Improving Your Business
Is Our Business

Last week’s Home Improvement Profitability Summit in Northern Virginia brought together over 200 industry professionals for a 2-day event on in home sales, home improvement marketing, and best business practices.

Below are some pictures from the event – - if you were not in attendance, we hope to see you at our next program!

“Only in America do we use answering machines to screen calls and then have call waiting
so we won’t miss a call from someone we didn’t want to talk to in the first place.”
– Yakim Smirnoff

You want to talk to John Smith at XYZ Corporation. You dial the main number and the friendly upbeat phone response tells you to select a number from their menu of options or dial the extension number for John Smith. You dial his number as suggested and you get his voice mail message – - sometimes curt, sometimes garbled — sometimes very informative — and frequently very low energy.

Many times this is your first impression with a new customer and based on the presentation (or lack thereof) of the message they may decide on whether they will want to be doing business with you or your company.

Examine the following survey data from a pool of 413 responses (out of 500) consumer customers within the home improvement industry who have responded to voice mail messages.

27% indicated that they are uncomfortable and feel foolish talking to a machine.

22% felt that most systems didn’t provide sufficient time for them to leave their entire message.

61% indicated a sense of frustration and irritation at being unable to speak to a “live” person.

None of these create reasons for not using voice mail. They do however send up red flags indicating that these issues have to be addressed if voice mail is to be effective. The next aspects of the survey were even more revealing.

57% felt that voice mail instruction messages were often not clear and cited instances of those who “spoke rapidly” without clarity, or used unclear phrases when giving additional phone extension numbers or alternative parties to whom they could speak.

37% felt the use of phrases such as “You’ve reached the voice mail of John Smith” or “I regret I’m not here to take your message” or “Have a nice day” were cliché and had little to no impact on them.

68% of those surveyed said the messages were delivered with low energy which did not give them strong or positive feelings about the company they called.

Again, none of these conditions suggest that you should abandon voice mail in your business practices. However, it is a clarion
call for a more effective use of this vehicle.

Here are a couple basic rules to remember:

1. With live, person to person contact, you get approximately 2 minutes to create a favorable impression — on the telephone, you get approximately 30 seconds. However, with voice mail, the first 10 to 15 seconds may spell delight or disaster.
2. You (your message) is interpreted as speaking for your company and a weak first impression may well impact future relations with the caller.

Here are some ideas and methods utilized by some of our more successful clients.

1. Record your message using a script. Be clear and succinct. If your speaking voice does not lend itself to this, have someone do it for you. Above all, be sure your voice mail level is highly energetic.
2. When preparing a script, stay away from conventional clichés. They don’t help and they come off as amateurish.
3. Keep your greeting message short, simple, yet upbeat.
4. Be sure you clearly state your (and your company) name.
5. If you apologize for not being available to take their call, don’t use the phrase “I’m sorry”. Instead say, “I regret I am not here to take your call personally”.
6. Ask for a detailed message and specify the time limit to leave the message.
7. Ask the caller to identify the time of the call and the best time to return the call.
8. Vary your message. Change it month-to-month and season-to-season. Some of our most successful clients require their personnel (and themselves) to change the message daily.
9. Provide easily accessible information if they want to call you personally (i.e. “I’m normally in my office between 8 AM and 10:30 AM daily if you wish to reach me personally”.)
10. A small company should have only a few “levels” of voice mail (i.e. “Press 1 for sales, Press 2 for customer service – - and – - Press 3 to speak with John Smith personally)
11. All your messages should be recorded by your phone system or computer. This will assist with both customer satisfaction, and follow-up. Like all efficient business systems, follow up is critical. Make a habit of responding to all messages as promptly as possible.
12. Many of our clients do not hesitate to leave their cell phone numbers on their voice mail. While you may be reticent to do so, this will increase the level of trust the prospect has in you.

