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Job Costing: Seven Tips to Make it Easier

in Finance

Submitted by Schmershal Treloar & Co.

Job costs are the lifeblood of your construction business and accurately estimating them will determine if a project will make money. Managing job costs across the life of the project will ensure that your firm makes money on every job. Moreover, those job-by-job profits make the office and your executive salary possible.

Despite this, some CFOs don’t take job costs seriously. Some see tracking those costs as more trouble than it is worth, while others think that the costs are so obvious that tracking them seems like extra, unnecessary work. Neither is true and both can limit your firm’s profitability. Here are seven tips that can make job cost tracking easier than you might think:

Tip #1: Set Priorities at the Top

Tracking job costs is a process that involves every level of your organization. All of your valued employees intuitively know the value of tracking costs by job. If you begin to place an emphasis on the accurate identification of every cost by job for every purchase, they will gladly join in and help identify jobs with enthusiasm.

Tip #2: Set up Solid Communication Between the Field and the Office

Cost tracking starts in the field, where the materials are delivered and the purchase decisions are made. Field people are well-placed to know which costs go with the jobs. The trick is making it easy for them to flag the job name or number so that the person entering the invoice, credit card or debit card charge into the computerized accounting system can follow the process of assigning the proper cost code.

Tip #3: Provide Information to Bookkeeping Staff Readily

Bookkeepers may be tempted to let it go when the job information isn’t available, promising to assign the proper job number later. This is the single most common source of errors. Making job information readily available to the bookkeeping staff is the best way to counteract this tendency for misinformation to cloud your reports.

Tip #4: Require Purchase Orders

Purchase orders are a good way to ensure the success of your job cost system, so have your accounting, finance or tax professional help you develop a good system. Purchase order systems work when the office must issue a unique order and all supplies must get purchase order numbers from field staff before providing materials to any job. An effective system helps ensure that no invoice will come to your office without a job identified on it.

Tip #5: Use Caution Handing Out Company Credit Cards

With credit and debit cards, there is usually no way to include a job name or number on the receipt. Provide cards only to responsible crew leaders. They should be required to send receipts right away to the office that identify the jobs. This can be done either by texting receipts as images, e-mailing scanned copies of receipts to the bookkeeping department, or dropping paper receipts off with the job name or number marked on them.

Tip #6: Clearly Separate Costs

Job costs differ from office and overhead costs by getting a job number that is distinct from the general ledger account number. The chart of accounts or general ledger can be a help or a hindrance depending on the skill of the accounting, finance or tax professional who develops your job cost system.

For example, general ledger expense codes typically start with the 5,000 series of account numbers. Job cost tracking then becomes easier for everyone if they are coded with 5,000 series numbers, while allocated costs are coded with 6,000 series numbers and office and overhead costs get 7,000 series account numbers.

If the chart of accounts and job cost ledger are set up professionally, cost allocations will become easier and more accurate and job cost reports will be more accurate and useful.

Tip #7: Follow Best Practices

The actual job number you assign should be carefully chosen following best practices. For example, a good job number is not just the next number in a haphazard sequence that starts with some arbitrary number and has three or four digits. A good job number always conveys information such as the year the project started, the specialty trade involved, and whether the expenditure was a material cost, equipment rental cost, labor cost, or subcontractor cost.

Consult with your accounting, finance, and tax professionals who are familiar with construction best practices. This will make your life easier down the road as well as more profitable.

What’s Your Company’s Sales Culture?

in Columns/Marketing/Sales

by Tom Woodcock

Tom Woodcock

Webster defines “culture” as: “a set of shared attitudes, values, goals and practices that characterizes an institution or organization.” Most interesting is the concept of shared values.

Every company develops a sales culture. Whether by plan or accident, a culture will be established. This culture directly relates to the way customers are treated and approached. Some companies mistreat customers and don’t even realize it. This is because they’ve developed their culture without regard for the effect their choices will have on customers. That type of culture can stunt a company’s growth and profitability. Others companies bend over backwards to please their customer base. They go the extra mile and do whatever it takes to serve them. That breeds both customer loyalty and increased profitability.

How do you establish a positive, progressive sale culture?

It starts at the top. Ownership sets the rudder in regards to the value they place on their client base. They establish the priority level of customer needs and the parameters of service. They get involved with the client base and assist in the sales effort. The more detached ownership is, the more opportunity for customer abuse or neglect. Owners that are absent from the sales effort cannot expect staff to place a proper prioritization on clients. If it’s not important to ownership to be involved, why would you expect the employees to place proper value on them? The good thing is that the weight of ownership helps minimize the time commitment the owner needs to make to sales. A little attention from the president of the company can go a long way towards making the clients feel appreciated.

Next up, upper and mid-level management. Direct supervisors must reinforce a customer-first focus to their staff. They must encourage staff to freely communicate issues that develop with clients. A belief that management isn’t as concerned with customers as internal issues causes staff to focus more on paperwork than customer retention. Management also must have contact with the client base and be willing to support sales staff in servicing them. The thought that insulating management from the customer base may make a manager’s life a bit easier is understandable, until numbers drop!

