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How Profitable is Masonry Business
Starting a business that specializes in small masonry repairs can be extremely profitable.
Many of the larger masonry companies cannot service small masonry repair jobs as their overhead requires larger masonry contracts to provide adequate cash flow.
This fact creates a terrific opportunity to capitalize by specializing in small masonry repairs such as brick repointing, concrete step and sidewalk repairs, and the installation of stone and brick fireplaces.
1. Choose an idea.
It might be a product you’ve always wanted to make, or a service you feel people need. It might even be something people don’t know they need yet, because it hasn’t been invented!
- It can be helpful to have people who are bright and creative join you for a casual brainstorming session. Start with a simple question like: “What shall we do?” The idea is not to create a business plan, just to generate potential ideas. Many of the ideas will be duds, and there will be quite a few ordinary ones, but a few may emerge that have real potential.
- Consider your talents, experience, and knowledge when selecting a concept. If you have a particular skill set or talent, consider how these resources can be applied to meeting some sort of market demand. Combining skill and knowledge with a market demand increases your odds of having a successful business idea.
- For example, you may have worked with electronics as an employee for many years. You may have noticed a demand in your community for a particular form of electrical work, and combining your experience with the market demand can allow you to attract customers.
How Profitable is Masonry Business
2. Define your goals.
Do you want financial independence, eventually selling your business to the highest bidder? Do you want something small and sustainable, that you love doing and from which you want to derive a steady income? These are the things that are good to know very early on.
3. Create a working name.
You could even do this before you have an idea for the business, and if the name is good, you may find it helps you define your business idea. As your plan grows, and things begin to take shape, the perfect name may come to you, but don’t let that hinder you in the early phases. Create a name that you can use while you plan and don’t hesitate to change it later.
- Always check to see if the name is being used by somebody else before selecting it. Try to create a name that is simple and memorable.
Tip: Think of popular brand names like “Apple“. These names are memorable, simple, and easy to pronounce.
How Profitable is Masonry Business
4. Define your team.
Will you do this alone, or will you bring in one or two trusted friends to join you?
This brings a lot of synergy to the table, as people bounce ideas off each other.
Two people together can often create something that is greater than the sum of the two separate parts.
- Think of some of the biggest success stories in recent times, such as John Lennon and Paul McCartney; Bill Gates and Paul Allen; Steve Jobs and Steve Wozniak; and Larry Page and Sergey Brin. In every case, the partnership brought out the best in both sides of the equation.
- Think about the areas that you are either weak in, or have little knowledge of. Finding partners compatible with your personality who can fill in your knowledge or skill gaps is an excellent way to ensure your business has the resources you need to succeed.
5. When you buy a business there are always things that can be done better.
If the previous owners did things perfectly then they would have been making huge amounts of profit and wouldn’t have sold the business to you.
In this article we will show you how you can quickly improve the balance sheet and make the business much more profitable.
Take two hours with your best business partner, mentor or advisor and work out how you can adapt your your business plan and implement the majority of the following:-
6. Put up prices by 3% or more
This creates more profit (per sale). Now if you sell exactly the same number of products as before, both your turnover and your profits have increased.
How Profitable is Masonry Business
7. Decrease direct costs by 3% or more
Go to all your suppliers and ask them for a better price… ask “Is that the best you can do?” and say nothing till they come up with a better price. Now you are making even more profit per sale.
8. Sack underperforming suppliers, customers and staff as appropriate.
This gets rid of the suppliers, customers and employees who make the working day more stressful. This will create a better working environment for your team and remove any customers who are losing you money.
How Profitable is Masonry Business
9. Rethink the way you present the business
Start talking to your customers about what they get as a result of buying from you – what’s left after the purchase. Focus on the benefits that they gain from using your product or service. This will improve your sales performance.
10. Sort out your proposition or offer
What makes you different from the rest? Why should people buy from you rather than the competition? Be able to articulate the ‘why’ and ‘what’ of your business in a way that is truly effective. You should be able to do it in ten words or less.
How Profitable is Masonry Business
11. Get more leads, say, 10%
Go networking, get your business in the local paper, use Google Adwords, learn about social selling and low cost marketing, get up earlier, and talk to more people.
12. Get better at talking to people, asking for the business and closing the sale
Going on a decent sales course (and sending your team on one as well) will add 10% to each of the fundamental steps in the sales funnel. Improving by 10% in each of these areas will create 46% more customers.
13. Get customers to buy at least 3% more products
Once they have bought what they usually buy, suggest they purchase an additional product or service.
You can do this by upselling in store, or with suggested bag additions through ecommerce, or as part of your email strategy.
How Profitable is Masonry Business
14. Get customers to buy at least 3% more often
Encourage your customers to come back more often, start sending out a newsletter or social media campaign to get them to visit more often.
Check out tools like typeform or survey monkey for surveys, Google AdWords can be an incredible tool to target sales at specific customers through re-targeting too.
15. Stop them leaving
Run a customer survey right now – simply talking to existing and past customers will generate more business, I assure you. Most defectors are content but someone else came along who wanted their business more than you did …
How Profitable is Masonry Business
16. Collect money quicker, 10 days quicker
This will mean your bank balance will look healthier – your bank manager will like this and will be more willing to give you loans or overdrafts in the future.
17. Write cheques slower, 10 days slower
This will again mean your bank balance will look even healthier!