Remember, voice mail does not replace personal contact. It is an option and it is unwise to use this option to replace personal contact or avoid incoming calls which are perceived as problematic.

On our latest home improvement webinar, we once again offered $100 to the customer who submitted the best idea that they intended to use as promptly as possible. We received our most responses to date, and wanted to showcase some of the best ones here:

“When training sales staff teach them that the REASON that potential customers have price objections to begin with is not the customer’s hang-up or problem.  NO!  It is the salesperson’s problem because in the presentation they didn’t show enough value to warrant that price!!  Everyone wants to play the blame game – - knowledge is power and I hope that just them knowing that in order to have fewer price objections, they need to work on their presentations (demonstrating features, benefits & value) to the point the people feel like:Hey, this is worth it, even if it is a bit expensive.”

“I will use the left brain/right brain explanation in my next sales meeting to illustrate the science behind the customers’ demeanor during a sit.  Many times we get caught up in our own thoughts thinking about what to say next.  If my reps can be conscious about what is going on in the psyche of the customer’s mind and give the proper amount of time for the thought process to shift back to the other side of the brain, the close will manifest itself and not have to be fought for.  This scientific explanation holds merit and gives my reps a reason to buy into this logic.”

“I sat in with a fellow remodeler and I will tell you the most important thing I took from this was that practice is very important. I am very aware of one-time closing and being quiet for the customer to respond; however, like the professionals in sports, practice is what makes you a professional,  and I have now committed to practice everyday with objections – - 15 minutes daily before I head out to work.”

“The ‘we always get 3 bids’ close was great. I have played the webinar recording for my sales guys and they liked much of the other info as well. We will be using this in our sales presentations.”

“Our top takeaways:

- Learn the needs of customers
- Learn how to properly overcome objections
- Prepare yourself for each sales presentation
- Know Your Product!”

“What I have already tried on a sales call is the 4 to 6 second pause after the “We got to think about it” statement.  I told the ‘Mr.’ that I appreciate that, then looked at the ‘Mrs.’ and asked what she thought. She was excited and ready to do it, however she allowed him to make the decision.  Their excuse was that they weren’t sure if they were going to stay in this house or retire to Branson, MO. in a year or so. I plan to re-listen to the webcast, because I know I did not execute this technique very well.  I really did find the session interesting and it reinforced techniques that I was taught years ago.  Thank you for doing this for all of us.”

“The best thing I got was the S.A.L.E.S. closing process. Some of it I have used, but the part about the SILENCE for 4-6 seconds was great in addition to the rest of the system!”

“The best idea I acquired from the home improvement webinar that I will use promptly is to lead the customer to overcome their own objections.”

“I feel the best piece of advice I received was how to overcome the objection ‘We want to get several more quotes’. I had never thought to approach it with using the power of assumption to get them to commit. (i.e. so if my competitor comes in with the same price you will call me for the job).”

“S-A-L-E-S particularly ‘eliminate’. Also the phrase ‘other than that, is there anything standing in the way of you owning and enjoying our product TODAY?’”

“What I remember most and will profit by is the S.A.L.E.S close (Silence, Affirm, Layer, Eliminate and Solve). Especially, the pause of 4-5 seconds waiting for the client to go from left brain to right brain and have them answer their own objection. We will be listening to this webinar over and over again till it becomes second nature. Thanks again.”

“Be advised that we effectively used the  ’3 price close’ in response to the homeowner saying they wanted to get 3 prices. The sales rep was a veteran of ours and a very good closer, this made him that much better!”

“I always enjoy hearing you talk about the sales process. The best idea I got from the webinar was the “S” in S.A.L.E.S. – silence, (which is hard when you know what they are about to say). I have started taking the advice and listening thoroughly to each customer’s response, then keeping silent for a few more seconds before I respond.”

“What I took away from this home improvement webinar is how important it is to enter as much data as possible. I am just learning this system and have made it clear to the rest of the staff who have not been using it properly. Thank you for having these webinars. I have gone through some of the past ones as well. It makes learning much easier.”