Adjacent to management is the sales and business development personnel. Those individuals become the immediate face and personality of the company. This is why strong people skills are so critical to a company’s sales efforts. Internal relationships with management and support staff also are integral to a successful sales culture. That means this group actually has three customers: the true customer, management, and internal support staff. Failing to adequately invest in any of those relationships can inspire negative impressions that filter down to the buying customer. You’ve probably seen it in the common tension between sales and administration. Business development people feel the support staff is there to “make it happen” for them, while the admin folks believe the sales personnel are out there just “playing around”. I see it all over the country within GCs, subs and vendor firms. It’s a poison that kills customer trust.

Finally there’s the support staff. This can be everyone from the person doing invoicing to field personnel. A great sales effort can be completely dismantled by unhelpful, arrogant staff. The pleasantness of a good sales relationship is fast forgotten when dealing with a short-tempered collections person, a cocky driver, or a belligerent field worker. Often those individuals have more regular contact with the customer base than the sales personnel! It’s remarkable how when invoices are fought over and change orders questioned repeat business dissipates due to issues created by support personnel. Often those issues go unknown or unreported to management.

To practically begin developing a profitable sales culture you must enact a few basic steps:

  1. Determine the company sales philosophy, which is set by ownership.
  2. Set regular corporate sales meetings to reinforce the philosophy.
  3. Monitor staff implementation of the philosophy.
  4. Create an environment of free customer information exchange.
  5. Set a central CRM program to capture customer information
  6. Survey a sample of customers to verify how the philosophy is being experienced.
  7. Adjust, account, correct, and replace if necessary.

The vast majority of companies will never invest the time or effort into consciously developing their sales culture. They will continue to go with the flow and watch their profits shrink as they race to the bottom to be low. They will blame the customer for their profitability issues and blame suppliers for high material pricing.

Customer loyalty is not a thing of the past. There are companies with strong profit percentages. The reason? A sales culture that looks at the customer first permeates through the entire company and has the correct corporate priority. How did your company’s sales culture come into being? I’d love to know, wouldn’t you?

Tom Woodcock, president, seal the deal, is a speaker and trainer to the construction industry nationwide and author of “You’re Not Sellin’, They’re Buyin’!” He can be reached at his website: or at 314-775-9217.

Setting Annual Expectations

in Columns/Marketing/Sales

By Tom Woodcock

Tom Woodcock

As the holidays pass and we barrel into the new year, companies scramble to forecast next year’s performance. Numbers will be thrown around, projections made, and hopes elevated. Ownership will almost always demand better results in either revenue or profitability, or worse, both. Then the great master plan is formatted and presented at a company meeting. At that point, virtually everyone walks away leaving the sales team to make it happen.

Kinda comical if you really think about it. Marketing budgets get cut, entertainment expenses reduced and owner engagement wanes, yet you’re tasked to increase business. “Do more with less!” is the new company motto. You sit there wondering how you’re going to pull it off, if at all. It might be easier to just start making your excuses now as opposed to when the projections are blown. It seems to be an annual ritual. The real question is how do you project what an upcoming year will hold?

Projections can be very strategic or de-motivating in nature. Most are unrealistic in scope and cause unnecessary sales stress. Many have no formulation on how to achieve the numbers. Whether revenue, profitability or expansion of customer base, projecting results without having a plan is a shot in the dark at best. There are a few key areas related to sales that will require a strategic approach. Otherwise, reaching a projected goal will be a seat of the pants proposition. Hitting these main points will at least allow you to hit the basics:

  1. Market Conditions: Understanding and calculating what is taking place in your specific markets is paramount to setting your company’s sales rudder. Is demand trending up or down? Are there economic factors that dictate market direction? Has the customer base shifted in need or demand? These are important questions to answer. These influences can send you in the wrong direction if not addressed.
  2. Historical Sales Data: I find many organizations evaluate their sales teams via gut reaction. You “feel” like someone is doing a good or bad job and approach that person accordingly. The sales data may reflect the opposite of your impression. It’s impossible to project where you’re going without knowing where you are. What’s the starting point? What increases have you been averaging year to year? If historically you’ve realized a 5 percent increase year over year, you’d better have some strong data supporting an expectation of a 20 percent increase for the projected year. Unrealistic growth is never realized.
  3. Ability of Sales Personnel: Being realistic with the talent and work ethic of your sales team can assist in determining what you can truly expect that team to produce. Are they seasoned veterans? Developing rookies? Maybe a combination of both? Break the team down by individuals and measure the past contributions of each to your sales total. Use that as a baseline then incorporate the information you attain in the first 2 points and project growth. Combining the individual results will give you a company-wide figure. It’s useless to predict a high level of growth when you don’t have the players to get there. It’s like expecting your nine-player baseball team to hit 90 home runs when no one has ever hit more than five. It is just not possible.

If you’re diligent in at least these three areas, you can expect to make reasonably educated forecasts. Hitting projections will fuel the motivation tank. Over analyzing causes paralysis, insecurity and mistrust. Set your direction and stick with it. Be sure everyone clearly understands the requirements and the result of hitting or missing goals.

