a path to failure.  Sure, it may seem to help things at first when money gets tight.  However, unless they can ramp up their businesses, and do so before the market place improves, they will be forced to play a game of keep up and catch up as their customers’ needs and demands for products and service increases.   Working with a low price vendor might seem attractive, but can you be confident they will have what you need when you needed it?   If they require a deposit on special order items, are you confident they will still be in business by the time you expect delivery of what you ordered?   What will your customers think of you and your business if their project start date gets delayed and or the completion date gets extended because you can’t get what you need from your vendors to keep their project and your business on schedule?

Summary

Choosing the wrong vendors by saving a few bucks on materials may cost you and your construction business lots of wasted time, money and the valuable referrals your business has enjoyed from what used to be happy customers.  I highly recommend you choose your vendors wisely!

Guest Blogger: Justin Jones is a licensed General Contractor, Roofing Contractor, and Plumbing Contractor based out of Palm Harbor, FL. Justin is also a writer and speaker on topics including Contractor Sales, Marketing, and Leadership. At 32 years old, he is a member of Generation Y.

Mentor Me, Please - Gen Y Business Owner Offers Peers Advise on How to Learn From Craftsmen

Dealing with older tradesman can be tricky at times. In my own business, I've been dealing with this interesting arrangement for the past seven years. Through the ups and downs, I have managed to form some great relationships with older tradesman.

At first, I expected them to complete tasks with incredible haste, but ultimately, I realized that there was no harm in taking things a bit slower. I set out to establish a mentor-mentee relationship with these older, more experienced tradesmen.

Start With Respect

Respect. From those first meetings with prospective employees, I've always been careful to offer the utmost respect, particularly when it came to older craftsmen. I respected them based on their many years of experience.  I took the time to listen to stories about the good ole' days and how things were done differently.  I'd smile and nod my head as I listened. Many of the stories were well-told and well-crafted, providing me with wonderful insights and lessons. I never questioned the knowledge of my senior tradesmen.  And if questions ever did arise, I was always careful to ask in a tactful manner.

Communication.  As I'm in the process of hiring a new individual, I always inquire about their communication preferences. For years, most individuals would indicate their preference for phone calls. But more recently, individuals have expressed a preference for emails and texts. Quick and concise “yes” and “no” communications amongst my team members have served to maintain an open dialogue platform. These open lines of communications have made my employees feel comfortable to call at any time if they need direction or they're second-guessing a decision. I feel this is an extremely important part of our business.

Questions. From job to job, I take the time to lend a helping hand, whether it's loading materials or inspecting trade tools. These interactions provide a perfect opportunity for asking questions. Many tools had the appearance of museum artifacts, but every once in a while, I got a chance to see these relic tools in action; my skepticism was squashed after viewing their quick time-saving functions. I got to return the favor as the building codes have changed several times over the past four years. I'd receive calls from tradesmen, who were wondering if there had been a code change. Sharing back my knowledge has proved to be a great opportunity to build rapport and return the favor.

Building Rapport. Last week, I approached my team – consisting of several individuals in their late 40s and 50s. I had the opportunity to get their feedback on what they enjoyed most about working on my team.  Their answers were all based around rapport. They liked the fact I support their decisions and they were grateful for my willingness to step in and help without being asked. As the leader, I've always been quick to step in and get the project back on track if issues arise. In addition, I've learned that communication with these team members must be clear, concise and written. Accommodating them in this way has led to much better productivity and the strong rapport makes for a healthier work environment.

Learn to be humble

I turn 32 this year and I'm willing to admit to my team that I don’t know everything and on occasion, I need help. Many individuals in my generation believe they know everything, but Google won’t teach you how to work as team, nor will it teach you how to maintain your focus on accomplishing a goal.

We work as a team as we complete tasks and gather referrals.  This team approach has created a wonderful synergy between me and my team members. We have built a relationship based upon trust and open communication.

My advice, what do you think?

Approach older tradesman and offer them the respect they deserve. Be willing to learn from these more experienced individuals. Adopt a mentor-mentee relationship and you may be surprised by how much you can learn from these older tradesmen.  Anything you would like to add?

Unhappy With Government Policies and Regulations Affecting Remodeling Business?