“The best idea that I acquired from the “Overcoming Objections” webinar was isolating the objection.  Our salespeople are going to implement that idea whenever a customer states an objection, by asking “Is there anything else that will prevent you from buying our product from us today?”

“I am certainly going to use the idea of pausing for up to 8 seconds before responding.  I am a very quick thinker and often respond too quickly to what the homeowner says.  This one technique alone should bring an additional sale per month at a minimum.”

“The one thing that sticks out in my mind was the silence between the questions or answers from the customer.  I have implemented that in my life about 50% of the time so far.  I am trying harder to understand that it will take a full 30-40 days before I have it down without consciously working at it. Thanks for the tip.”

For more information on our sales methodology, download our complimentary mp3 on in-home selling or learn more about our upcoming sales seminars.

Our latest home improvement webinar on overcoming sales objections has generated a ton of response and we will attempt to answer many of your questions in this forum:

Q: Will the techniques you suggest in “The Science of Successful In-Home Selling” be effective when used on the telephone?

A: Essentially, yes – keep in mind you don’t have “face to face” contact, however, the pauses which we recommend for objections are still effective.  In responding to an objection or complex issue you might simply say,  “Hmm…” or “Let me see”.  Pause and then ask a question in response (Who – What – Where – When – Why?).  Use affirmations such as, “Thank you for bringing that to our attention.” or “We appreciate your interest – patience – etc.”  You’ll know when you are being effective when the note paper in front of you has abundant information which will help you solve problems for the caller, leads you to setting an appointment, or satisfies a customer service issue.

Q: What I am trying to do is implement some of these processes into our canvassing department.  We do follow the “affirm, layer, and eliminate” process. How would you recommend that we facilitate silence while at the door?

A: Preface the silence with a simple expression such as: “I see” or “Uh hum”.  You might cup your chin in your hand after the four to six second pause and answer with a question “Why is that?” “Who will (or normally does) make those decisions?” or “Do I understand that…?”  These and similar questions show a care and interest in what is being said.  They tend to build rapport as well.

Q: Please give more canned answers to common objections.

A: There are no “canned answers” – - there are simplified methods.  But first remember what you may be considering common objections such as: “ We want to think about it” “We’ll get back to you” or “We always get three estimates” are not objections but are procrastination statements or even part of a buying tactic.

It is usually best to uncover these statements/tactics “early on” sometime during or right after a needs assessment.  That may not eliminate that you will hear a few of these at the end of your presentation.  You need to review the home improvement webinar again.  Remember, as you develop this technique effective response methods go something like this:

Your response: “I see” or “I understand” or “No problem”. (Pause for their response – then add) I need your help. Can you tell me… (add a who, what, where, when, or why question).  Remember it needs some practice.

Q: I understand the S.A.L.E.S. process but I just get confused on how you go from those non-sequitur statements into a presentation without coming off too overbearing or saying: “I know you’re not just here to look around.”

A: Respond to all non-sequitur statements with a smile and a response such as “ No problem ” or “I understand”. Remember, you are not agreeing that their premise is correct, you are telling them you understand what they are saying and that you respect their values. Many of these “non-sequiturs” come early in your presentation and require no more response than I have given you here.  Later in the presentation your response might change somewhat.

As an example, the prospect says: “We always get three estimates”.  Your response: “No problem” or “I understand”.  Then say: “Why will it be three estimates??”  The response will lead you to their insecurity, their buying tactics, what they may be covering up, etc.  Think about it.  Why three?? Why not five? Why not two?  While it may be that this is their practice, for the most part they are repeating what they have heard from some source.  Their response to your questions may unearth the real reason they aren’t buying and your sales approach may vary.

Q: I just got this email from a customer:  I’ve slept on it and decided not to proceed . . . you guys are great but I’ve decided. Anything I can do?

