OT: marketing your business

geniusintraining

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I know that there are a lot of you that own your own company or are partnered up with someone and have started from nothing and have built an empire (ok surviving may be a better term)

The company I work for is in a slow down, so I thought this would be a good opportunity to venture out and see if I could do some part time automation on my own, I have been do this for 15ish yrs and I know that I would do a good job for someone in need of smaller size projects, I would not take a job that I think would be too much or over my head, I have others that I would/could sub-out to if needed.

That said….where in the hell do I get the work? How do you market yourself?

Knock on doors?, mas-Email?, fliers in mail boxes?

I have the talent and there is a need (supply the demand), I have been looking for help here (until the end of last year) for years and have found a few, but I would say that there was not a over abundance by no means, especially for the smaller jobs one to two days

Thanks
Sincerely your friend, GIT

Edit: Or if you have anyother advice about small business in general (besides don't do it) it would be appreciated
 
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I can only speak from my own experience. I spent a decade as an applications specialist for a PLC distributor. By the time the opportunity arose to join up with a friend who had already formed the business, I had a fairly extensive list of potential clients who knew my capabilities. These formed the core group of customers I was able to bring in when I joined.

My colleague took a somewhat similar course. When he got downsized out of a job he had done a lot of startup/troubleshooting work for a large customer of his former employer. Enough so that the customer was willing to commit to a sizeable contract with him. Once that was successfully completed, more folowed. When he approached me to join him, he had just learned he had metastatic colon cancer. There were several projects in the works with his big customer, but they were reluctant to write the purchase orders for fear he'd be too sick to carry them out. By adding me to the firm, he satisfied the customer and he was able to spend his (too few) final years productively.
 
Well I'm now the owner of an empire, but business is good and it's paying the bills so I'll put my 2 cents in.

Timing is everything. If it's not the right time for you to venture out then don't. But I'm not saying what you think. Most people save up money and make sure they will be able to stay in their comfort zone when they venture out.

That's not the way do it. You got to be hungry. I planned on doing a write up on how I truly got started but I'll give you a sneak peak

First, you've got to leave you job at the worst possible time. In my case, 3 months before my son was born. Oh but wait, you must do this after your wife has already gone out on maternity leave. Yes, $0 income, that's how you start.

But that's not good enough, you need a building to work out of. Don't rent a space, build it yourself. You will get pleasure in knowing that your hard work is going towards your dream of owning your own company. Step back an look at that building, only one more piece of trim to put around the top. Get up on that ladder, start nailing up that last piece of trim. Your so excited you feel like you can fly. Oh wait, you are flying...right towards the ground. You've fell off the ladder. Land on a tree stump on the way down and break your ankle.

Yes, $0 income and immobility. But that's still not good enough. Let's stick an unexpected bill from the past in there to wipe out the rest of your savings.

Yes, now your ready to make your decision on whether or not to start your venture or not. $0 income, you can't walk, you have no money, and no ones going to hire you while your hobbling around. Only two ways to go. To the top or to the bottom.

Now explain to your pregnant wife while at the hospital that a cast is not an option, your going to have to tough this one out. Take a week off your ankle so that your shoe will fit over it again. During this time, read Duct Tape Marketing by John Jantsch and build your business plan and your customer prospect list.

A weeks healing is good enough, now go get yourself a cool cane and get out there and start talking to customers. Oh by the way, you already walked with a limp from where you other ankle had been broken when you were younger. Your working hard to get your name out there but it's the end of the year and all anyone wants to talk about the the upcoming holidays.

Yes, now you really are hungry because you don't have any food. Good thing it's the holidays, grab all the leftovers you can. Oh and your out of gas, how can you call on customers? Tell your buddy your vehicle is broke down and borrow his. Its got a full tank of gas so your good for one more week.

And thank goodness here comes customer number one. Work hard with them, show them that you are dedicated to satisfying them and not just billing them for the job.