On February 5, 2013, the nonpartisan Congressional Budget Office released a projection that the economy will remain slow this year. Unemployment is expected to remain above 7.5% through 2014 for a sixth consecutive year, the longest stretch in the past 70 years. While the CBO forecasts that the nation’s yearly deficit will dip below the trillion dollar threshold, it is projected to rise again later in the decade. Responsible spending reductions are needed to change that trajectory. By 2023, the national debt is projected to equal an unsustainable 77% of the nation’s economy (Gross Domestic Product), and still be going up.

Recently, the House Small Business Committee launched a new resource to help small businesses help shape federal regulations and add some real world common sense to the process. This initiative, “Small Biz Reg Watch,” will highlight proposed regulations that will likely affect small firms, and inform business owners of how to make comments to the appropriate federal agency.

Chairman Sam Graves Discusses Small Business and the Economy

Make Your Opinion Known

Most small businesses do not have lawyers or lobbyists to help them with regulatory compliance, like some larger corporations do. Not all regulations are bad, but many can be unnecessarily burdensome, so it is important that small companies get to express their concerns before rules become final. Small businesses bear a regulatory cost that is much higher than the cost of compliance for large businesses. This initiative will help small companies make their voices heard. 

On select proposed rules that impact a large number of small businesses, the Committee will communicate about the regulatory comment period via email, social media, and even district events around America. Small businesses are also encouraged to join the hundreds of small firms that share insights with the committee at their interactive web platform, “Small Biz Open Mic.”

Note:  Most of the content of this blog post comes from the Weekly Update email newsletter published by Sam Graves, Chairman of the House Committee on Small Business.  Click here to sign up for the weekly e-mail newsletter and other e-mail alerts.

How To Help Your Remodeling Prospects Make Buying Decisions

Consumers reading or watching the news are being fed information everyday about financial scandals, difficulty obtaining credit, increasing costs on just about everything, and the uncertainty of when things will improve.  Let’s face it, bad news sells better than good news, there is plenty of it and as a result consumers have a low confidence level. 

The consumer needs to have confidence

Before they will commit to buying remodeling, or anything for that matter, they need to have confidence in themselves, what they plan to buy, and, their salesperson.  Take the time in the sales process to understand their concerns so they gain the feeling that you know what they are up against.  Again, they want options, but just throwing options at them will increase their confusion and concerns about making a decision.  Work to gain their trust and confidence, not by what you say, but rather by the intuitive questions you ask. 

If you know and ask the right questions, questions that help them feel you must know what you’re talking about, and that get to the heart of the purpose for their project, as well as their concerns about it, they will come to see you as the trusted expert.  If you go about interacting with them in a sincere and purposeful way, they will come to trust you, your solution, your business, your purpose, and, ultimately their ability to make a good decision.

The consumer needs proof

A good conversational exchange may help swing a prospect over to your side, but I suggest they will need proof of your offer and claims so they can confirm any agreements and stay confident after closing the deal.  Proof can be accomplished in many ways.

For example you could provide strong references that can back up from personal experience your abilities and promises as real.  Professionally prepared project specifications and agreements that detail the project as well as the customer’s purpose for doing the project will show you truly listened and captured important details.  A payment schedule in your remodeling proposal based on project milestones can help them feel confident they will receive and actually see value as they make progress payments.  Describe for them your process for producing their project.  Let them know about your preconstruction and precompletion meetings and why you do them.  Tie several benefits of these meetings to any concerns they may have expressed during your discussions. 

Some of you may already be doing these things. 

If you are, but your still not seeing results, rethink how and when you do them.   Make sure your solutions are presented in a way that your customers can see how they address their purpose and concerns.   Don’t assume anything anymore, except that you can’t make assumptions.  People remember 10% of what you say, but 90% of what they say. If a customer says they like your solution, ask them why and seek a detailed answer.  In doing so they will hear themselves justify their decisions and you get a chance to make sure they didn’t add something you couldn’t deliver on or miss something you may already be including.  

Looking for sales training and or a sales coach? 

Contact Shawn to find out how he helps remodelers and other construction related businesses all over the country achieve the business and personal results they desire.  If you’re not earning and keeping enough money for your retirement yet he can help you change things.