A: Your response should start this way:

Thank you for your courtesy in advising us and we truly appreciate the amount of time we were granted and the opportunity to have been considered.  May I ask a question, please?  First, have you in fact entered into a contract with someone else?

(If not, proceed as follows) – Did you make any major changes in the project (increase or decrease in the size of it) or zero in on any particular product?

(Then, whatever the answer, proceed as follows) – It sounds like you gave thoughtful consideration to who you want to complete your project.  Can you tell me what made you decide against our product or company?

(Listen carefully and whatever information is provided say as follows) - Mr. Jones, I know this is an important project and before you sign a contract with someone else let me review the contract in my office and let me stop by for 10 or 15 minutes to make sure I priced the project and specified correctly what you wanted done.  It won’t take long and if you have decided to go with another contractor it might be helpful if I add a thought or idea that may lend assistance in getting this completed by others.

The purpose of the latter is to get one more opportunity to be with these prospects and determine if there is one more way, one more idea, or some other option that allows you to get back to the “being considered mode”.

Keep an eye out for more questions and answers from the latest webinar…

On our most recent home improvement webinar, we offered $100 to the customer who submitted the best idea that they intended to use as promptly as possible. We received a wealth of responses, and wanted to showcase some of the best ones here:

“If you really are number one in your area, then you have to be number one: everything about how you do business needs to say we’re number one – - without using those words.”

“Thank you for pointing out the importance of tracking a lead. From rating it, to following up with it. In the past I would receive a lead, price it, then just hope to hear back from them.”

“Best idea from the webinar is rehashing.  Our company lost sales/money due to management not rehashing appointments to see what happen during presentations.  Shame on us!”

“The countless ideas presented by yourselves which translate into opportunities to modify, enhance and improve for the betterment of our company’s moral and bottom line.”

“Post show – - I will host a seminar in our showroom for all those couples who booked an “in home appointment” but then cancelled.”

“I found the webinar to be very informative, forward thinking and helpful! I thought the energy level and enthusiasm was refreshing! Thanks for the invite!”

“The best idea I came away with from the most recent Yoho seminar would have to be what David Alan Yoho was saying about the home shows and canvassing, from attire to approach and time spent with customers at the show.”

“We have recently acquired a lease option that will open previous leads that couldn’t come up with the necessary funding for a solar system. The take away from the home improvement webinar on how to best reach them is the three part approach: phone call, snail mail, email which we are using to great success.”

“I will be organizing a window seminar at our showroom to generate sales of “rehash” & new leads.”

“The concept I’m taking from the webinar and applying is: not quoting people at shows. Don’t quote – - set up an appointment, and then SELL!”

“The act of sending an immediate email to confirm show leads was very compelling. This will be implemented immediately on all leads in our business. Thanks so much for such an educational webinar.”

“I got a lot out of the canvassing portion of the program. We are going to get more into it this year and the info that was shared was great. I like the part about controlling the herd and not giving up too much information up front. This is hard to do and training is key.”

“The number one point I took away to increase my chances for profitability is rehashing. Not rehashing can be a costly mistake.”

“Loved the ‘nugget’ of following back up on a lead with a second person who can check procedures and flush out/fix the concerns of the customer.”

“We will be implementing the pre-appointment auto-email, as David said – - keeping up with today’s times!  Just need to find a way to do it within minutes of setting.  Thanks!”

“I will be applying the “it depends” response to deflect the price question immediately.”

“I am energized to get to our next home and remodeling show to set up more in home demos.  2012 is going to be great.”

“The more information given to a potential client = the less likely they are going to want a demo.  We have seen this in the past but never really gave much thought as to why people appeared to be satisfied and uninterested in scheduling an appointment after speaking to them for a long time.  We want to develop a script that does not contain a lot of “information”, but creates interest in wanting to meet with us to learn more.  Selling the meeting and not the product during the initial face to face interaction! Thanks again for a great home improvement webinar.  We look forward to more great advice from you and your associates!”

