January, 2009

Where is the Light at the End of the Tunnel?

By Bill Lee

I have some metro area clients whose sales are off by more than 50%, but are still earning a profit. How are they doing it? They responded rapidly to the fall off in housing. They were not guilty of betting on the come; they very quickly trimmed their operating expenses to get them in line with the gross profit they believed they could generate.

If you have still not gotten your economic house in order, time is running out. The 2009 business year has begun; if you have not begun the profit planning process, start today!

Some Good News

At the end of October, a real estate trade group reported that in September the sale of existing homes rose by the largest amount in more than five years. This data is a glimmer of hope that the housing slump could be beginning to bottom out. Notice that they did not say, “…had bottomed out,” but “….could be beginning to bottom out.”

The National Association of Realtors said that sales of existing homes rose by 5.5% in September compared to August, the best showing since a 5.6% increase in July 2003.

Housing Forecast

Inventories of unsold existing homes dropped by 1.6% in September to 4.27 million units, which would be a 9.9-month supply at the September sales pace, a historical high level.

When I listen to economic analysts, I keep hearing more and more of them refer to residential housing hitting bottom around the beginning of the third quarter of 2009. While July is several months away, it’s not nearly as far away as it was at the beginning of 2008, so I believe we have reason to be optimistic.

Who is Managing Sales?

Pull out all of the stops when it comes to sales and marketing. Salespeople in our industry have had it so good for so long that many have forgotten what it’s like to get out there and scrap for an order. These conditions call for aggressive sales management. I have put together a sales management system for our industry. Send me an email to Blee3paris@aol.com with Sales Management System in the Subject Line and I’ll send you a FREE copy of my write up. I believe whoever is managing sales in your organization will benefit greatly by following this system.

New Business

I have also prepared a Six-Step Prospecting Process for salespeople to follow when prospecting for new business. This step by step process shows salespeople how to earn the right to a piece of a prospect’s business without using price as a weapon. Send me an email to the above address with Six- Step in the Subject Line and I’ll send you a FREE copy of this write up, as well.

Keep a Positive Attitude

As Dr. Alan Zimmerman wrote in his incredible book, Pivot, “There are no guarantees in life. But fear is never a reason for quitting. It is only an excuse.”

Take Dr. Karl Menninger’s advice, “…when you’re feeling down and depressed about anything, go out and help someone, because taking your focus off yourself will almost always lead to better mental health.”

Dr. Zimmerman describes worry as self-absorption. It puts an extreme emphasis on self. But as Menninger knew, if you stop thinking about yourself, at least temporarily, if you think about others and how to help them, your worries will go away. You’ll get healthy and have a more positive attitude.

Keep focusing on helping your customers and prospects by bringing them new ideas, positive information and suggestions for digging out of the hole many of them find themselves in. This is the path to success in good markets and bad.

BILL LEE has nearly 40 years of experience in the construction supply industry. A consultant and seminar leader, he is the author of two books: Gross Margin and 30 Ways Managers Shoot Themselves in the Foot. www.BillLeeOnLine.com, 800.277.7888.