To keep your shop busy, you may sometimes have to accept work at prices below your regular profit. Concentrate on developing and maintaining a backlog of profitable work. The bottom line on your statement of operations (income statement) at the end of the year will tell you how successful you’ve been in not only getting the proper sales mix, but managing it as well. Remember that the end-of-the-year statements are just that - it’s too late to change things! You must keep up with the current condition on a day-to-day basis of your business.

Aggressive companies can get leads by contacting federal, state, county and city purchasing agents, and asking to be placed on their approved bidding lists. Also, contact the government departments that handle construction and maintenance for bridges, parks, roads, schools, prisons, and hospitals. Before placing you on the bid lists, these agencies will usually check to see whether your company is bondable, and will require your meeting their financial and credit standards. Government work is usually awarded on a price basis. A purchasing agent must be very careful not to bypass the low bidder, since he must show ample justification. Government agencies pay slowly so be prepared for financing and retainage costs and unique billing requirements. Historically Underutilized Businesses (HUB) however are given some consideration not totally based upon price. When you’re provided with a competitive advantage, to not use it would be wasteful.

The manager or the estimator who delivers the proposal to the prospect for consideration must be sales minded. Don’t lose a job because of price. You have many other selling points to offer. Stress your record of service and follow-up, the reputation and dependability of your company, and your liberal credit or warranty terms. Refer them to some of your satisfied customers. Be prepared to negotiate price, but not to the point where the job is financially unattractive, if not downright risky! Try to get the order confirmed in writing then and there (the first time you call) before a competitor has the opportunity to convince them that they’re making the incorrect decision. Be sure to follow-up. We’re all subject to moments of doubt that we’ve made the correct decision. A phone call in an assuring tone helps us calm our fears, and dim the voices of doom from competitors.

Selling begins when the customer says “no.” Learn to overcome objections. Use the most important word in the salesman’s vocabulary by asking “why?” If you know why they won’t sign, concentrate your sales efforts to overcome the objection. Remember these steps in the sales presentation:

Attention - get it.
Desire - create it.
Action - get them to say yes, ask for the order, and close the sale. It’s amazing how many times sales personnel fail to ask for the order in a sales presentation.

Read books on sales techniques. Listen to tapes. Attend seminars. Discuss selling techniques at your trade association meetings. Why not show your customers how you arrived at your price, and let them see how reasonable your profit is? Give them a bid as per plans for the lowest possible price and, if you get the job, then is the time to sell them on extras.

Don’t waste your valuable sales time. Be selective in screening out the leads. Target your efforts where you’ll have the best chance of getting the business you want at a fair profit.

NOTE: For other closely related topics, be sure to review the newsletters on Marketing vs. Selling (#24), and Profit (#55) in this series of articles on Business and Financial Management.

Mike Holt’s Comment: This newsletter was extracted from my Business Management and Management Skills’ Workbook. Watch for our next newsletter, and as always, we encourage your comments and feedback. Send us your real-life experiences. Please respond to

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