“We will improve our appointment follow up process to include an email with hyperlinks to tell customers our company story and provide additional product information.”

Thank you for providing our company with some much needed advice. We look forward to meeting you at the Home Improvement Profitability Tour in Atlanta. The one idea that I took away from the webinar that I will use today is sending a confirmation email to all set appointments. As soon as David Alan Yoho said it the light bulb came on – THANKS!”

“Love the Revenue Recovery Program. We are just remodeling our office, with a new conference and technology area for customers. We will implement!”

“Sixty percent of prospects will not buy now, but rather hold off and buy within one year.  Follow-up is KEY!”

Our next complimentary webinar is scheduled for March 13th and will be devoted to overcoming objections while in the home. You won’t want to miss it – - we plan on doing the $100 giveaway again!

A major consideration in evaluating the worth of a home improvement lead is its lifespan.  To understand this phenomenon, let’s examine what created the lead in the first place.  While leads for many products and services come from prospects that recognize need and urgency, a high percentage also come from those who spontaneously respond to something they’ve seen or heard.  Therefore, most of those prospects acted on impulse.

Keep two things in mind.  First, lead costs continue to escalate, therefore it is important to develop leads at a lower cost and use them more effectively.  Secondly, you may consciously or unconsciously be killing leads which might otherwise become productive.  As the comic strip character Pogo states to his friends in the swamp: “We have found the enemy and it is us.”

Prior to giving some actual data on this lifespan, I want to be clear on defining the differences between two words that are often viewed as synonyms – - prospects and leads.

A prospect is someone who can use your product or service. If you have found a way to get someone to respond to your marketing devices thereby acknowledging their need, you have a prospect which you can identify for lead purposes. If they do not respond to your marketing devices or that of others they are nonetheless a prospect and will remain so until someone gets them to acknowledge their need and sells them.  You will notice the word want does not appear in this explanation.  There is more than a grammatical difference.  Someone may want to see your product or “get a price”, yet so far nothing has prompted them to respond.  Essentially, they have not been able to determine their need.

What is a lead?  The definition is often as simple as a prospect calling for an estimate, sending in a reply card, or approaching your booth at a show and asking someone to visit their home.  At other times, the lead is deeply hidden in a customer’s response for information, with phrases such as “Give me an idea of how they work” or “Send me some information or a brochure”.  To make this more complex, the prospect may make statements such as “We’re not going to buy now” or “Under no circumstances are we ready to do business”.  These leads become complicated because of the way in which we as humans interpret that language and then qualify in our own mind the value of the lead.

When salespeople raise the issue of good vs. bad leads, or marketers refer to qualified vs. unqualified, they are usually defining this by their value system.  The truth is that the difference between a good and a bad lead is usually the way it is handled by both lead intake and the salesperson.

I do not deny that some leads are easier to work than others; yet a good prospect inefficiently handled may turn up in the salesperson’s category as a weak or poor lead.  Which brings me to the issue of nebulous leads.  Successful marketers create this kind of lead by exhorting prospects to “use this sample”, “visit our website for…”, or “read this free information about…” The word nebulous by definition means “indefinite”.  This is a prospect who may need what you have to sell, but hasn’t yet identified a want. This type of “lead getting” brings the less committed prospect to the table.  While this prospect may not have identified your product as a need, this also means that you probably won’t have a lot of competition when you make your presentation.

Individuals responding to this technique are prospects for the product which lies behind the solicitation.  The lead, once received, requires finessing beyond that of the prospect who says “Give us a price” or “Give us an estimate”.  Nonetheless, this prospect is identifying themselves as a potential customer, because they are someone who needs or can use the products you sell.

Converting this nebulous lead to an appointment requires a scripted appointment setter and some adjustments in your sales methods.  In today’s economy, nebulous leads represent a great potential.  They can be the key to lowering your unnecessarily high lead costs.

