Answers

? How do I get references when I am just starting?

You don’t! You have to be perfectly honest with people and say that you are just starting out and you hope that they will be your first reference. The customer will admire your honesty and your self-confidence.

If it is a small job the customer will probably take a chance on you to help you out. If they will not do that then consider yourself lucky. You probably just dodged a bullet from a “toxic customer.”

Keep the faith. The work will come.

?How do I establish trade credit if I don’t have any now?

This all depends on how your personal credit is. Let’s suppose that you do not have any credit personal or otherwise. You will need to establish credit in order to grow your business.

Nowadays the fastest way is to work with your local bank and some small merchants. First, talk to your bank and ask you account manager how he/she can help you establish credit. The manager will be happy to do that.

Let’s say you are doing some painting. Don’t buy it from a Home Depot. They won’t do anything to help you get started. They and Lowe’s put all their accounts through GECC. GECC is tough on credit. If you have no credit you will get no credit.

Go to a local paint store and introduce yourself; and ask the owner if you could work your way into a credit line if you promise him all your paint business. Be reasonable and ask for a small amount for a short time…like $50 to $100 for 10 days. Pay him promptly when you get paid and do not make excuses. Be a good loyal customer and you will soon become a 30-day charge customer. You will be able to develop other accounts the same way.

Within months you will begin to have good business credit references. Just do not go and use your first paint store as a credit reference for another paint store. Keep your promises to the people who helped you get started. It will pay in the long run.

? How do I continue to promote my business when I start getting busy all day working?

It easier to retain a customer than find a new one: but when you are still small and doing everything yourself you need to continually find new customers.

Work through the customers you have by working the immediate neighborhood while there. Distribute flyers to the nearest 50 houses and say what you are doing for their neighbor. Then ask on the flyer if they would like a free estimate on whatever type of work you can handle.

Then continue to buy that coffee every morning at a different shop or a different time so you see new people and hand out your card or flyer. Also, standing at alternating grocery stores on weekends will produce results if you do it on a continuing basis.

? How do you price a job when first starting out?

The short answer I like to tell new contractors is to give a very competitive price when first starting. You will find people who will be willing to take a chance on you doing something small; but you are going to have to buy your way into the market.

If your cost to do something is $100 and the going rate should be at least $150, then you should come in at around $135 so you do not get passed over for someone better known.

Do not round off your numbers…ever. A $200 job is $198.57…a $1,500 job is $1,487.56, etc. Customers will ask why you are so precise. Tell them that you work as close to cost as possible so you need to be very precise in your estimate.

At these lower prices you will get some work quickly. If you do a good job then the word will spread and you can slowly over the next few months come up to that 33% profit margin.

Eventually you will be able to operate at a higher margin as your reputation grows.

? How do you get started with practically no money and no jobs?

This is one question that I could probably write a book about; but let’s keep it simple for now.

First, get some nice looking business cards and/or flyers offering your services as a small contractor. If you can repair things, say so. If you can repair walls and/or paint, say that. You can print your own and/or get a great deal from a local printer or the internet.

Give those cards out to everybody you see. Your family, friends, neighbors for blocks around. Hand out flyers in front of a big grocery store near you on a Saturday and Sunday. Be friendly and courteous. Do it for a couple of weekends.

Ask your bank if you can put a flyer in the bank or on a tripod inside the entrance for a few weeks. Give your cards plus extras to all the bank employees.

Put your flyer and/or card on the community bulletin board that most grocery stores have.

Promote yourself to local businesses. Walk right in, tell them who you are and that you are just starting out…small business people love to help out the new kid on the block. Check out the coffee shops, drop cards and see if they have a bulletin board for your flyer.

Do this consistently for a couple of weeks and your phone will ring.  Then you are on your way.  We will cover this in more detail in our newsletter.