Finding Commercial Opportunities in Education
An astute businessman always looks ahead, and as Labor Day has just come and gone, and the kids are back to school, you may have had the thought that, “Maybe I should be doing some school business.” And the fall is a great time to make plans for this type of business.
The opportunity for most flooring dealers will mainly depend on the facilities in your area. A large, well-funded private university or state-supported college is an obvious target, as are private schools and those operated by religious institutions. Bigger and more complex potential may be with city or county school systems with numerous facilities.
If you are considering a move into this business segment, do your research. Write down the names and locations of each facility and plot the proximity to your company’s location. This will comprise your raw prospect list; from this you can begin whittling down to a manageable number on which to concentrate.
My suggestion is to work on a mix of prospects from a size, type, and location perspective. At the risk of being simplistic, nothing beats outlining your typical coverage area with a big circle, and then dividing into pie slices. Look carefully at each “slice” to see what is available. What you’re after is a manageable list of about 15 to 25 prospects that maypurchase flooring and installation. Of course, one school system may have anywhere from 10 to 200 locations! An ideal selection might be one university, a public school system, and a couple of private schools.
After you’ve given some thought to prospects and have done some research, you’ll begin to have an idea of dollar potential per target. What’s the minimum you’d expect an account to purchase and at what profit percentage for you to be interested? While a brand new account may purchase smaller amounts to evaluate your abilities, the important issue is the amount they might purchase if you gotall of their business.This information should be uncovered during the qualification process. Before you spend a lot of money and time, you need to establish your minimums.
During the qualification process, whether by phone or personal visit, ask as many of the following questions as appropriate or possible. This will help refine your prospect list into specific potential clients.
I have always found that the best information is gained during a personal visit, with an approach like this: “Ted, I’d like to ask you a few questions about how you handle flooring purchases, OK? This will save your time, keep me on track, and I’ll have a clearer picture of how we might be able to work with you. Fair enough?”
1. What is the typical annual purchase volume of installed flooring? What percentage of flooring purchased is carpet, resilient, or ceramic?
2. Do you have an annual or multi-year buying agreement? If so, when are bids solicited? Do you use local or regional buying agreements? State or federal government contracts?
3. What is the method used for major purchases? What time of year is this usually done? How do you handle small or emergency purchases?
4.Do you use a single vendor? How are vendors selected; is there a qualification process? Would you consider adding another flooring company as an alternate supplier?
Carefully note the answers, ask follow up questions when given the chance. The goal is to know whether to add this prospect to your short list of education segment targets. Plan your qualification campaign within each area and do a rough cut into “yes,” “no” or “maybe” based on a combination of your research.
Early fall is the ideal time of the year to begin calling on your educational prospects. They have just finished (usually by or before Labor Day) their major annual projects. Any mistakes or absolute disastersby their current flooring contractors will be fresh and sharp, and they are more likely to be garrulous. From this, you’ll be able to gauge your success of replacing a current supplier or find out if the prospect is unrealistic in his expectations.
Time has a way of making the bad things fade and the good seem better. They will already be thinking about what could have been done better or what was left undone and can’t be addressed until the next season.
That said, some facility directors don’t want to relive their immediate past and will tell you, “I am still recovering from this year, so don’t bother me until at least December or January. Then we’ll talk.”
One other reason for pursuing this work during the fourth quarter is to put your company in a position to compete for the business you’d like to get. Nothing is more frustrating than being told by a facility manager that, “I’d really like to do business, but the bids went out in April and are being awarded next week. Why not contact me again in about nine months?” Your ability to position your company and your products must be timely.
Here is what frequently happens: A wish list for repairs, retrofit, or major projects is developed in late fall or winter; estimates of dollars required and completion time are done, big dollar projects are prepared by the architect which are prioritized by the facility according to need and funding. Budgets are then made, reviewed, and approved; once funding is assured, bids are processed, advertised, received, and an award made. So, the facility manager may know what is coming, but will not have specifics until the budget is approved.
• September to December – Wish list and reviews
• January to March – Budget preparation
• March to May – Budget approval, bidding, bid awards
• June to August – Delivery and installation
Bidding and Awards
If you are fortunate enough to get an opportunity or two to compete for some business, make sure you know the ground rules. Whether a private or public institution, most will be forthcoming on what they have been paying for products and installation; after all, their goal is to get better pricing. Even a privately funded university, though not required to make purchase prices and agreements public, will usually give you some range of price levels.
When public money is being spent, the previously awarded contract with pricing may be available for the asking. You may have to request it in writing; just be sure to allow enough time to receive it.
Read the bid document and make a list of what must be provided and the return date. Many bids have been lost because they were late, a bid bond was not included, qualification info was not provided, or the pricing page was not filled out correctly.
Always attend public bid openings and make notes on what other companies have bid. There is often only a 10-day period in which to file a protest. If there were few bid responses and the apparent low bidder was unusually low, you might be well served to have a conversation with your facility manager beforean award. Sometimes the extra scrutiny will uncover mistakes that will result in the bid being judged as incomplete or non-responsive.
Products and Installation
Yes, you must have acceptable products and competent installation. However, dealing with the myriad details, timely installation, and last minute projects is a lot more important than which specific product is being installed. “I don’t care which product you install, but it has to be a level-loop nylon, solution-dyed, minimum 26 ounces, in blue, and it has to be on the floor by August 25th!Is there anything about that you don’t understand?” Those were the exact words from a frustrated facility director who had just had the latest, last-minute requirement dumped on his desk.
With unexpected projects, I would frequently submit more than one product and get an approval based on an “either-or” selection.
What to Expect
The “golden time” of some six to nine weeks is all you’re going to get for planned projects with most educational accounts. You must perform within this time period or face a significant, reputation-destroying outcome. Expect to have problems, stress, and personnel challenges. Be willing to pull in extra crews or do some reassignment from other segments to handle those extra projects.
I have seen opportunity in the misfortune of others when they were unable to perform, having been told by a potential client after a poorly executed project, “I will never use that company again; is there any way you can help me out and get product in here and on the floor?” I did it by pulling crews from another job and was assured of business the next year.
Here’s a suggestion: have a meeting with your project managers, field supervisors, and installation team personnel after you have a book of upcoming school business. Discuss potential problems and the benefits to the company from exemplary performance. Make everyone’s goal the same: Superb performance with a smile.
The opportunity in education is there, waiting for you to seize it. It does require long-term focus and multi-year strategizing, but as long as you plan effectively, this can be an integral part of your commercial business.
Photos courtesy of Dave Stafford