We will now tackle many of the questions that we received on shows and events in our latest home improvement webinar on leads. If you haven’t already read done so, please read the previous posting where we also address many of these questions.

1.  What role do scripts play (pros & cons)?

Almost anyone can sell more when they don’t have to think about what to say next. Scripts enable people to be present –“to” and focus “on” the customer’s interests and welfare. Scripts work best when they utilize a methodology in outline form. Essentially, this means a sequence of steps based on the customer’s decision making process. The scripts or “what to say” element is utilized at a more effective level when the user of the script understands the reason for the technique. Understanding that process and integrating it faithfully enables the sales professional to “own” the material and better teach it to others.

2.  Why do most scripts for lead intake and “appointment setting” fail?

Some reasons for failure include:

• They aren’t written based on the customer’s mindset
• They utilize weak language
• No-one has conducted a valid test on the script’s efficiency
• You hired the wrong people to perform the tasks
• There is too much blather (war stories and anecdotes)
• The personnel has received little or poor training.

Rarely is it just one thing, and sometimes it may be all of the above.

3.  If a company develops 75 leads at a home show and has 6 salespeople how do they handle the abundance?  How far out should they set the leads?

I’m not taking your concerns lightly, however this is a great problem to have.

By far, the worst outcome is when you’ve scheduled many appointments, yet you lose business to other companies who get there sooner than you do. Setting leads “far out” means that many will have to be rescheduled or will die because interest wanes along with whatever emotion caused them to schedule with your company in the first place.

A frequent decision is to qualify most of these leads “tighter” than usual. While this works, it most frequently has several negative results – those leads which don’t qualify become lost opportunities which those in your company would have been glad to have when there were fewer leads.  In addition, the salesperson receiving the lead which is/was “more qualified” will want to accept this as the norm and won’t want to return to those leads perceived as “less qualified”.  In short, every time you relax standards, it’s difficult to return everyone to them.

Wise managers utilize abundant leads (as in your question) as an opportunity to set weekend appointments and also to search for opportunities for daytime appointments where the sales manager and owner can “dig in” and agree to cover 6 or 7 leads each.

In short, you invested in lead development, you have an abundance of leads and the entire sales department has to be conditioned to make more presentations while this abundance exists.  Caution: if your salespeople are used to receiving 6 or 7 leads per week and you suddenly give them 14, they will not make more sales, they will become more selective as to who they want to make a presentation to (also called over-qualifying).

Our next home improvement webinar will be in early March, and we will send a notice out when the date has been set. I look forward to our future interactions.

Our latest home improvement webinar on leads brought together over 900 companies to help turn leads into sales in the year 2012.

As is the case with most of our programs, we have an abundance of questions that were not able to be addressed on the webinar. We will also answer many of these in our monthly e-newsletter (you can sign up today on our website).

Questions on Shows, Events, and Showrooms:

1.  How do I keep my full-time people busy? There aren’t enough events.

Full time people can also work mall displays — radiate around recent installations – work on Quality Control programs that provide referrals (business now and later). There’s lots of prep, legwork and maintenance work for them too, especially as your department grows.

2.  In your seminars I’ve heard you say “no chairs” in the work area. Our people get tired and they sneak them in – - what should I do?

You have to check on them yourself frequently, or through a small group of mystery shoppers.  Hire part time men or women who can complete an 8-10 point survey after visiting your booth/display – also let your promoters know that they are being shopped – (it’s like putting a radar sign on the highway – most cars will slow down even if no actual radar is present).  I know this rule may be difficult to enforce, but it is a key ingredient to make your presence at a show more profitable.

3.  How do you avoid giving a price when they walk over to our window sample and ask “How much is this one”?

Usually the prospect does that when they’ve already asked for a “ballpark figure” and were given an explanation about why the price would be delivered in person after evaluating their project.