All the sudden phone calls start coming in. Slowly business gets to the breakeven point and you begin to profit just before your son is born. Yes, you finally begin pulling out of the hole. First order of business? No, we can't buy that cool Fluke meter yet. Go back to customer number 1 and show him that you truly appreciate you them giving you the opportunity when you so desperately needed it. Everyone says your crazy for doing it but give customer number 1 a lifetime rate of $35 an hour.

Like I said, you've got to be hungry...you've got to want it

TW Reveled
 
Correction - The first line should read "Well I'm not an owner of an empire"

Didn't realize it before my edit time expired
 
The answer is networking.

Your best source for ptential clients are the people you have done work for in the past, and the people they can recommend. Contact everyone you have dealt with, and tell them your plans. Ask them for work, and ask them for referrals.

And get yourself a good accounting program. The number one reason for new business failure is the lack of good records.
 
I free-lanced for over 12 years and my advice is to avoid billing "fixed" price jobs at all cost!

Here's why:

1) You work from sketchy, vague specifications most of the time. However, you can still get the electrical drawings done easily in the time you quote, since you use CAD and understand the hardware scope.

2) Many end customers (read: "machine builders") make mechanical mistakes or omissions that force you to either change something or add something.

3) At test time, de-bugging goes fast. You can "twidle bits" faster than the customer can re-machine that new weldment that was screwed up from day one. However, he expects you to stand there waiting for him to finish, since HIS customer will be there in the morning to witness the final test and machine runoff. (HINT: I always kept a pile of "busy work" such as annotating PLC comments to do during waiting periods, so I didn't lose my shirt.)

I'm sure that everyone here may argue with what I detailed above, but the real problem is dealing with PEOPLE. These people are your customers and they feel the customer is always right. If you dare fight with them, you are out the door and some other poor soul will be in the next day to replace you. Someone in "management" won't like you, think that your work could be done better "in house" and will hold up an invoice for some trivial reason. (I've had an invoice sit on an engineering manager's desk because he needed to "talk to me about something". What BS...

If you absolutely must, present a WRITTEN quote to the client spelling out EXACTLY what is covered at the fixed price and leave yourself an out that changes to the scope that cause additional work will be billed at X dollars/hour.

Lastly, I couldn't agreee more with Tom Jenkins' post about "networking". Over a period of time, you will see more and more jobs come from recommendations from other clients.
 
Jimmie_Ohio said:
Lastly, I couldn't agreee more with Tom Jenkins' post about "networking". Over a period of time, you will see more and more jobs come from recommendations from other clients.
Aside from the control forums for networking with others in the industry I have found http://www.linkedin.com to be a good place to find people in various professions

Also, offer a discounted rate to customers to become a "Referral Client". They refer you to other potential customers in exchange for a lower rate. It is a win win situation that I have found customers really like
 
GIT,


I've thought about it several times. I am actually trying to spend a little time with an electrical contractor to help him out and get contacts from him. Even told him to let his customers know that "he" can now do some automation. Haven't had any bites yet but I'm not as hungry as TW (or as hobbly). One thing I would look at if you are going to do this on your own is insurance. In this sue-happy world, I wouldn't dream of doing anything without some kind of insurance. I would also think that most companies that you would deal with (yes the smaller ones) would still want you to have some kind of insurance before you start work (that is where some other owner of an existing business might come it).

Good luck if you strike out on your own, and remember, safety first!
 
You used the primary word in your title...marketing.

Tim gave an interesting approach to how you would start.

There are many ways you can go with this. I would suggest the first thing being, create some literature / documentation identifying yourself, your capabilities, your skills, etc...

Once you have who you are and what you can do, the next thing is to determine who would be interested in my skills. Before writing this, I read your post last night and gave it some thought. The first question that came up is:

Do you want to remain in your current job and do this as a side to earn extra money or do you want to transition and go out on your own?