Recognizing that your company can fall into the trap of letting external factors dictate your success will keep you working on your strategy. You really do control your growth, not Wall Street or the next President. Rising above circumstances requires more than effort. Having a strong sales strategy tied to that effort has virtually a zero percent chance of failure. Of course each company has its own idiosyncrasies that can affect success, but having your sales ducks in a row can mitigate the negative and extenuate the positive. You are in control.

I’ll be sitting with the companies I work with over the next few weeks setting projections. Owners will argue with me and want to push the numbers. My response will be; “Okay, how are you going to pull that off?”. That will at least light the fuse. From there, reality will kick in and we’ll end up with a good, aggressive, yet achievable projection. Which, truth be told, is exactly what both they and you need. Don’t give in to the wishful thinking of pie in the sky expectations. The eventual result is a bad taste in your sales mouth.

Tom Woodcock, president, seal the deal, is a speaker and trainer to the construction industry nationwide. He can be reached at his website: or at 314-775-9217.


Butts in the Seats Marketing: Don’t Obsess Over That and Miss Your Existing Client

in Columns/Marketing/Sales


Stephanie Woodcock

When do owners usually start thinking about marketing? When they need to get more business, correct? When they experience a lull or change in the market or business climate that spurs them to say to themselves (and I’m paraphrasing), “Hmmm…I need to get more butts in the seats.”

But what if owners look at the purpose of marketing a little differently? What about those “butts already in the seats,” so to speak? In other words, what about those customers they already have?

In traditional marketing there is a sales funnel. We market to the masses through traditional and non-traditional means – radio, television, billboards, flyers, social media, electronic marketing and signage. The sole purpose of this broad-reaching campaign is to “catch” as many in that large end of the funnel as possible. Then we keep marketing to that captured audience through drip marketing and ta-da: out comes a sale at the small end of the funnel!

What if we flipped that funnel upside down and started marketing to the core business base we already have? This outlandish idea also flips the definition of marketing on its head. I can hear the objections now (again paraphrasing): “Why spend all that money on customers I already have? I want more and new customers. I’m looking to differentiate and move into new markets. I’m looking at my numbers, and I need to increase volume and sales by XX percent.”

Marketing is part of an overall strategic culture of a company. If part of that strategy and culture is appreciating those longtime clients and the core business we already have, we can transform our sales approach. By spending time and marketing dollars on our core customer base, we help instill a sense of ownership, loyalty and “brand love” with our clients. We fill up that small end of the funnel, invest in our greatest resources and trust they will help spread our message.

While there is a time, place and strategy for marketing to the masses and filling up that large end of the funnel, sometimes we can miss the forest for the trees in the process.  We are so concerned with getting more butts in the seats that we become obsessed with the seat – the height, the cushion, the proximity to other seats and the emptiness. We can’t wait to pack the room with a new, fresh audience of future customers ready to buy that we miss the low-hanging fruit of what we already have.

Part of our marketing plan should be focusing on existing customers and going beyond the status quo in our marketing efforts. If we concentrate our marketing message and dollars on helping our existing customers feel special, they will gladly spread our brand for us. When we start appreciating them, we reap dividends in referrals. Plus, we get to build on an already established platform of trust.

I am a big advocate of referrals and the power of word of mouth. In fact, research shows that 70 percent of buying experiences are based on how the customer feels he or she is being treated. My company has grown through just that – referrals and word of mouth. I have a select few who I thank often for helping me grow (you know who you are). Then I try to do a good (great) job for my clients and see where else that word of mouth takes me. While I like to display your marketing message in as many creative ways as possible, nothing, absolutely nothing, beats word of mouth.

But clients need something to talk about. They need to see a new marketing campaign, a new website or be invited to a carefully orchestrated open house. They need to see a marketing plan in action and feel like they are an essential, intrinsic part of it.

If we market to our clients, if we create a VIP club and appreciate them with our marketing dollars, clever marketing messages, promotional giveaways, happy hours or simply thank-you messages, if we appreciate them the way they deserve, that upside down funnel will start churning out new customers.

We essentially market to the masses as well. We do it through our customers.  Our core clients tell other new, potential customers about the loyalty and brand love they have towards us and ta-da: out comes more sales. In other words, our powerful word-of-mouth message and our strategic culture of making our customers our primary focus helps increase the volume of our sales.

We are no longer marketing to sell to the masses. We are marketing to appreciate our current customer base: the people who keep the lights on. Then we will realize that this forest has a lot of trees. Plus, those new customers we get through word of mouth have been vetted and already believe in our strategic culture because they have started with trust. It’s a beautiful thing when marketing goes from selling to the masses to appreciating the most important.

I’m not advocating removing all marketing to potential new clients. However, I am proposing a new way of approaching marketing. It begins with a company-wide culture of appreciating clients. In this type of culture, the main goal is appreciating those we already have rather than despairing over those we don’t have. Potential customers know when they are being oversold to. In the same way, they know when they are being appreciated. How we frame our marketing messages to both segments can make all the difference.

With this approach, the new clients will come. They will wonder what all the fuss is about. They will see all those butts in the seats and wonder why they are all being treated so well. Instead of being sold to, they will see and hear all about the brand loyalty and brand love that they are missing out on.

