Recharge Your Business in a Tough Economy

The housing market may have crashed, but what about your business? Is the work still there even though new construction is not?

Tim Ostrander, owner of Tim’s Custom Electric in Richfield, Ohio, certainly thinks so. After working five years as a self-employed electrician, he’s bringing on more new clients than ever before, despite the recession.

“Not only are we doing a lot of the remodeling jobs out there, but we are one of the only companies in our area still doing new construction,” Ostrander says.

What’s the secret behind this success? For many professional electricians, all it takes is a little research, a little conversation and the flexibility to widen your work scope to accommodate a variety of jobs.

Reading your audience
While Ostrander’s growing list of clients is more budget conscious than ever before, he says he’s busier now than prior to the crash.

“Honestly, the best thing I ever did was label my work vans two years ago,” says the owner, who makes sure his company’s name and contact information is prominently displayed on his vehicles. More importantly, Ostrander says he started running print advertisements in a community magazine widely read by Richfield residents and members of the surrounding community.

“Within the first week, I had 10 phone calls,” he says. “People said they didn’t even know there was an electrician in this town.”

Given his geographic locale, Ostrander intelligently played into the preferences of his potential client pool. On jobs, he took notice of what people were reading and asked questions on how they obtained their information. What he noticed was that many people were reading one particular magazine cover-to-cover. So, instead of gravitating to online advertisements and postings—or even the more common direct mail fliers—Ostrander invested all of his advertising dollars into that magazine and has garnered consistent results.

Diversify your book
But being too pointed can have its drawbacks—especially when it comes to your book of business. In Warner Robins, Ga., James Pounds, owner of Ace Electrical Service, has kept his business steady by diversifying the types of jobs he accepts.

He says that because the industry is divided into three sectors—new construction, commercial and industrial gigs—many shy away from smaller, service contracts. These can range from remodeling jobs on the residential side to work for banks, department stores and even churches on the commercial side.

Pounds says he kept his service contracts active since going into business for himself 15 years ago.

“Two years ago I was doing a lot of new construction,” he recalls. “But I was also maintaining my service business. For any contractor to survive today he must be versatile; you can’t rely on one area of the business.”

For those contractors just beginning to diversify their business through service contracts, Pounds recommends writing a business plan and presenting it to the potential client. Once in place, it can be modified to fit the needs of a specific contract.

“Set aside some time to meet with potential customers, let them know what you can do and keep your prices moderate,” Pounds advises.

Connect and converse
While contractors should remain mindful of their prices in rough economic times, they should also refrain from underpricing their services. When business was more stable, Pounds offered free estimates to customers on potential job sites. But recently, he began charging a minimum fee that is eventually deducted from the total contract, provided he wins the work. Now if he doesn’t get the job, the other party pays out of pocket.

“We compete with a lot of big companies out there, and it’s not that I’m undercutting them—I’m setting my price,” Pounds says. “Just because I am an independent contractor doesn’t mean I would charge the same as a nationwide contractor.”

Back in Richfield, Ostrander literally goes the extra mile for his clients by traveling as far away as 45 miles for a simple job. His combined fairness, consistency and willingness to return a phone call have kept him one of the most sought after contractors in the area.

“Never say no to people, and be as fair as you can,” he advises.

Ostrander gets additional support from the local chapter of Business Network International (BNI), which includes 24 independent business owners. Each week, members meet and give 60 second advertisements of ideas they want to convey to their customers. With each business owner’s client base and services clearly defined, fellow BNI members can refer him/her to others in the community.
 
“Everyone looks out for everyone else and tries to get one another jobs,” he says. “It’s an international system that works really well in this environment.”