How you answer will ultimately determine your long range plan.

If you are looking to generate extra income while still remaining employed, you can look to other companies that are currently overwhelmed with work and need assistance. It will be cheaper for them to contract out then to hire. In this scenario, they are not making a long term hiring commitment, but rather a short term decision. If the business does not continue, then they are not stuck with fixed costs associated with new hires.

FYI, the last thing most companies want to do is hire more people. They want to squeeze as much out of who they already have employed rather than hire another person. The idea to most about contracting out for assistance seems to be easier to swallow. Much has to do with the enormous amount of uncertainty.

If you are looking to build an empire, then you would have to start one brick at a time.

Once you have developed your biography material, I would suggest identifying companies that can utilize your talents. It is better to establish a contact first prior to mailing information, this way you can mail your information directly to that person, thus establishing direct contact. Depending on the company, this is much easier said than done. (unsolicited mail, with no contact person will typically be considered trash more often than not)

Don't consider it a waste of time establishing a relationship with the gate keeper, otherwise known as the receptionist. He/she can be your best friend if you treat them right. If you don't, they could be your worst nightmare...a brick wall.

Seeing as Tim shared, I will share Entertron's humble beginnings.

It all started in Toronto, the year was 1978 where my father and his soon to be partner were working at another company when they decided to create Entertron. The first production occurred in my father's partner's parent's apartment over a Chinese restaurant. I would go over on the weekend when they had some large orders, to stuff and solder boards. Strangely, I didn't know about child labor laws at the time in that I was 12 and making $5 / hour. I believe the minimum wage in Canada at that time was $2.15. So all in all, it wasn't bad...lol.

My father had another company that he generated his income from while his partner received his income from Entertron.

At the time, there wasn't really a micro plc market. Our primary competition was Modicon's 084 and I believe one of the SLCs (maybe the 50) not 100% certain. Back then, the PLC had the perception of being a "black box" and not yet widely accepted. So the marketing aspect was not only to promote a new product, but to convince the market that our product was just as good, if not better than the standard, relays and timers.

Your challenge will be to convince people why they can benefit from your skills, talents and capabilities. In essence you are marketing yourself.

Tom mentioned networking...vitally important. People are who make the decisions, therefore identifying these people and developing a relationship with them will ultimately open doors for you. You may also want to talk with some of your friends and see if they know of anyone that is in need of your services.

Another question that comes to mind...what is the opinion of your current employer? Have you talked to them about this? Will there be any problems if you move forward?

Some here will tell you that what you do on your own time is your business and not that of the company you work for. This is true, however, if what you do on your time affects your work for your employer, then, it could become an issue.

Another option would be to do some advertising in your local paper. Not overly costly, and you can see what sort of response you get from your ad.

I don't know what you believe or don't believe, but without going into an entire speech explaining it...pray about it. If you believe, then you know what I am talking about. If you don't believe, then I can explain it to you...lol.

Hope this helps...as usual, a long winded response.

God Bless,

 
One place I disagree with TW is in using cost as a sales tool. In my opinion it doesn't work well. In the first place, someone can always underbid you no matter what. In the second, some customers see low price as equivalent to low quality, or even worse, a guy that is so hungry they can get away with abusing him.

Charge the going rate, and remind cuctomers that you plan to do top quality work and expect to be paid accordingly. If they want it cheap, they should go elsewhere and come back to you when they want it right.
 
I would have to agree with Tom on the concept of selling based on price first.

Unfortunately, I would view it as the Wal-Mart state of mind. Have to have it for the cheapest price.

Our experience has been that when a prospect contacts us and the first question out of his mouth is how much is your Smart-PAK, I know that this will not be a productive call. They typically have something already and are looking to save a few extra dollars by switching to another manufacturer.

Typically, most people look at the "hard cost" as well as the "now cost" without giving much consideration to future cost or the cost that it takes to change.