Benjamin Franklin famously stated, “Well done is better than well said.” We can say all we want in our marketing messages, but the people who have walked through our doors and experienced our service and product firsthand are the best messengers. They can testify to the fact that our companies are “well done” as opposed to just “well said.”

Stephanie Woodcock is president of Seal the Deal Too, a St. Louis-based marketing, creative & communications firm. She can be reached at .


Cold Calling is Dead, Networking Lives

in Columns/Marketing/Sales

By Tom Woodcock

Tom Woodcock

For decades, people have tried to find business through the painstaking process of cold calling. I battle old school sales managers all the time who swear that cold calling is the way to go. Think about it: Do you like someone coming in and interrupting you –when you’re in the middle of working on a project – and trying to sell you tools? No! Then why would you think someone else would?

Don’t get me wrong. I grew up as a salesperson by cold calling my little guts out. Back in the day, we had no choice. Our lead source was the Yellow Pages. We hoped we would be greeted by a cordial receptionist; more often than not, the prospect’s building sign was the only advanced information we had. This made cold calling not only necessary but mandatory.

The ability to get advanced information on today’s potential customer is at its highest level in history. Via the web, you can secure company information, market presence and even contact information. This eliminates much of the need for a cold call. The issue here, however, is that you lose the physical presence with your would-be customer.

With that in mind, you need to find a way to accomplish this in-person connection in order to gain your initial meeting with the prospect. The best way to do this? Go backwards in order to move forward. Use your associations, organizations and chambers of commerce as resources. Yup, that’s right. Pools of people. Add your own customized network of contacts and you have a leads machine. Consistently attending events, happy hours, business breakfasts and business group meet-ups is paramount to finding opportunity. There are some qualifiers, however, to keep in mind so you don’t waste time and effort:

  1. Customer-rich? Does the event appear to be attracting customers or potential customers? Though often you’ll never really know until you attend, promotional media will give you an indication of the function’s target market. Customer-rich environments are always your best shot at direct business opportunities.
  2. Network development potential? Are there going to be current or potential network contacts in attendance? These are individuals who also sell to your customer base. They can be great sources for introductions and inside information. Your personal network should include a high concentration of these types of individuals.
  3. Association affiliation? Events that are hosted by associations are often well attended. They tend to cater to specific groups, so it’s a bit easier to qualify attendees. Many times the events are limited to members and their guests, but every so often they’re open to visitors. Grab those opportunities.
  4. Known host? These are events hosted by well-known individuals or companies in a particular industry. People will attend because they know historically that this host has strong networking meetings. Some hosts have a knack in setting up these programs. Why reinvent the wheel? Take advantage of their expertise.

Simply using these four criteria will produce results. At that point, it comes down to your personal approach to networking. You have to develop a methodology that you’re comfortable with and matches your personality. Some people can simply own a room. Others? They need a good, structured plan of attack. Either way, it’s best to attend with a little information and strategy. Here are some tricks to get even more bang for your buck:

  1. Get there early. Check out those nametags and select a couple of targets you want to approach.
  2. Ask for permission to call. Politely asking if you can contact a potential client goes a long way. Do not be challenging or confrontational; you’re hoping to obtain permission to contact them.
  3. Use your existing network. Connect with those who are already in a network relationship with you and leverage that existing relationship in order to meet new contacts. This is the easiest way to gain new contacts.
  4. Stay late. A lot happens after the scheduled meeting is over. Those who hang around tend to be more open and share more freely in their discussions. This can provide an inside track on potential projects or opportunities.

I’m a firm believer in the power of networking. I feel that if you combine a good physical network of contacts with a functioning electronic network of them, you’ll have the basis for a well-oiled, lead-generating machine. Finding business opportunities should be a primary goal that all companies share. Without leads, there aren’t sales. Without sales, there aren’t projects. Without projects, there aren’t contractors. Continually priming your network will result in a steady stream of leads and prospects. Undervaluing the power of networking can not only be shortsighted but may result in your business’ decline. Forcing a “cold call first” mentality displays a dated sales approach. It also reveals a weakness in network development. With the increase in communication and social connection, it is far easier to find as well as secure sales leads than it ever was.

The final piece of the networking puzzle is this: Be sure to follow up on the information you secured at the networking event. This, of course, is assuming you gained some information. What good is information that you never act upon? It happens all the time. Taking the time to make the phone calls and get the appointments is where the real rubber meets the road.

Not turning networking information into business is inexcusable. The discipline to attend networking events must be followed by the discipline of acting upon the results. A healthy sales effort includes between four to eight networking events per month. That’s roughly 50 per year! I find it hard to believe that kind of networking commitment will not produce results. As a matter of fact, I know it will because I do it myself. The results have been impressive, and it will always be a part of my sales regimen.

How’s your network producing?

Tom Woodcock, president, seal the deal, is a speaker and trainer for the construction industry nationwide and is author of “You’re Not Sellin’, They’re Buyin’!” He can be reached through his website, or at 314-775-9217.

Build Brand Love by Taking it Up a Notch from Good to Great Marketing

in Columns/Marketing/Sales


Stephanie Woodcock

Companies hire marketing firms for many reasons. Some are obvious. They want to freshen their brand, broaden market awareness, increase lead generation, drive sales and “take it up a notch.” Many times companies decide to reach out for help in marketing when they want to gain a foothold in a new market, have an upcoming anniversary, notice a drop-off in sales or need a whole new brand and direction. While all these goals and needs are important, there is no “silver bullet” marketing technique that will stun the customer base into handing over their business. Before results can be measured, we need to step back and evaluate why we want those results. What is our real motive and measure of success?

Effective marketing requires a “long game” approach, where both parties sit down and assess the big picture and long-term goals before diving into the details. It’s more than listing sales goals and last year’s YTD numbers. It’s about asking key questions such as the following:

  • How does my company’s brand, big or small, make a difference and impact in the world?
  • How does my company’s vision align with the vision of my employees and my company’s culture?
  • What does my brand provide customers and employees beyond a product or service?

Answering these macro-level questions is the start of building Brand Love. Surprisingly, many times a mission statement is just words on a wall, not a company culture and daily vision. Brand Love embodies that mission statement with a sense of purpose and connects employees and customers around that purpose.

Brand Love is when a customer experiences a bond with a company’s values and mission through its messages. This is marketing at its best. It’s when the message goes beyond selling and connects clients to the real reason and vision of that company’s driving goals.

Brand Love is achieved by building on brand loyalty and can be accomplished through a variety of marketing objectives. This is where the marketing professional can dive into the details.

Good marketing helps create brand loyalty. Many companies have a good, solid marketing plan that helped gain a loyal following. Great marketing helps create Brand Love. Fewer companies achieve this kind of recognition. Brand loyalty is when customers trust your services and reward you with their repeat business. Brand Love engages the clients, tells a story and offers a clear, concise vision that is more than a product or offering. It creates a partnership with its customers and enables trust, security and hope in its brand. This keeps a customer for life and protects against the commoditization of the company’s product or the clients coming and going with a particular salesperson.

This is a good indicator whether or not a company has achieved Brand Love. If a key salesperson leaves a company and takes much of his or her book of business, then that company hasn’t done a good job at creating a partnership and trust with its clients.

Building Brand Love requires more than bullet points on a sell sheet. It requires a vision that aligns with the goals and internal culture of the company and a vision that is consistent, transparent and relevant. No touch point is too small to build Brand Love and tell the company’s story.

One exercise I conducted with a client helped differentiate between brand loyalty and Brand Love. As a team, we came up with 10 different touch points or marketing techniques to unroll our recent campaign, such as lunch and learn sessions, sales flyers, social media, event engagement and electronic blasts and contests. Each one of these techniques was designed to provide helpful information about our product and would help create brand loyalty.

Then we created two columns and explained exactly what we wanted to achieve through that technique and how each would create both brand loyalty and Brand Love. This exercise was really helpful in showing the difference between the two. It forced us to look beyond the obvious marketing tool and “take it up a notch.” One is based on logic – on features and benefits. The other is based on emotion – on engagement and instilling a sense of purpose. The insight gained through this exercise was immediate. Now with each new marketing objective and message, we think first about what we can do to make it a little better and increase our Brand Love. It’s taking the marketing techniques from good to great.

The overall goal is still achieved. We broaden our market awareness and increase our lead generation, but we also deliver our message with an extra level of care. We try to surprise and delight our customers rather than just promote or sell to them. While it may not be the “silver bullet” of marketing, Brand Love safeguards against commoditization, creates a community with the client base and adds to overall long-term goals.

Stephanie Woodcock is president of Seal the Deal Too, a St. Louis-based marketing, creative & communications firm. She can be reached at .

Contractors: Did You Know That Your Whole Company is Selling?   

in Marketing/Sales
Tom Woodcock

Sales is an all-inclusive, company-wide effort. Anyone having direct or indirect contact with the customer influences the customer’s buying experience. Failure to demonstrate value in virtually any area of the company can cause the customer to head in another direction. Departments such as accounts receivable, reception or even transportation (drivers) play a bigger role than many companies realize. Direct contact positions such as project management and estimating can acutely affect the customer experience. In construction, so much of the focus is on the project itself. The scope, schedule and costs are at the forefront. What can be lost in the details is what the customer is feeling throughout the project. Not having the sales skills to handle customer personnel may mean the company’s front-end sales efforts have been in vain, and prolong the endless cycle of having to be low bidder. That’s if the relationship isn’t damaged to the point of elimination from the bid list.

Taking the time to train all company personnel in relation to their role in the sales process accomplishes at least three key objectives:

  1. Creates a Company Sales Culture – Many companies sell but few have an actual sales culture. A company-wide sales culture is an understanding that sales are the most important aspect of any business. Cultivating and protecting customer relations is a top priority. The desire to meet and exceed customer expectations permeates all departments and personnel. This ensures the customer will feel well served and appreciated. All staff responsibilities are measured against the ultimate impact on the sales experience each and every customer has.
  2. Breeds a Unified Team – If everyone is pointed in the same sales direction with the same sales focus, a sense of achieving a common goal is realized. Staff members hold each other accountable and encourage one another. Sales and administrative personnel respect each other’s role. Employees become more supportive of each member’s role, knowing the sales success of the company is at stake. Understanding this affects everyone’s financial position.
  3. Instills Customer Confidence – Customers notice the sales cohesiveness of the company and feel they are being taken care of. Though basic in nature, trust and security are a big part of the sales experience. The more consistent the communication is company-wide, the more secure the customer base will remain. Customers entrust the company with their projects and funding. Consistency is the core of sales trust.

