Monday, January 24, 2011

The State of Our Industry

Another year has passed us by, and we are no better off than we were one, two or three years ago. As a matter of fact, too many contractors find themselves a lot worse off and a future that is bleak, if not unpredictable.

To be honest because someone has to be, gone are the promised results from trillions in dollars and whatever else this Administration has promised.

Gone is the promise that if we "invest" unemployment would not reach 8% Instead, we have a wildly underestimated unemployment rate of 9.6% To be honest, and as I have said someone has to be. Unemployment is somewhere around 16% (M6 numbers) and if we take into account all the small business owners who are unable to earn enough and going without, it is encroaching 25%

Gone is the promise of "shovel ready jobs." Instead, hard-earned taxpayers dollars have been wasted on highway signs boasting of results never produced and their insidious lies to the American people, and other pork they shoved down our throats.

Gone is far more than I believe the average American realizes.

Had we a crystal ball, possibly we could have seen through the inability and the inexperience of this Administration to improve the American economy. Maybe, people would have seen the fallacy of Green and LEED. Let's be honest (since someone has to be), until costs come down, demand goes up and there is an incentive (taxes) Green, and LEED is D.O.A., or at best, hemorrhaging profusely.

Good News and Bad News

Unemployment will not be addressed until Americans feel confident that Washington has a plan to control spending, balance the budget, and reduce the deficit. Meanwhile, big business will continue to keep its operations employment lean and hoarde their earnings, and small business will pay the price for being small and being the target of progressive politics.

If anything, I hope that you understand that you cannot wait for the Big Government of Washington to solve your business problems. Instead, you need a plan of your own. Here is why.

Housing will remain in a flux for most home builders until the inventory is reduced, or they come up with a better mousetrap. That mousetrap will have to be small, affordable, efficient, convenient and close to the homeowners place of work. Okay homebuilders, I just gave you the formula for your success.

Remodeling, renovating, and repairs will lead many to sales providing . . . they market properly. People and business will stay put until they feel confident. They will remodel, renovate, or repair what they have. If you are already in this sector of the industry, low expenses and smart marketing will be the key to your success.

Commercial construction will be plagued by its inventory and this is a major concern. Delinquencies and the failure of our banks to lend will keep the return of this sector in a head hold for years to come. Again, look to remodel, renovate, and repair to commercial properties as your major source of income. Low expenses and targeted marketing will be your tools for success.

Many were pinning their hopes for survival on the Promised Land of Infrastructure. With a broke Federal government and many state government's teetering on the abyss of bankruptcy, forget it because it ain't gonna happen! I hate to say it, but the HUGE union pensions for government employees, and the COSTLY progressive entitlements will keep them in the red or until they can shake these gorillas off their backs through bankruptcy court.

Agriculture is doing well so expect to see capital investment made in this industry. I believe that there is great potential for manufacturing. I see a lot of us getting fed up with China and its inferior products, for example 'drywall.' If you're like me, I would rather spend a little more but get the great quality and reliability from a product that says: "MADE IN AMERICA." To hell with the Chinese and their crap.

In the petroleum industry drilling is as dead, just like Obama intended. Watch the natural gas industry because Pickens was right. At this present moment big petroleum is looking to buy out the ng producers. What do they know? Well, oil is getting expensive and we have plenty of natural gas and Americans won't like paying $7 or more per gallon for diesel or gasoline. If they bring it on-line they will have to spend billions redoing their infrastructure

The good news is that the country will not come to a screeching halt. Life will go on. The affluent are still spending and people are finding a way to address their needs. You will see sales but few of them. At least nothing like five years ago. Those that will survive and thrive will have to educate themselves on managing their business far more efficiently than they do today. They will have to produce lean production costs, controlling overhead costs and producing effective and targeted marketing.

In short order, if you do not have a plan and strategy coupled with an adapted business mindset and focused marketing to capture your fair share of the limited sales opportunities that will present themselves within your marketplace. You are screwed. We are in this for the long-haul.

If anything, I hope this insight will help many of you. Maybe even rattle of few cages, so to speak. The doom and gloom will be a reality for those who do nothing to improve their businesses. Success will come from adapting, improving, change and something called evolution-flexibility.

Will you evolve or become extinct?

If you would like to discover how to evolve and adapt, I will be addressing this at my yearly SUPER Business-Building Conference in Orlando this March 21, 22, 23, 2011. So, be careful; if you do nothing or decide to do something for yourself and your business, it will profoundly determine your future.

Friday, January 14, 2011

Two 'Things" You Need to Know About Your Customers

"Henry, this has been my best year yet!" the conversation went, "as a matter of fact, I'm stepping up my marketing to make 2011 even better!"

Good news to hear from a contractor doing his work here in the Sarasota area, most certainly an area hard-hit by this down economy.

How is he doing it?

Simple, by focusing on what emotions and emotional drivers his prospective customer is using.

First, you must understand that everyone buys from emotion. Those emotions are want, need, desire and/or looking for a solution to their problem.