A tired old cliche, If you live by the sword, you will die by the sword. Same can be said for selling based primarily on price. The moment a cheaper product / service comes along, those customers that you have acquired as being the lowest cost provider, you are now in jeopardy of losing your customer base.

In taking it a step further, don't sell yourself short. You have training, skills and knowledge that you have acquired over the years. There is value for what you know. Charge accordingly.
 
Tom Jenkins said:
One place I disagree with TW is in using cost as a sales tool. In my opinion it doesn't work well. In the first place, someone can always underbid you no matter what. In the second, some customers see low price as equivalent to low quality, or even worse, a guy that is so hungry they can get away with abusing him.
Actually I think I didn't state this clearly. The purpose of it is not to underbid. These customers are into many facilites that have other needs that they can't provide but I can. Pretty much the discounted rate is in exchange for me being able to use their sales staff. I guess I could charge normal rate then turn around and pay them sale commission for jobs I get, but this requires less paper work and I get to work closer with my clients.

As far as underbidding when you know someone else will come in lower, I agree with Tom. Stand your ground. If you do it once they will expect you to do it again.
 
Thank you all very much for sharing your experiences and the great advice

A couple of things…

I have talked with my current employer and they have no problem with me doing this and I don’t have the balls like some of you (Tim for one) I am only going to do this part time (for now) and plan on keeping my job here

So about the money and charging rate… what do you think about T&M (time and materials), I thought about charging that way, but I was concerned that they (my customers) may think that’s a bad idea, what kind of cushion do you build in to your quotes? if you do it that way.

I have done several jobs that I thought would be a piece of cake, but took several more days then expected, in that case would you just chalk that one up for one of lifes expereinces and go on? even though that may not have been your fault, I'm sure that this kind of thing happens all the time.

I’m sure that I will learn the hard way on some but…if it doesn’t kill me it will make me better

Thanks again
 
well, you asked - so I'll try to answer ...

I fully expect to be in the minority here - but here’s my opinion on billing for “time and materials” ...



personally I don’t think it’s a good idea - even though often (usually? ... always?) it’s the only way to charge ...



discussion:



suppose that you decide to charge a standard rate of $100 an hour (just to have a number for discussion) ... suppose that you take on a certain job ... suppose that you’re experienced, talented, motivated, healthy, rested, efficient, well-equipped with all of the tools and supplies that you need, and so on down the line ...



suppose that the job takes you 40 hours to complete (just to have a number for discussion) ... so doing the math, you just grossed $4,000 ...



now suppose that you have a competitor ... the competitor takes on an IDENTICAL job ... he only charges $75 an hour (just to have a number for discussion) ... suppose that he’s not experienced, less talented, poorly motivated, unhealthy, unrested, inefficient, and poorly-equipped, and so on down the line ...



suppose that the IDENTICAL job takes your competitor 80 hours to complete (just to have a number for discussion) ... so doing the math, he just grossed $6,000 ...



you see where I’m going with this? ...



now which of those bills - yours (for $4,000) or the competitor’s (for $6,000) do you think the customer is going to be the most comfortable with paying? ... think about it ... and the winner is: the competitor’s bill - because the bean-counters who are handling the finances think that they’re getting a BARGAIN! (yes, a BARGAIN!) because they recruited someone willing to work for the reasonable rate of only $75 per hour - as opposed to your exorbitant rate of $100 per hour ...



reality check: the bean-counters aren’t really interested in the fact that the competitor took twice as long as you would have taken - because there’s really no method to positively quantify and compare the time requirements ... sad fact: to most bean-counters an hour of labor - is an hour of labor - is an hour of labor ... regardless of who performs the labor ... and regardless of how efficient - or how inefficient - the worker might be ...