The strength of a company’s overall sales effort can make the difference between strong and weak profitability, growing and flat revenue and large or small market share. These are the drivers of business success. Having an entire company that understands the critical nature of sales and respects the role each person plays is exceptional. I rarely see it in my travels, but I have witnessed it in the construction industry. Contractors who engage in these practices reach high levels of sales success. Many achieve it for generations. An authentic sales culture becomes more than just the company culture; it establishes a firm’s corporate identity. This becomes the company to beat, the contractor no one wants to bid against. When that company is spotted on a bid list, competitors drop off and choose not to bid. These are the elite contractors. Sales excellence permeates project performance, estimating and vendor relations. It is not a stretch to link a strong sales culture to virtually every aspect of the business.

Finally, a strong sales culture can drastically influence your marketing results. Marketing in itself cannot become a sales effort. However, a marketing message embraced by a staff well trained and educated on the importance of sales goes a long way. Employees reinforce that marketing message when speaking with customers and even go out of their way to communicate it and this can magnify the overall marketing campaign, gaining greater reach and penetration for the firm. The thought that your marketing isn’t working because your internal staff doesn’t perceive the sales value is a foreign concept to most contractors. It would be like working for Apple, supporting Apple’s marketing campaign but buying a Samsung for your personal use. That one sale makes a difference, small but real. A staff that understands the importance of each customer – and even more so, each sale – will embrace the marketing message.

Making sure team members are aware of the role each plays in the sales process is an indicator of a company with a mature sales culture. Most will think it’s trivial and do nothing to improve the climate. They’ll continue to irritate the customer base and wonder why they have to fight for every project, often placing the blame on the customer. It’s not that they don’t want results; they simply won’t invest the time or resources for the training. Those companies that do will create an edge very few will be able to compete against.


   Tom Woodcock, president, seal the deal, is a speaker and trainer for the construction industry nationwide and is author of “You’re Not Sellin’, They’re Buyin’!” He can be reached through his website, or at 314-775-9217.

All For One Monthly Payment: Beware of the All-You-Can-Eat Buffet of Managed IT Services

in Technology
Joe Balsarotti

A business called me last month, unhappy with their present information technology provider. The why of it isn’t important. What is important is that the business is contemplating a switch – its second such change in three years.

The present tech company signed them up for a “managed service” plan. We’ve discussed that buzzword before; it’s a laundry list of tech bundled together for a monthly fee. In many cases, it’s really a list of things that probably shouldn’t be bundled together. Security software, firewall, backup equipment and cloud storage tossed in with equipment maintenance, software updates and help desk services all in a neat bundle, tied up with a bow and “all for the low monthly price of $$.” It may be a great deal for the vendor, but absolutely not for this client…and probably not for you, either.

As we looked into the business’ setup we found that it doesn’t own its backup appliance and it doesn’t have control of its cloud-based backup data. The business also assumed its firewall was up-to-date. Not so; the vendor had only enabled the basics, not the data-filtering options available on the device that required a subscription to enable. It is relevant to note that even though the customer had been hacked a couple of months ago, it had not engaged the advanced firewall features. Even the endpoint software (formerly known as antivirus software) is billed monthly and the license isn’t in the customer’s name. In other words, the customer’s livelihood is dependent upon rented products and services from its current IT company.

How can a customer disengage from a vendor who isn’t to its liking? Unfortunately, the business customer has to throw money at the problem – unfortunately a lot of money in this case. In order not to get stuck like this again, the business will need to buy endpoint licenses a second time. The initial buy is more expensive than a renewal, but this vendor advised the business customer to cancel its existing licenses, assuring the client that the vendor would simply bundle in the cost with the client’s contract. This probably made for an easy initial sale, but like that old FRAM oil filer ad, “You can pay me now, or pay me later.” In this scenario, the later is a much bigger bill when the customer’s honeymoon with its tech vendor is over.

Because of the bundling, the customer had no idea that its firewall wasn’t being used to its capacity, nor did the client know how involved getting its backup data moved to a device it owns and a service it had control over would be. All of these issues are solvable, but it results in a sizable up-front cost. This story illustrates that the customer’s hands-off approach to the IT firm left it vulnerable because everything moved behind the scenes. Without those pesky old, internal discussions about replacing aged equipment or buying new versions of this or that, as the customer write a monthly check to the tech vendor thinking it was covered, the customer lost touch with the infrastructure its business depends upon.

All in all, we calculated more than $4,000 for this twenty-something-member company, just to undo the mess created by the “all for a low monthly fee” shtick. Beyond that lies the cost to audit the client’s IT network to see what other problems may exist with software licensing, security or network setup and to document and onboard these issues. If the business customer hadn’t been sold on the monthly contract, it would have been in a far better position when it chose to switch tech providers because the software licenses, services and equipment would have been in the customer’s name and it would have possessed keener insight as to what it was paying for.

