Diversification Fallacy?

Tony Shelton

Tony Shelton

BS Detector, Esquire
Are we damaging our industry by encouraging diversification rather than encouraging specialization?

For example, here in Las Vegas we are finding that the guys we work with are beginning to specialize. One of them has gone to KEC work. Another has gone into concrete coatings, and one has gone to driveways only.

I know this may not work as well in smaller cities, but it is working well here. Instead of a bunch of contractors who do a fair job at a variety of tasks we are becoming contractors who do a GREAT job at a few.

The work still comes. But now it comes from within our own community. When our customer needs their concrete sealed we know who to call. KEC? We've got a contractor for that. Coils? I get the call. Flatwork, they call Chris. It allows us to fine tune our talents and work on raising our profit level by perfecting our techniques and charging prices that can reflect the high quality of work.

What do you guys think about this?
 
It takes time and experience to be good at anything. Yall big city folks can specialize in certain things and survive and thrive. Us small town guys have to spread it out a little bit to stay busy. I agree spreading your services out too much can hurt you in the end.
 
To keep busy in the smaller cities, you have to offer different services where in a larger city you can specialize in less services and since there is so much more potential for customers in both residential and commercial, there is enough work for specialization.
 
No. What damages the industry is the guy that doesn't get the proper training in what he diversifies into. You can specialize in one thing, but if your not a "specialist"' in that one thing, you'll damage the industry.

Encouraging them to diversify doesn't cause damage. Diversifying ads more revenue, creates more jobs, feeds more families, etc

Not offering, having available and encouraging, (almost demanding, without gov't interference mind you,) proper training does.
 
Ron Musgraves said:
I think its all still depending on the individual.

I prefer the way I operate because it makes it easier for training.
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True....but was there ever a time you diversified even just a little maybe, when you started out.


Doug Rucker Clean and Green Solutions 281.883.8470
 
There are advantages both ways. I have typically had target areas, but was willing to do anything legal and moral. I have found that have been able to use knowledge that I have gained from other areas to make my life simpler in my prime market. For instance, grease removal in a parking garage is a lot easier and more efficient, because of knowledge I gained when I used to wash fleets. Logistics and organization that I use now was learned delivering milk and materials. Now, I don't do just anything, because I don't have to. I can refer and help others do the things I don't want to do.
 
Scott Stone said:
There are advantages both ways. I have typically had target areas, but was willing to do anything legal and moral. I have found that have been able to use knowledge that I have gained from other areas to make my life simpler in my prime market. For instance, grease removal in a parking garage is a lot easier and more efficient, because of knowledge I gained when I used to wash fleets. Logistics and organization that I use now was learned delivering milk and materials. Now, I don't do just anything, because I don't have to. I can refer and help others do the things I don't want to do.
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No one gets that Scott, guys do not understand once you have mastered what you do its a hassle to mess with the other stuff.
 
Something that really hurts the industry a lot is guys getting into the business, probably even properly trained but is doing this for "weekend money" since he has a full time job still so he does not have the overhead and does not care about industry pricing because he does not have to pay bills or feed his family from this new business. This type of thing happens all around the country and a lot of them eventually get out of the business but now the pricing has been butchered and people expect to pay this kind of lowball price for quality work.

When I bid on jobs where this has happened and they say how much the last guy did it for, I don't want to bash the guy because I don't know him, he is probably not trained right and did not know what to properly charge but I don't want to be seen as someone talking bad about other contractors in customer's eyes.

What is a proper thing to tell the customer when they talk about the lowball price?

I have heard to ask, have you called that guy back? I have had some people tell me that they cannot get a hold of the previous guy, either the phone is disconnected or he tells them that he is not in the business anymore.

I would like something professional to say about those lowballing prices, anyone have ideas? Thanks.
 
Christopher said:
Something that really hurts the industry a lot is guys getting into the business, probably even properly trained but is doing this for "weekend money" since he has a full time job still so he does not have the overhead and does not care about industry pricing because he does not have to pay bills or feed his family from this new business. This type of thing happens all around the country and a lot of them eventually get out of the business but now the pricing has been butchered and people expect to pay this kind of lowball price for quality work.

When I bid on jobs where this has happened and they say how much the last guy did it for, I don't want to bash the guy because I don't know him, he is probably not trained right and did not know what to properly charge but I don't want to be seen as someone talking bad about other contractors in customer's eyes.

What is a proper thing to tell the customer when they talk about the lowball price?

I have heard to ask, have you called that guy back? I have had some people tell me that they cannot get a hold of the previous guy, either the phone is disconnected or he tells them that he is not in the business anymore.

I would like something professional to say about those lowballing prices, anyone have ideas? Thanks.
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That is our standard price based on the scope of work you have requested based on our ??? years of experience and commitment to excellence. Our pricing structure is one that allows us to maintain our integrity while not compromising our value of service and quality of workmanship. While it is our goal to be your only company for years to come, we also understand that may not always be feasible and would certainly understand if you needed to continue your relationship with your previous company......
 
That sounds good Doug, thanks.
 
Went specialty years ago (98') and it no question was the best choice for us. Focusing on a niche makes you the expert in the field. With that comes more credibility, better close ratios (assuming you can sell), more money and and more streamlined business. Naturally we still tackle a lot of pressure washing projects but it's never been something I've marketed for. It's always came to me.

In 2011 I broke apart a new division of the company to tackle the pressure washing side and I did it primarily for marketing purposes. Now I just have to get over someone willing to clean a Starbucks for $100 a pop :scratchhead: (just bid 10)
 
Greg Rentschler said:
Went specialty years ago (98') and it no question was the best choice for us. Focusing on a niche makes you the expert in the field. With that comes more credibility, better close ratios (assuming you can sell), more money and and more streamlined business. Naturally we still tackle a lot of pressure washing projects but it's never been something I've marketed for. It's always came to me.

In 2011 I broke apart a new division of the company to tackle the pressure washing side and I did it primarily for marketing purposes. Now I just have to get over someone willing to clean a Starbucks for $100 a pop :scratchhead: (just bid 10)
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100 a pop is good money, 15 minutes per
 
Greg Rentschler said:
Went specialty years ago (98') and it no question was the best choice for us. Focusing on a niche makes you the expert in the field. With that comes more credibility, better close ratios (assuming you can sell), more money and and more streamlined business. Naturally we still tackle a lot of pressure washing projects but it's never been something I've marketed for. It's always came to me.

In 2011 I broke apart a new division of the company to tackle the pressure washing side and I did it primarily for marketing purposes. Now I just have to get over someone willing to clean a Starbucks for $100 a pop :scratchhead: (just bid 10)
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Here it's 90$....120$ if you reclaim.
 
$50 is ok here for the small ones. They are weekly or biweekly. One guy can knock out 4 in an hour.

Starbucks was one of Chris' earliest accounts. After this initial cleaning at a Starbucks and a sub shop next to it he could knock them both out in 15 minutes a week.

 
Ron Musgraves said:
100 a pop is good money, 15 minutes per
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Guess my quote of $330 was a bit out of line then huh..... I just can't seem to bring myself to send a crew to a $100 job for a one time cleaning. I figured 45 to an hour each. Drive thrus were black and nasty and the patios and walks had gum.
 
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