How many times have you uttered that all too familiar phrase; “if I only had more calls?” I have heard it countless times. Just this week, I heard an owner say with great certainty, “there is nothing wrong with this company that a bunch more calls wouldn’t fix.” Well then, our work is done—let’s just wait for the phone to ring—in 2010—if you are to believe the economists.

Now, I will be the first to admit, running a service business is a lot more fun when you have an abundance of calls. You can hold firm on pricing, charge dispatch and diagnostic fees to further qualify customers; even increase your pricing. Lots of calls means you can justify the hiring of inside staff to take the pressure off you in the day-to-day operations of the company. Yes, having an abundance of calls is a goal every service company should have. It just makes life a lot more fun…and profitable!

In my first article on Markup, I revealed that PHC contractors earned an average of only 2.7% net profit on gross sales before taxes. Evidently, this information shocked quite a few readers, judging by the letters I have received from contractors around the country, as well as conversations over the phone and in person. Typical comments were “sad,” “ridiculous,” “stupid,” “inadequate,” “we ought to have our heads examined,” “what can we do about it?”

What we can do about it, of course, is to educate ourselves to become better businessmen. That is the point of this series of articles, and it’s time to get down to the task at hand by learning one of the most important business skills of all – how to figure markup.

In the last issue of the Buzz I mentioned the need to associate with a group of people that can help you with your business. One such associate of mine is a very gifted man I met while attending Nexstar’s famous Gold Star Academy (a course on Service Management). We were both students at the time and we both ran similar sized union businesses.

Bill Raymond, of Frank and Lindy Plumbing and Heating Service Company, not only runs a very profitable business, he is also a very talented trainer. During a subsequent training session, Bill told a story of a fictional logo character named “Jack Stone.” For a period of time Jack Stone became a model for our company, mainly because of his famous slogan “Can Do, Will Do, Done!” Our company took on this slogan to help us stay focused on what we could do at our business.

You may have heard the saying “People buy from people they like.” It’s true, it’s so much easier to sell when you have a positive sales relationship with your clients. This benefits are two-fold as well – the relationships you create make selling easier and more natural, but can also increase your sales by increasing your referrals.

How do you build sales relationships?

Start with a targeted list of prospects. Take the time to qualify them as good prospects for your company. Knowing your target will help you identify your client’s needs and ensure you’re the best fit for taking care of those needs as well.