I understand that managed service is all the rage in the IT world. At conference after conference, managed service is unabashedly sold as how to make money for not doing much. In theory, the vendor automates everything; once an IT vendor creates the defined set of services for its first customer, the pattern is copied for all the rest. If your business is basic, managed services may be a good fit as it does offer predictable costs and basic technology needs are well met. Unfortunately, it can also mean that customers with unique needs, custom software or equipment – or for whom time is more valuable than for an average business – aren’t going to get the level of response they require since those businesses don’t fit the cookie cutter approach.

The nightmare begins when the customer discovers that its vendor is not a good fit, or worse, doesn’t fulfill its obligations. What happens if the IT company goes out of business or is bought by an out-of-town firm and local support evaporates? Is easy budgeting for technical services more important than getting the best product or service for your company’s particular needs? Or, do you need to retain the keys to your own kingdom?

Is your business prepared to pay significant money to move on if something goes badly? Be wary of the all-you-can-eat buffet of managed IT services. Know what elements your business has control over and what you don’t. Know the costs involved beyond the monthly fee and how much a breakup could set your business back.

I welcome your questions or comments at

Joe Balsarotti is President of Software To Go and is a 37-year veteran of the computer industry, reaching back to the days of the Apple II. Balsarotti served three terms as chairman of the National Federation of Independent Business’ (NFIB) Missouri Leadership Council, as chairman of the Clayton, Missouri Merchant Association for a dozen years, chaired Region VII of the Federal Small Business Regulatory Fairness Board and currently serves on the Advisory Panel of the ASCII Group, an organization of more than 1,000

What’s All This Talk About Encryption?

in Columns/Technology

By Joe Balsarotti

What does the Apple­–FBI fight and the ransom paid by a Hollywood area hospital have in common? Encryption.

The data stored on the Syed Farook’s iPhone and the data at Hollywood Presbyterian Medical Center are both encrypted, the former by design and the latter by malicious hackers.

The lure of privacy and keeping prying eyes away makes encryption a tempting solution, even if no encryption scheme has ever been foolproof. The federal government, through the HIPAA (the Health Insurance Portability and Accountability Act), even wants most patient data encrypted, and yet the FBI wants to break the encryption on mass-murderer Farook’s iPhone.

Encryption is a two-edged sword. It can be used to protect a company’s information, but it can also block a company from getting its own information. When a hard drive fails due to a hardware problem, encrypted information is rarely recoverable. If backups fail, there could be irreparable damage to a business because of the loss. Or, the hardware could be fine, but a disgruntled employee can use readily available tools to encrypt a business’s data and leave the company high and dry.

International organized crime has found encryption to be a very lucrative tool, hence the rise of Cryptolocker and like viruses and malware. “Pay us and you get your data back”; don’t pay and you or your business are at the mercy of having backups with enough versions to extend past when the infection first hit your systems. Of course, that assumes your business *has* backups which have been tested and verified.

Without getting to far into the weeds of the Apple vs. FBI saga, suffice it to say that battle isn’t over encryption, it’s over the iPhone’s setting to destroy it’s data if ten incorrect passcodes are entered. Since today’s computers can easily crack any passcode within a couple of days by trying every combination, the illusion of security in Apple products lie in the balance. Give the FBI a way around the self-destruct and the Apple products are no more secure than anything was before the digital age.

Now, back to the encryption conundrum. Until the digital age, nothing was truly private. Any safe or vault could be picked and any code could be broken, eventually. In the digital age, encryption has become both a blessing and a curse, but there’s no denying that it enables a level of privacy that didn’t even exist  fifty years ago. Those who’ve only lived in the digital age take this privacy as a given and don’t want to see it’s power eroded. Those who remember ‘loose lips sink ships’ know that no information was truly safe in the past, and breaking the other side’s code often meant the difference between life and death.

For a company, encrypting data on mobile devices such as notebooks, tablets, and phones is a prudent move as those devices are easily lost or stolen. However, your data should never be only on such devices. Mobile devices should either have to connect to access the data, via a VPN (Virtual private network), remote access tools like Teamviewer, LogMeIn, or Remote Desktop, or to one of the secure cloud based services. In other words, either store the data stored elsewhere, but have it accessible to your mobile device, or encrypt the mobile copy.

Once important data is encrypted, the key to that data is invaluable. If you as a business owner, encrypt your company data and something happens to you, who on your staff also has the key? If you get hit by the proverberial bus, and no one has the decryption key, how does the business survive without the data you deemed important enough to encrypt in the first place? Restoring a backup won’t help as those backup files would be encrypted and also require the key to be readable. In your personal life, does you family have the keys and passcodes to get into your digital files if you’re incapacitated or no longer around?

Everyone can agree that you should have multiple levels of backups for your business. Whether to encrypt some, all or none of  your company or personal data is a much harder question.