However, it is even more important to understand what is driving that emotion. There are two emotional drivers, necessity and narcissism.

Let me explain.

If a person's home burnt down, it would have to be re-built so they would have a place to live, that is a need and re-building it is a necessity. The emotions would be need and seeking a solution for their problem by the driver of neccessity, a place to live.

If a person was making more money and wanted to express their new found business success by owning a bigger, newer home so they could impress their family and colleagues with their new found success and status symbol, their emotions would be of want and desire driven by their narcissism.

As you can see, each is using an emotion but they are driven by a different driver, which brings a different perspective.

In order to execute a great marketing and selling program it is important not only what emotions the prospective customers are using to buy, but what driver is motivating that emotion.

I'll touch deeper into this in March at the SUPER Business-Building Conference for Contractors.

Meanwhile . . .

Good marketing!

Friday, January 7, 2011

2011 – The Good, the Bad, or the Ugly?

Here we go again, another year, another dollar … maybe? Again, we find ourselves facing another year of “known’s” and “unknowns”. Unfortunately, the “knowns” are uninspiring, at best.

Where ever you turn. You read articles in the newspapers, or hear news clips from the radio, or watch the humdrum of TV news, either the economy is upbeat or down in the dumps. It seems that they can’t get the story straight. Then again, the media aren’t the media anymore.

The truth is, it is costing more to live, and it doesn’t look any better for the future. There is a drag on the economy, but it is making a slow rebound and there will be a great need for the services that our industry offers. However, emphasis is on the word "slow."

I do expect that government funded projects will stall dramatically due to deficit and debt that continue to grow at the state and Federal level. The crutch that has to be worn is that the Obama Administration really missed the ball with its stimulus debacle. Instead of throwing billions of our hard-earned tax dollars at silly partisan sinkholes, it should have plowed more money into the infrastructure and really kick-started the economy. After all Construction is the Achilles Heel of the economy.

If you remember, Vice-President Joe Biden broadcasted that as a result of the stimulus spending, it would be creating 500,000 jobs a month this year. Hmm? Still waiting!

Housing will be slow but the “Big Gorillas” of the new home industry, are buying tracks of land at discounted prices as they look to the possible future of building new homes. The truth is no one knows when that will be, so possibly they could have waited and bought it even cheaper. Time will tell the wisdom of this decision.

Interest rates will undoubtedly have to climb and wage earners have to be willing to spend, but with an unemployment rate that officially (that’s a laugh in itself) scratching at 10% (more like 18%) I doubt we’ll see many movements in that arena soon since so many are 'giving up' finding work rather than Amercians going back to work we can't believe the numbers.

Expect prices to rise dramatically as gas approaches $5 a gallon, which is on the near future horizon, but also understand why. As the Fed keeps printing money it devalues our dollar. Our dollar is the World Reserve Currency. Unlike other countries that have to buy US Dollars to purchase oil, we don’t so we’ve always had an advantage in the cost of oil being less for us. There is behind the scene meddling by a number of countries (China, Russia, Saudi Arabia, India to name a few) to remove our dollar as the World Currency. If that succeeds, we could see $7.00 or more per gallon for the fuel that powers our economy. Watch this closely!

If interest rates creep up, I would expect a small flood of work to come on hand as owners attempt to take advantage of the last of the low interest rates. The only real problem is the banks. It appears that ‘holding’ money seems to be a better advantage for them until the Fed removes their “binky” and strips away the nipple that has been feeding them.

Therefore, I would expect service side of the industry to do well as owners want to keep existing properties up to date. Handyman services should also do well as homeowners look forward to repairing, as well as remodeling for those who want to update.

On the commercial side manufacturing and agricultural are showing signs of a strong comeback. Retail is at a crossroad. The holidays of 2010 showed many of them that they can make more money on-line than in the expensive upkeep of a box store. I would expect to see retail downsize it stores in lieu of the bigger profits that can be made on-line. Already, many big name brands are scouting this arena. Does that mean that shopping malls could be our next big ghost towns? Could be but only time will tell.

Hopefully, this year will be the last of the bottoms, and we truly start a climb out. I expect things to be slow, for some, they won’t even notice if a recovery is taking place. I don’t believe anyone can sit on the sidelines and wait. You must be proactive, get out and get your sniper scope clearly focused on what the prospective client is looking for and discover how you can get them to realize you’ve got it for them.

There will be sales out there, few but for those you have the ability to market your construction services will do much better than those who are sitting home waiting for the phone to ring.

Take heed in this advice, things are changing and you best change with them. If you are still stuck in the last century you will soon find yourself a dinosaur … extinct!

Marketing your construction services is the key to success in 2011 and beyond.

For those of you who serious about being successful in this economy and realize that change is necessary, you can spend three days with me in Orlando, Florida on March 21, 22 & 23, 2011. We’ll spend three days revamping your business plan and strategy so you can better position your business to getting more sales. This includes working on your marketing plan as well. Find out more at: