The Bidding Advantage Part 2: Swept Chats with Ron Segura
Welcome to part two of our Q&A with the legendary Ron Segura. If you somehow missed the informative first part, you can find it here.
Today Ron shares his thoughts, ideas, and advice on a variety of topics. Namely; Proposals, the importance of strategy, the bidding process, and the importance of trust.
So thank you for joining us again, and we hope that you can take some great tidbits of wisdom from Ron and apply them directly to your life and business.
Q– When submitting your proposal, how much info with relation to your accomplishments should you make? Without sounding like you are bragging, how much tooting your own horn is considered good horn tooting?
A– Name recognition is never bad, especially if you have worked with large or notable companies in the past.
Just be sure that if you are sharing an accomplishment, that it really is a legitimate accomplishment. Everyone embellishes, that’s fine, everyone does it. Just be sure that you can back up any claims you make. There are many clients out there who will be happy to follow up on your claim. Because that could get very embarrassing, very fast. And that could potentially hurt your credibility.
Honestly the best kind of accolades, are the one that directly relate to your client’s needs. Those are the ones you’ll want to share the most.
Q– When it comes to bidding, it can become very aggressive out there, a “race to the bottom” as some would say. How can you possibly gain an advantage without literally putting yourself out of business?
A– For starters, if you are just starting out, those big companies, the ones where there is aggressive competition and low bidding, they probably aren’t for you. Now, on the other hand, if you’ve been in business a while, and you’ve got your costs under control, my suggestion is always:
Only do business with businesses that’ll allow you to make a profit. As a larger company, your profit margins may be smaller, but you are covering your costs, and taking that financial hit with the expectation of getting other business.
Sadly one of the biggest mistakes commercial cleaning companies get into when they get these low profit margin, big name contracts, is they forget to leverage that. I can’t stress enough how important it is to go into these situations with a strategy. If you plan around it, you’ll be able to even recoup those lost margin by money saved in sales and marketing costs. It always pays to have a strategy.
Q- What kind of goals should newer companies be setting for themselves within their first few years? Where would you ideally find yourself at the end of year one, year two, and year three?
A– Well, I’ll kick off by saying: Nobody starts out in this industry by saying “When I grow up, I want to start a cleaning company”
Instead, it usually happens because someone asks you one day: “Hey, do you know of any good companies that do cleaning?”, you ask why, and they say: “Well I’ve got this building that needs cleaning and it pays this much”, and you reply: “Well that’s not bad at all…let me see what I can do for you”
Before you know it, you’ve been in this business 15-20 years
The key to getting ahead is to have a strategy, just as I mentioned before, and set realistic goals. In your first year say, decide you want to pull in $250,000 a year. And if you make it to that $250,000 at the end of your first year, you’ll be happy. This will allow you to hire more workers, start a foundation for future growth, establish a relationship with suppliers, and they’ll start to extend you credit, and finally, learning more about this business.
The next year you can aim for half a million, and the year after that a million. Initially, in the first few years, you’ll be wearing all the hats, doing all the jobs. With every goal met, you’ll be taking off more and more of your hats. Delegating more and more of your jobs. Once that happens, you’ve successfully bought yourself even more time to grow your company.
Q- Can you give us some closing words of wisdom?
A– The most important thing is, do good work. If you don’t do good work, sure, you’ll always get jobs, but you’ll never build relationships. If you don’t do good work you’ll always be losing accounts, so you’ll always have to get accounts. So yeah, doing good work is important.
Secondly, collect your money. I know this seems kind of dumb, but its important. I hear this all the time. A smaller contractor puts out a lot of capitol, gets supplies, gets cleaners, wins a contract and then the customer doesn’t pay. Maybe 60 days, maybe 90 maybe 120 or more. I’ll ask:
“Why haven’t you called your customer to get paid?”,
and they always come back with:
“I don’t want to rock the boat. If I bother them about paying me, they may go back out to bid [find other companies]”.
My response in that situation is:
“you’d be more profitable if they did”
If you do good work, never hesitate to ask for your money. If your client doesn’t want to pay you, then they aren’t the kind of customer that you want to serve anyway.
A smart (not necessary, but smart) bit of advice would also be:
Build a good relationship with your distributor. You’ll find that even very large companies today still have a relationship with the first distributor they ever did business with. They may not be their primary vendor anymore, but they’ll always do a little business with them, because that supplier was the first to extend their credit… that supplier was the one that was there on a Saturday when the company ran out of product…that supplier was the one who provided them with professional training, especially if they were new to the business. That relationship will always have value.
So in closing, I hope if you take anything away, it is this:
Do good work, collect your money, build healthy, trusting relationships, and have a good support team. If you have this, you have everything you need.
Thank you for your time Ron.
Watch the webinar here