If you’re interested in the specifics of the incidents I mentioned, here are the links:

I welcome your questions or comments at

Joe Balsarotti is president of Software To Go and is a 36-year veteran of the computer industry. He served three terms as chairman of the National Federation of Independent Business’ (NFIB) Missouri Leadership Council, served as chairman of the Clayton, Missouri Merchant Association for a dozen years, and chaired Region VII of the Federal Small Business Regulatory Fairness Board. He currently serves on the Dealer Advisory Panel of the ASCII Group, an organization of over 1000 independent computer and technology solution providers in North America.

Do You Have A Plan to Refresh Your Technology?

in Technology
Joe Balsarotti
Joe Balsarotti

It’s hard to believe any business nowadays not being computerized. After all, without a website or at least email, it would be invisible to the vast majority of the public. Even businesses that get their customers solely from referrals have to be able to communicate in a way that customers and prospects prefer.

Those of us old enough remember the switch to computers. It usually started with an accounting system, maybe BPI, Great Plains, Timberline or Accpac. The time spent on finance and accounting went down significantly as adding machine and ledger paper were replaced. Then came word processing and the days of carbon paper were gone. CAD/CAM drastically reduced time to design and reduced errors. Local area networks started becoming commonplace in even small offices and everyone had access to the data without having to wait for someone to get done with ‘the file.’

Back in the very late ‘70s to the early ‘90s, it was easy to justify the expense of computer technology. The benefits went almost immediately to the bottom line, expanding abilities and reducing labor costs. ‘Selling’ management or the owners on buying equipment and software was an easy task. Technology planning meant calling a rep, getting a quote and saying yea or  nay, then starting the whole process again from scratch five to seven years later.

Some years ago, I had the opportunity to meet Dan Bricklin at an industry conference. You’ve probably never heard of him, but you certainly know the results of his invention, Visicalc. Yes, imagine a world before spreadsheets. The digital marriage of a sheet of ledger paper and a calculator was the brainchild of Mr. Bricklin. During his presentation, he was asked one of the best business questions I’ve ever heard at a tech event (tech events tend to be very techie rather than bottom-line oriented) “How did you arrive at a price of $499 for Visicalc?” He replied that those were the days of timeshare computing and that an hour of computer time was expensive. So, he calculated the average three-month cost for timeshare services then worked backwards, subtracting the cost of an Apple II computer, monitor, disk drive and printer. The result was a difference of about five hundred bucks, so $499 became Visicalc’s price.

Bricklin wanted the selling of Visicalc (and everything necessary to use it) to be a no-brainer. Why, after all, would any company want to pay to rent computer time when in just three months they could have their own system free and clear?

Nowadays it seems the benefits of newer technology are much harder to calculate. How much productivity does your business really gain if an older machine takes two more minutes to start up in the morning than a new one would, or printing takes an extra minute? Realistically, is your staff ready at the first minute of the workday or are they getting coffee, arranging their desk or hanging up their coat anyway?

The gains of new technology for businesses seem to have hit an inflection point. Now, it isn’t how much more you’ll gain as much as how much your business could lose by not keeping current. All those columns I’ve written about security, backup, and data loss might be coming to mind for you right now (at least I hope so). Downtime is an expense and a costly one. What price do you pay if a machine goes down and leaves an employee unproductive for a day? What if that machine is your server? Hard drives have finite life spans, so do cooling fans. They will eventually fail and that means your staff can’t get work done. Parts availability might become a problem with older systems. Even if the parts are available, how long to get them, have the repair completed, and the data restored? Time is money, after all. What’s your plan to deal with a failure?

Security also is a concern on older systems, as is compatibility with newer systems within your organization or those of your vendors, clients, and prospects. It’s hard to calculate the damage if your proposal looks like gibberish or is formatted wrong, because you were running a five-year-old version of Word or Acrobat, but it’s easy to calculate the loss if you miss a deadline because of system failure.

Businesses should have a written plan for a technology refresh. Some businesses can get by with a once-a-five-year refresh if their systems and internal procedures are very solid and scripted. Others, especially ones with more creative aspects such as design and architecture, need to replace machines along with each new version of their primary design software as each version adds new features and therefore requires more power from the hardware.

Even Internet access requires technology refreshes. How many of you have the same firewall from an old DSL connection running a newer cable or fiber line? If so, you are getting half of the speed you’re paying for because the firewall can’t scan the data at the speed of your line. Security improvements aside, a five year old firewall is a dinosaur and if not costing you money, is keeping you from getting what you’re paying for each month.

So, work with your tech provider, develop a plan and stick to it. If your technology people aren’t proactively working with you already in this regard, it’s probably time to find a new provider who can be a true partner for your business. A tech refresh plan will allow you to budget for necessary improvements and go a long way to keeping your company secure and up-to-date.

I welcome your questions or comments at

Joe Balsarotti, president of Software To Go, is a 36-year veteran of the computer industry, reaching back to the days of the Apple II. He served three terms as chairman of the National Federation of Independent Business’ (NFIB) Missouri Leadership Council, was chairman of the Clayton, Missouri, Merchant Association for a dozen years, chaired Region VII of the Federal Small Business Regulatory Fairness Board, and currently serves on the Dealer Advisory Panel of the ASCII Group, an organization of over 1000 independent computer and technology solution providers in North America.

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