You could paraphrase the original “depends” response as follows:

“The price of (your product) would depend on the options you chose along with the quantity, sizes and colors – of course – once our representative sees the condition of your (current product), he’ll know what we need to do to order the proper (your product) and install it properly, meeting the conditions existing in your home.  In addition, he’ll be able to deliver a price in writing and as I have mentioned- that price will be good for one full year – may I make a suggestion? (Take control – get to the next step—search for the best time and circumstances to visit – set appointment.)

Questions on Canvassing:

1.  How do I find good canvassers?

A: Recruit and hire regularly using 5-10 sources with a well planned sequence enabling you to identify fearless optimists or manageable mavericks whose current lifestyle is congruent with earning fairly good money in only a few hours daily.  It is the kind of job that will appeal to many different circumstances.

Many of our clients hire college students as canvassers and those individuals who need a second income.  They also hire retired or semi-retired people – in short “people with available time”.  But don’t forget, we suggest the use of a behavioral profile to determine whether the canvasser being hired has a behavior adapt able to this sales support role.  Many of our clients hire canvassers who then become highly successful in that role and they find it good basic training for an actual sales position.

2.  Can I pay canvassers on straight commission?

Yes, but statistically – employee retention is better when paying a base salary PLUS incentives. There are very few stable individuals who can use their own car, work alone despite the weather then deal with the face-to-face “turn down” rate, which is common in this role, even when they are paid a high commission rate. Reminder: strong management (supervision) is the key.

3.  Vans are expensive. It’s a lot less money to send them out in their own cars. Why can’t I do that?

A: They don’t show up or they arrive late or get lost, leave early and give up easier. Sometimes they have friends accompany them. That could jeopardize your plan, create insurance risks for your company and other problematic exposures.

Check out reliable used vans.  They are less expensive than you think.

We will address more of your questions in the next blog posting, and we invite you to give the home improvement webinar another listen. The material that was covered takes constant reinforcement.

Happiness is – positive cash flow – or as a humorist once stated, “the problem is too much month at the end of the money.”  A common problem affecting small to moderate size businesses is cash flow.  If you are expanding or doing less business, it will be a major factor.

Good cash management depends on a business plan and a marketing model which aids in the regulation of cash.  For example, a successful company may employ various forms of lead development, all of which require cash outlay.  Marketing dollars are spent; sales are made then processed, followed by an installation (which may be weeks or months later) – this creates an investment in your backlog.  If you advance your salespeople on sales made and approved, you have increased your investment, both of which could represent 10 to 20% (minimally) of the sales being processed.

For the latter reason alone you need controlled policies for taking deposits on all contracts; as an example, require deposits on all sales (usually 40% of or more).  For corporations, they are (mostly) treated as liabilities and represent no tax consequences until a contract is completed. (Deposits on sales made to homeowners are regulated in some states. Progressive payments on larger contracts or those with multiple products or services including payments upon delivery or partial completion also speed up the collection process and enhance cash flow.

It is not uncommon to examine the operating statement of successful companies and find that despite the fact that they are profitable, they don’t have sufficient capital to pay their bills on time, pay adequate compensation to the owner(s) or to expand their business.

Learn how to read a balance sheet (your accountant can show you how).  Have your bookkeeper prepare a “cash report” weekly.  Understanding these two bookkeeping assets will help you avoid making mistakes in spending.

If you haven’t done so already, convert from weekly to biweekly payroll. This will increase your cash on hand by the value of one week’s payroll and reduce bookkeeping entries from 52 to 26 times annually.  Modern companies no longer pay weekly (you will need a plan to introduce this to your employees if they are used to being paid weekly).

Here are some additional suggestions to aid you/your company in creating positive cash flow.

