picture of a commercial business park

Identify Profitable Targets

05/15/24

If you were the owner of a NFL football team, your number one goal would be to fill the seats every week. To sell seats takes a multiple approach. You must put a winning product on the field and you must sell seats to many different types of fans. Seats don’t sell themselves. It takes a huge effort to create sellouts at profitable ticket prices.

Years ago, you didn’t have to sell very hard to keep profitable construction work and revenue flowing into your company. If your price was competitive enough and you put an average team out in the field, called the usual plays, and used a simple business strategy, your customers would keep coming back for more. Because business was plentiful, margins were higher and competition lower than it is now.  You didn’t have to try to win over many new customers to keep busy and make a nice profit. Since work was steady, you stayed focused on doing the same type of projects for the same type of customers, and your business still grew. Because there was enough work, you also didn’t have to try different or new types of projects, services, customers, or contract delivery methods.

Fast forward to today, and it’s harder to fill seats with high paying construction customers. Today’s customers are demanding more services but paying less money. Doing quality work with an experienced team doesn’t matter because your competition basically provides the same services you do at lower prices. During the slowdown, you cut your overhead and reduced your expenses as much as possible to survive. This now causes stress as your workload increases, customers require more services, and prices are too cheap to increase your markup. The outdated strategy of waiting for calls from your same old customers to bid their same type of work now doesn’t give you enough business at the same profit margin. So what must you now do to win the new game of contracting?

You’ve got to win more work at higher margins. By continuing to do business like you did in the past and using your old strategies to bid more of the same type of work won’t achieve your goals. For example, to keep revenue and jobs flowing in, many focused on only building housing tracts, or shopping centers, or industrial parks, or custom homes, or office building interiors. Some focused on building for general contractors, developers, or home builders. Some expanded and did more than one type of project. But, most didn’t cross over into totally different or diverse types of projects or customer types because it seemed too difficult or risky. And offering an ongoing service component to their revenue stream wasn’t even considered as they were too busy to mess with little jobs.

Multiple streams of income sell more seats

A diverse business plan includes at least two types of revenue streams with multiple types of projects and customers. Here is a partial list of the unlimited revenue and business opportunities contractors have to choose from:

Multiple Revenue Streams of Opportunities

1. Contracts and Bids

Private Construction

Retail shopping centers

National chain stores

Industrial buildings

Manufacturing and factories

Metal buildings

Office buildings

Banks

Medical buildings

Hospitals

Self-storage

Renovations

Interior improvements

Utility company projects

Housing tracts

Custom homes

Residential remodeling

Residential home upgrades

Residential replacement work

Site improvements

Public Works Construction

Schools

Offices

Hospitals

Facilities

Roads and highways

Transportation projects

Sewer and water projects

Storm-drain systems

Plants

2. Service Work and Ongoing Accounts

Ongoing Monthly or Annual Accounts

Property management

HVAC maintenance

Electrical maintenance

Plumbing maintenance

Landscape maintenance

Site service and management

Spring and winterization

Light bulb replacement

Roof service

Road and drainage repair work

Generator service

Energy management and controls

Repairs and Service to Fix Broken Components

Plumbing and mechanical repairs and upgrades

Window replacement

Tenant improvements

Tenant relocation

Carpet and flooring service

Building-damage repair

Clean-up and debris removal

Who do you want to sell tickets to

In order for a professional football team to sell tickets, they start with a list of targeted customers they want to go after. By determining exact targets to aim at, you can develop a plan to win more work. Of course, you can’t be successful by bidding any customer that offers you a set of plans against every other contractor who wants to bid. To create an effective sales program starts with determining what you want to accomplish. A football team wants to first sell their expensive private boxes. Then they want to sell to high-end season ticket holders, groups, individual season ticket holders, and multiple game plans. Lastly, they concentrate on selling individual game tickets.

Start with a focused, multiple approach. You already have a list of past customers and project types you have completed. In a tighter economy, those same targets are not enough. You MUST decide to diversify, attack, and seek business in multiple revenue streams. From each revenue stream, select at least one or two new customer and project types you want to attack. From the list above, choose new project and customer types you will go after over the next year to grow your business with diverse types of higher margin and steady paying customers.

Create a target customer list

Create and complete a customer target list you will attack. Start by identifying your existing, repeat, and past customers. Sort them by revenue stream and customer type. For each customer type, you need a minimum of at least six existing and six new customer targets to go after per customer and project type. Use this sample chart to develop your project and customer target list:

Contracts and Bids

Current Customer Targets

New Customer Targets

-

-

-

-

-

-

Current Project Types

New Project Types

-

-

-

-

-

-

Service Work and Ongoing Accounts

Current Customer Targets

New Customer Targets

-

-

-

-

-

-

Current Service Work

New Service Work

-

-

-

-

-

-

After determining what type of projects and customers you want to go after, develop specific goals for each customer and project type:

Sample Customer Target List Chart:

Project and Customer Goals

Project Types

Customer Targets

No. of Targets to Attack

Shopping Centers

Current Customer Targets

6

 

New Customer Targets

10

Banks

Current Customer Targets

5

 

New Customer Targets

12

New Project Types

Customer Targets

 

Army Corp. Work

New Customer Targets

4

Hospitals and Medical

New Customer Targets

10

Corporate Facilities

New Customer Targets

10

Service Work Goals

Service Work

Customer Targets

 

Building Repairs

Current Customer Targets

0

 

New Customer Targets

15

Annual Maintenance

Current Customer Targets

0

 

New Customer Targets

15

New customer targets are not hard to find. For example, if you want to target hospital and medical construction, do a Google search for hospitals and medical complexes in your market area. Call each one of them and ask for the manager in charge of facility construction, maintenance, improvements, or remodeling. With diligence, you can find the right person to call on at every hospital and medical facility. Get started on your new and improved revenue and profit enhancement program by identifying the new projects and customers you can go after and build a more profitable business.

Business - Commercial Real Estate Industry

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This article contains general information only. Sunflower Bank is not, by means of this article, rendering accounting, financial, investment, legal, tax, or other professional advice or services. This article is not a substitute for such professional advice or services, before making any decisions related to these matters, you should consult a qualified professional advisor.