18. Decide on three things you can do right now, and which cost nothing, that you could do to get existing customers talking about you
Don’t procrastinate please. The faster you make the tough decisions and get on with it – the sooner you will see the positive results. Take massive action.
How Profitable is Masonry Business
19. Make a big difference to your balance sheet
These changes will make a big difference to your balance sheet.
Implementing these changes in a business that has a turnover of £100,000 and makes £30,000 profit per annum, If you run this model using pessimistic estimates it results in a turnover of £117,000 and the profits of £43,000! That’s a 40% increase in profits – the reality could be much more!
In reality, there may actually be a deeper, more subtle set of changes required of you.
It is one thing to recognize what needs to be done and it is great if you make the commitment to implementing the changes.
The problem is that as well as making the business decisions you also need to act upon them.
20. Create simple, easy to understand plans
Create simple, easy to understand plans and communicate them with clarity and passion.
Then take the massive action required to make the difference needed.
This is not about small, nervous, tentative steps but it is about boldness and passion – a great combination!
21. Speed up your design cycle.
One of our business coaching clients, LH Thomson, a manufacture of high end bicycle parts and products, cut their design cycle in half by working with a specialty engineering firm outside their company.
This allowed them to develop three times as many products in half the time, increasing their profits over 30 percent.
22. Eliminate tasks and activities that don’t add value to the company or customer.
Every dollar you save by eliminating the cost of things that don’t add value to your company or to your customer drops directly to your bottom line.
How Profitable is Masonry Business
23. Increase pricing.
If you bill hourly, review your billing rates and push them higher.
If you charge per product, look for ways you can command a higher price.
Could you bungle more value into a package?
Improve your marketing and sales scripting to effectively sell at a higher price?
Or could you just boldly increase your pricing?
How Profitable is Masonry Business
Most businesses set their prices when their business was first launched.
And since they were so hungry for business, they set pricing levels low.
Over time, the business likely only made nominal increases to pricing every few years.
But rarely did the owner ever sit down and fundamentally rethink his or her pricing model.
Well take a close look at your pricing now.
How Profitable is Masonry Business
24. Regularly review your administrative and operational staff levels closely.
Most service and administrative departments can be cut by 1 in 4 with no impact on quality of work. Many can handle 1 in 3 cut with no significant negative impact. I’m not suggesting you cut staff, instead I’m suggesting that you delay hiring admin and operational team as you grow. Let your revenues grow faster than your hiring.
25. Shorten your sales cycle.
How can you close your sale faster? This will decrease your sales cost per transaction and free up a lot of hidden cash flow that previously was locked up in your sales staff.
26. Increase the dollar value of every purchase transaction with your clients.
Ask, “How can I get each customer transaction to be for a larger dollar amount?” What upsells, cross sells, or resales could you strategically implement? What package offers could you test and introduce?
How Profitable is Masonry Business
27. Beware the steep cost of attrition.
Customer retention is a strategic expense if spent wisely. How can you increase your customer retention?
28. Feed your winning sales people more leads (even if that means you starve your lower performing sales people of leads.)
Audit the “$ value per company generated lead given to a sales person.” This is not a time to be “fair”, but to be strategic. If every lead you give to John is worth $2,100 and every lead you give to Sarah is worth $3,200, then you’ve got to take this into account when you divide leads. It costs your company $1,100 extra in lost sales for every lead you give to John instead of Sarah. Be transparent about this and let it be a spark to help John learn how to increase his own dollar value per company lead given to him.
29. Map out systems
Strategically map out systems to help your customer consume your product or service faster so that they get more value and hence repurchase more frequently.
Look for ways to educate them on the ideal use of your product or service.
30. Shift a cost from a fixed to a variable expense to give yourself greater flexibility.
This is a way to protect your cash flow. It is extremely important for unproven tactics and strategies. For example, pay per sale versus a guaranteed amount for an outside sales person.
31. Shift a cost from a variable to a fixed where the value is proven.
Make this shift only when you can negotiate a substantial price savings by doing so.
32. Consistently look for ways to lower your fixed overhead.
Scrutinize your base expenses to eliminate non-strategic expenses that just don’t add value to the company or to the customer.
How Profitable is Masonry Business
33. Negotiate hard.
Take the time to plan out your negotiation strategically. Create competition for your dollars. Create a list of concessions you want, with extras for you to trade off. Research the market to better understand the best deal you can expect. Even hire an experienced negotiator to help you make the purchase on the best price and terms you can. If the asset you’re buying for your business is large enough, the ROI on your negotiation work can be immense.
34. Get clear on all the costs of inventory:
Cost of capital; storage; insurance; etc.
This will help you make informed stocking levels.
35. Set optimal inventory levels and stick to them.
Constantly be on the lookout for ways to safely reduce your inventory levels. If you have inventory you’re unlikely to sell, scrap or donate it so that you can free up the space and write off the inventory.
How Profitable is Masonry Business
Conclusion
So there you have a quick list to increase your business’s profitability. How did it work out for Will of Wingspan Optics? He found fat to cut in his pay-per-click and sponsored products budget, branding consulting he wouldn’t need in 2018, ways to lower his inventory cost, and a strategy to protect his pricing strength in the market. All of these will likely add $400,000 or more of additional profit to his bottom-line in your business.
Finally, may I suggest that if you want more ideas on growing your business, including a free toolkit with 21 in-depth video trainings to help you scale your business and get your life back, just click here.
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