Ed Winslow, President of Metrocrete, just wrote an e-book, The Professional Contractors Guide to Prospering in Niche Markets. After working for years in decorative concrete and coatings, Ed found that most contractors just took business where they got it, with no business plan. That’s where The Guide comes in. Ed and I discussed his book in more detail:

Tell me about your book and who it’s written for.

“I started my real estate career in 1987 with CB Richard Ellis Commercial Real Estate. They taught a very specialized system to brokers. The system was based on product and geographic specialization. The system worked in every market. In 2000 I started investing in Real Estate and added a design/build business. I got into decorative concrete and coatings as an inexpensive curb appeal solution to rehabbing properties. I found that most contractors just took business where they got it, with no business plan. The book is written for any trade within Real Estate. I use Case Studies in The Guide of decorative concrete applicators, but it’s written for every contractor. I’m considering writing a version for Real Estate brokers.”

How did you gather your research?

“What inspired me to finally write The Guide was a marketing project (I’ve evolved to the Internet as well) I did for a company with a new coating. They developed a product for resurfacing concrete. Excellent product for floors over 1,500 square feet. The product is a one-day application, which is fine for small floors. They based their business on the one-day application. Problem is, small floors lose money. They never did the financial analysis to determine profitability. I realized they were doomed to failure because they were targeting the wrong market. Once I saw this I realized that the market needs The Guide.

“Here’s a company with a superior product and tremendous knowledge. They have exactly what it takes to be extremely successful, but they are targeting the wrong market. This is why I wrote The Guide. 99% of all contractors have the ability to be financially successful but don’t know how to go about it. The 99% of contractors who break even or fail have just as much talent as the successful 1% and work just as hard breaking even as the 1% who succeed.”

Tell me about the system for success that you describe in The Guide.

“The system is based on being the expert in a market. Let’s say a contractor identifies 75 Grocery anchored shopping centers. Now there are a few different kinds of shopping centers. I’m choosing Grocery anchored for a reason. Every successful investor specializes. So when it comes to Grocery anchored centers, there might be only 15-20 owners of the 75 targeted properties.

There is a good chance that the same property managers run the properties, the same architects, electricians, plumbers and frequently tenants. Many of the tenants are frequently local instead of national, so it’s easy to get to the owner. Now if a contractor stays focused and turns away all business other than the 75 properties, they will capture a large market share. They become much more efficient, they don’t have to travel far, they will control their expenses and manage their books easier because they have a specialized business.

Consider that 75 Grocery anchored centers have 20 tenants minimum per center, that’s 1,500 stores. 7% annual vacancy yields 100 new stores every year. You can see the program can work for architects, general contractors, flooring applicators, electricians. That’s how a contractor controls business. Another basic is that ‘people do business with those they like and trust.’
By specializing, contractors can charge a premium and still get the business because they have developed a relationship. Without a targeted plan every project is like the first. This strategy applies to every trade and market.

Specialization is a science and an art. It’s not hard when you know how but you have to know the process. It starts with the economics of a trade or specialty, then the target market like Grocery anchored centers or office buildings or single family homes. Learning to use the proper marketing tools properly, like newsletters, blogs, and websites to pre-sell services. Presentation packages, contracts, communication logs. They all work as one. This is how a quality profitable business is built. I might point out that this is how a contractor brands their business and gets lots of Word Of Mouth Business. Word of Mouth will lead to other like kind business.

Tags: advice, business model, contractor, making a profit, market identification, niche, owner, real estate, resources, running your business, specializing, survival

This entry was posted on Wednesday, January 14th, 2009 at 5:02 pm and is filed under Marketing Tools. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.