Tips to Help Contractors Get Business in a Tight Economy

Homeowners are hanging on to their money and paying off debt, property managers are on tighter and tighter budgets as vacancy rates rise, and your business depends on getting prospects in either or both groups to hire you so you can maintain or grow your company, keep your employees paid, and meet all your financial obligations.

To help, Pavement Maintenance & Reconstruction contacted a number of experts to learn some of the steps you can take to get the work you need.

Rely on your sales files. Contractors often have files that go back many years, and Brad Humphrey, Pinnacle Development Group, says contractors frequently "forget" to contact these past customers as the contractor emphasizes new blood. "So look at customers you did work for maybe five or 10 years ago and that you haven't done work for since. Find out if they're still in business, confirm the primary contact, and create a new list for your salespeople to work."

Guy Gruenberg, Grow Consulting, adds that simply by updating your customer files you will end up with bid opportunities. "Go back 10 years in your files and contact every single customer in your list," Gruenberg says. "Tell them you're just updating your records, and let them know what your company does now. Obtain the updated information, including contact name and e-mail address, and I'll bet that if you make 60 calls a day you'll get four to six people who want you to come out and check out a problem."

And, Gruenberg says, don't forget to send a follow-up note to that new e-mail address.

Get the owner out with customers. Owners make an impact, it's as simple as that, so in tough economic times if the owner of the company can make a solid impression with a prospect, why not get the owner out there making sales calls, giving presentations, and glad handing?

Subcontract. You can subcontract work to other contractors and you can be a subcontractor for other contractors - and once you start, work often flows both directions. "Subcontracting provides a give and take," says Nick Howell, T&N Asphalt Services and a member of the Pavement Advisory Board. "It can even keep you busy enough not to have to market."

Howell adds contractors shouldn't be afraid to give subcontracting a try. "When I first started I felt I had to do every bit of everything, but I learned that subcontracting can make you more efficient and in the long run more profitable because you can be more efficient."

Bid on everything. "If a property manager calls I bid everything he needs, whether we perform that work or not," says Bob Paradise, Paradise Asphalt Maintenance and a Pavement Advisory Board member. "I tell him up front that we don't do everything - we don't do large overlays, for example - but I bid it and sub it out to some paving contractors who do good work, and they in turn sub work to me. They don't want to crackseal, for example, and we don't want to do large overlays, so it works."

Diversify. The financial barrier to entry into many aspects of pavement maintenance is low, so diversification is open to almost all contractors. Humphrey cautions, however, that contractors should know what they want to do and why they are adding a service to their business. "You need to have a vision," he says. "If you don't you're not going to do a good job at it, and if you're adding a service you need to add it in a quality way."

But first determine if your market needs the service you want to add. Humphrey stresses that it's important the new service enhance and not in any way damage your reputation, so a contractor adding striping, for example, should research and study to make sure she knows how to do it. Other options are to hire an expert striper or establish a subcontracting relationship with a striper.

Consider vanity phone numbers. These "800" numbers (such as 1-800-PAVEMENT and 1-800-ASPHALT) follow a formula tested successfully in a variety of other industries where a contractor leases the "800" number for one or more area codes, then people calling the number within that area code are routed to the contractor's office.