1. Spend less money than you take in (good economics) – If you have a monthly, quarterly or annual budget based on anticipated business and anticipated net profit, spending less than what you earn enables you to accumulate cash.
2. Decrease your “turn time” – This is the amount of time it takes you to complete and collect a contract once it has been approved.  Here is an example: If it takes 6 weeks to complete a “job,” 48 weeks* divided by 6 weeks equals 8 turns per year. So, the more times you can turn your money in a given year will reduce the amount of cash necessary to operate your business. (* 52 wks less “lost” time and holidays).
3. Pay your bills on time (and attempt to get a discount for prompt payments) - A 2% discount for prompt payment on the 10^th of each month will earn you 37% when compounded annually.  You could actually borrow money at 6 to 8% to pay your bills on time and that loan would earn you big dollars in return.
4. Utilize “Cut-off dates” on purchasing. If you purchase from a vendor/supplier who offers 30 days (terms), and sends a statement at the beginning of a new month for all shipments made through the 27^th day of the preceding month, place large orders after the 27^th and/or in the first week of the new month.  Use a credit card and extend the payment due date by another 30 days.
5. Don’t employ checkbook management – Do not make purchases based on the amount of money in the checking account.  Use your balance sheet or a cash flow statement to determine cash availability.
6. Reduce your accounts receivables – Collect all balances on the day the work is substantially completed and collect for all change orders or extras when they are executed.
7. Give discounts for prompt payment – On cash contracts create a phrase such as – “The balance of $xxx is due on the day the specified work is substantially completed.  If paid on the date of invoice, which shall be considered the day of completion, the customer shall be entitled to a discount of x%.  Balances paid after that date are subject to interest at the rate of x%.
8. Cost avoidance – Postpone spending whenever possible, but not if the postponement would cause an increase later. (i.e. equipment maintenance).
9. Cost elimination – Do away with operations that aren’t profitable or are only marginally productive (i.e. products or outmoded procedures).  Every company has a few “sleepers” and “sacred cows”.  Get rid of them.
10. Cost reduction – Set measurable goals and monitor them.  The worst mistake you can make is to enforce an across-the-board percentage cut in costs.  It’s unfair, impractical, and in the long run, ineffective.

These changes are not complicated, but they do require thought and discipline, and they represent the keys to increasing cash flow.

For complete information on this and a wealth of other business management material, check out our recorded package How to Run a Profitable (or More Profitable) Business.

Closing the sale is not something that happens at the end of a sales presentation or after you’ve given the price.  It is an ongoing process which is established with your first contact with a prospect.

If you knew what the prospect was really thinking, what their planning strategies were or even the extent of your competition, imagine how much better your sales presentation would proceed. Much of this information is available with proper in-home sales basics.

The “walk around” to evaluate the project is better named a “needs assessment”.

• When did the prospect first consider the project?
• What prompted them to call you?
• What other options have they considered?
• How long have they owned the home?
• What other home improvement projects have they completed?  What were the outcomes?
• What do they really know about products such as yours and how closely have they examined the conditions which prompt them to call you for replacement?

Becoming privy to this information is largely a matter of good in-home sales training.  Having this knowledge enables you to present your products/services in a manner consistent with their values.  If you haven’t allotted fifteen to twenty minutes minimally to the walk around and needs assessment, I guarantee the delivery of your company story or product presentation does not address itself to the needs of your prospect. This makes you a “generalist” whereas you are seeking to be perceived as a “specialist”.

Next, consider the issue of rapport which is actually a state of mind; it starts with feelings.  Prospects listen more to people who in turn listen to them.  Prospects like people who seem to have the same values or seem to agree with them.  And most of all, prospects like people who seem to be like them.  This is not a call to be an actor or to lie about your political, religious or ethnic leanings.  Rapport stems from gathering information and then presenting your product in a manner which makes others feel comfortable and to listen more accurately to what you are saying.  A noted psychologist states it this way: “when you take the representational information that someone hands you and feed it back to them it tends to rapidly create rapport.”

Remember, closing the sale is the natural conclusion to the satisfactory completion of each step in the sound selling system.  Don’t miss the basics.