and always remember this: the bean-counter has a boss to report to ... think how great the bean-counter will sound when he hands his boss the final $6,000 bill from the competitor (clearly showing the $75/hour rate) and compares it side-by-side with your quote (with its $100/hour rate - but unspecified hours) ... and then nails it down with this line: “And since it was an 80 hour job, I just saved the company $2,000” ... the fact that you’d have only taken 40 hours to do the job is never even considered ... remember: an hour of labor - is an hour of labor ...



now then ... if you’re following closely you might be thinking: wait a minute here ... my competitor made $6,000 - and I only made $4,000 ... but then again, it took Bozo TWO weeks to do the job - and it only took me ONE week ... so that means that I can still use that EXTRA week to do another job - and that way I can get ahead of the clown ...



maybe ... but maybe not ... here’s the big question: do you already have another job lined up for next week - or are you going to just sit in your office and wait for the phone to ring with another opportunity? ... or (much more likely) are you going to go out and try to market your services? ... so what percentage of time do you plan to spend marketing? ... and what percentage of time do you plan to spend working? ... kicker: and how much do you get to charge for marketing your services? ...



anyway - to sum this up ... in my personal opinion, the only guys who have a GOOD handle on charging by the hour are the automotive mechanics ... when you pull up in your car with “Problem A” they look in their handy Chilton’s book and tell you that “Problem A” is a FOUR hour job ... multiply that by the hourly rate they’re charging today - and that’s your labor bill ...



now suppose that you hang around in the waiting room and find out that it only took the mechanic ONE hour (not all four) to get the job done ... guess what you’re going to pay ... right ... the full FOUR hours ... not fair? ... well, you want him to still be there the next time your car needs fixing don't you? ...



punch line part 1: an automotive mechanic who is experienced, talented, motivated, healthy, rested, efficient, well-equipped with all of the tools and supplies that he needs, and so on down the line - can make a LOT of money charging by the hour ... and the faster and more efficient he gets at doing his job, the more money he can make ...



punch line part 2: most other by-the-hour contract workers (those of us without a Chilton’s book to guide us) often find out that the faster and more efficiently we do our jobs, the LESS money we can make ...



sad ain’t it? ...



so where do we go from here? ...



my suggestion is that you try to deal with people other than the bean-counters ... specifically, try to deal with people who understand that an hour of EFFICIENT labor is NOT the same as an hour of INEFFICIENT labor ... more specifically, with people who understand that there’s real value in getting the job done FASTER and BETTER - as opposed to just getting the job done for a lower hourly rate ...



good luck with that ... in most cases, that’s not going to be an easy undertaking ...



most important ... I’d suggest that you always try to start calculating from the standpoint of “what is this particular job worth?” ... not in hours necessarily - but in dollars/value/importance to the customer ... if the job is honestly WORTH say $10,000 (just to have a number) then try to arrange your billing to generate that amount ... again, that won’t be easy - but it’s a target to shoot for ...



finally for now (I’m out of time) I’ll leave you with this ... in another lifetime I used to run my own one-man business in restaurant equipment repair ... it was VERY successful ... (man have I got stories to tell) ... but the constant kneeling to work on ovens and fry vats demolished the cartilage in my knees ... and that’s why I got into PLCs in the first place - less kneeling involved ... anyway ... when I was first getting ready to start my own business I went to Mr. Harry Jones, a tax consultant, for help with setting up the record keeping, etc. ...



somewhere along the way, I mentioned how much all of my existing competitors were charging per hour ... and then I mentioned that I was planning to charge about $20 less per hour - in order to generate business ...



Mr. Jones gave me some sage advice which has profited me greatly over the years - and I’ll close with this:



don’t charge LESS than your competitors ... charge MORE ... people who are ONLY interested in PRICE alone don’t make good customers ... instead they make good leeches ... send them off to bleed your competitors dry ... be honest ... be good ... be fair ... but if you want to stay in business for the long-haul, then you’ve got to charge enough to make the work worth your while ... a good customer will understand that ... a leech won’t ...



I wish you the best in all of your endeavors ...
 
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