Starting a New Year means making plans for where your immediate business will come from and investing time, personnel and thought into expanding. If your retail residential business is less than you had hoped for, perhaps you will finally take the plunge into commercial work. Here are the best targets for you to consider under the current economic conditions:
Healthcare:This area will continue to grow. Facilities managers will continue to spend money on making their facilities clean, modern, and user friendly. Look around for hospitals and medical centers, but try to avoid clinics and nursing care facilities unless they are expanding. Hospitals spend a lot more money, in the aggregate, than any other healthcare facility. If you’re going to target a hospital, your first call should be to the director of facilities or environmental services unless it is required that you first visit with the purchasing department.
A quick phone call, offering a brief introduction of your company and its specialty, should result in an appointment. You want an opportunity to introduce yourself, get an idea of their upcoming projects for the next 18 months, and find out where they could use some help (and, of course, whether it fits with your capabilities). Hospitals are known to be loyal clients who need priority service that can be performed after normal working hours. You may just land a project, even if you don’t have the lowest price, if you are willing to perform work on a tight schedule, from 11 p.m. until 6 a.m.
Now the bad news: Many hospitals have long-standing relationships with dealers that stretch over decades and most will not change vendors based on price. Superb service is what sells. Find a way to get your foot in the door by asking the question, “In your current operations that involve floor covering purchase, installation, and maintenance, what would you most like to see improved that would make your life easier?” If you are known for quick repair service and have expertise in carpet, vinyl, and laminate, by all means let them know. If you can solve their number one challenge, you’re on your way.
If you are going to be successful in this particular area, all personnel in your company need to know this client is a priority and you expect everyone to go the extra mile. This starts with your first service opportunity with them. Frequently, if you have made a good impression during your appointment, they will give you a try on something small. This is kind of like a blind date, to see if there is a mutual attraction. If you and your team can give eye-popping service and show technical competence, rest assured, you will get more opportunities.
Also, keep your eyes open for nursing home expansions, construction of a new clinic, or even the remodeling of your own doctor’s office.
Local Government:Most of the effects of the current economic downturn will not be felt by local government until 2009 because of the way tax rates and budgets are set and taxes are collected. Of course, there are always exceptions. While there are many targets, your first stop should be at the city or county facility management office. Remember your interview at the hospital? Ask similar questions.
Be sure to ask the facility manager about his budgeted and funded capital projects that are upcoming in 2008. It doesn’t do you much good this year if a project is not scheduled to be funded until 2010. If there are some projects that are due to be funded, then find out which quarter. When is bidding going to take place? How will the bid document be made public? Will the bidding be to a pre-selected group or will there be stringent requirements in order to bid? Will this be an expected dollar bid that will require public opening? (In some localities governed by state purchasing regulations, bids expected to exceed $100,000 require public opening.)
Other questions to ask: Are there necessary, but currently unfunded projects that are particularly important to the facility manager? Are there smaller projects that the manager would like to do if money became available at the end of the budget year?
Another factor in local government is the multi-year blanket purchase agreement, particularly for schools. After you have asked your basic questions, be sure and ask if your specialty is part of a yearly purchase agreement. Some questions: Is carpet, vinyl tile, ceramic tile and complete installation usually purchased under a yearly contract? What is the term of this particular contract (or) when is this scheduled for rebid? What do I need to do to qualify as a bidder on this yearly purchase agreement?
If a purchase agreement is currently in place, a sensitive, but very important question is “How do you like your current contractor?” You can also ask “How would you rate the performance of your current contractor? How is this purchase agreement working out for you?”
Answers to these questions will let you know your probable success in going after such a contract. Yes, multi-year blanket purchase contracts are “awarded on price” but the reality is that if their current contract holder is not performing, they will usually find a way to award to someone else. Conversely, if they are being well treated, it is exceptionally difficult to get the contract away from them.
In one case with which I am familiar, a company has held a school system purchase agreement for carpet and installation for 19 of the last 20 years. This is in spite of having to rebid the contract every three years.
As with the healthcare industry, keep an eye out for public bids on a new facility or remodeling of an existing one. Most flooring purchased will be under a general contractor bid and will be a specific, single award. This can satisfy the need for “instant gratification” for 2008.
Commercial Property Management:There is more of a chance for immediate business in this sector if you cast a wide enough net. Make 10 contacts and you will usually find one opportunity for immediate business while you make your case for long-term business.
Look for small to medium size property management companies. When you are in an office building, find out the name of the property management company, and even better, see if they have a property management office on-site. If so, take a few minutes to meet the resident property manager. Even though he may not have purchase authority, he will more likely than not offer a wealth of information.
While many of your qualifying questions are the same, you want to be sure and ask about the range of property under management and their company specialty which includes type and location of buildings and tenants. How are tenant build-outs handled, and is flooring replacement handled by itself or part of a general contractor package? Is purchasing generally done by each property manager or is this centralized at the main office location?
One important question to aid you in your product selection is “What class of flooring products do you consider to be ‘tenant base grade’? And what do you consider a ‘tenant upgrade’ that requires payment above or in addition to the basic lease package rate?” Some property managers still consider a 26 oz. olefin level loop as tenant base grade; others are more realistic and specify 26 or 28 oz. level loop nylon.
In some upscale buildings, a 30 oz. nylon solid color commercial cut pile is standard and a 36 oz. is an upgrade. In others, a solution dyed patterned cut pile may be standard while a high quality carpet tile may be offered with border work in contrasting colors for an extra charge. Once you know the standard for this property manager, you are in a better position to know what to offer and how to price the job.
Whatever targets you select, you will have opportunities for immediate and long-term business if you ask the right questions. Hard work in prospecting and a good dose of patience will result in your having success in commercial work for 2008 … and beyond.