The Australian building industry crisis continues to intensify as thousands of jobs are expected to be cut by June in an attempt by construction companies to reduce their costs.
Due to the decreased demand for new homes, weak consumer confidence and stricter credit requirements, the building industry crisis continues to build well before its predicted recovery by 2013.
If your building and construction business is in trouble, it is crucial to take immediate action. You can still achieve a successful turnaround for your business by focusing on the areas of sales, operations and cash flow management. In this article, we take a closer look at the area of sales and how it can drive your business towards recovery.
Have a marketing strategy in place
You need to ensure that you have a very clear marketing strategy that results in strong lead generation. The more leads and potential customers you find, the better your chances of getting more contracts for jobs. Determine your target market and select the marketing tools that can effectively attract and convert your potential customers into new home owners.
If you are having a difficult time in developing a marketing strategy, consult with a building industry turnaround expert as they can assist you in designing and implementing an effective marketing strategy that can increase leads and signed contracts to grow your pipeline of work.
Use a costing template
Develop a precise costing template for quotes based on target gross profit required for each job and make it a standard template for your sales team to use when quoting potential customers. In this way, you can easily make a projection of your profit per signed contract.
Know your conversion rate
Know your conversion rate and your average lead time from lead to quote and then from quote to contract. You also need to know the average time from signing of contract to commencement of works on site and the average time it takes to complete a job. With target weekly invoicing already determined when the target cost structure was established, it will then be easier to calculate the following:
- Leads required each week, both number and value
- Quotes required each week, both number and value
- Contracts required each week, both number and value
- Value of Lead pipeline required
- Value of Quote pipeline required
- Value of Contract pipeline required
- Value of jobs in progress
Record and monitor these weekly and get your sales team to meet the weekly leads, quotes and contracts requirement.
Monitor the performance of your sales team
To achieve a sales driven recovery for your business, it is vital that your sales team is performing well. A good number to target is an average of $200,000 per sales agent, per month in signed contracts. Your sales agents must be spending most of their time on field calls, selling to potential customers. If any of your sales agents are not performing at these levels, then replace them with those who can meet targets and requirements. Remember, you need the best possible people on board to turnaround your business.
Some final words
As a company in financial trouble, you can drive sales and increase deposits and check measure payments which will strengthen your cash flow with very little in payments required to offset them. In ramping up progress claims fast, we usually find that the smaller the job the shorter the lead time to commencement of the job. So look for balance between smaller jobs and larger jobs to ensure you have smaller jobs that you can get underway quickly as well as the larger jobs which give you larger deposits and check measures but take longer to commence.
If you need professional help in implementing measures to turnaround your building and construction business, employ the services of a building industry turnaround specialist as they can provide business recovery solutions and work with you to bring your business back to profitability.