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Keeping it local7/19/18
In business 10 years. 3 staff and me.
Custom mid to high end joinery mix of renovation and new build.
Situated 10km from CBD.
Up until now have done work within about 30 kilometre radius. sometimes ending up on other side of city. Over the years traffic has continued to build and now it just seems terrible. If you pick the wrong time of day which is generally on the way to a job and then on the way home traffic is bad. You can end up sitting in traffic for 1+ hour. I never used to do work in the country area because of the distance but it's now more favourable to me because even thoughts its awhile away you know how long it will take to get there and back!
I have been thinking about doing work only in the local area. Keeping costs competitive, advertising locally and pushing the business into only the surrounding suburbs within 15 minutes.
Anyone had any experience with this?
The issues I see is that the customer base will reduce dramatically and I'll have to turn a lot of people away. I might lose builders who end up working everywhere or maybe they will still use me for jobs within my area.
Plus side is not getting stuck in traffic, being close to base someone can run out a repair to site on the day and it's not a big deal. Spend a lot less time on the road on productive work.
Has anyone tried this out?
Almost all of our work is an hour away so we price knowing this. If we do a local job we give a break on the pricing knowing that we won't have as much travel time involved. So for you if most of your jobs are local and you bid a job that is an hour away and you think you will have 3 days on the job then put in money for 6 hours extra time, extra gas, and something for wear and tear on your truck. This amount would probably be around the $500 range. On a whole house $500 shouldn't keep you from getting the job if builders like working with you and your quality is good. This is the key. Like I said we are an hour away and we price this in. There are several cabinet shops within 10 minutes of where we work but we still keep a backlog months long most of the time and I have 12 guys in the shop plus 2 installers. We can charge a little more than the other shops but builders would rather work with us because of quality and service.
Where is 10km from CBD? Maybe you are already working on the local marketing since that doesn't mean anything to me, LOL. It will depend on what price point you work at, and what the local demographic is. Sounds like traffic is your biggest complaint. Get a sleeper compartment on your truck and travel off hours. Not a lot of shops are successful after turning away a lot of people and loosing builders at the same time. On a builders job, wouldn't it be very easy to travel during the night, get a room near the location, then get out the same way? Especially if it's a whole house job. I've just never heard of turning away business because the shop doesn't want to be on the highway.
You can use Facebook Ads and target customers within any radius of your zip code you desire! Easy and cost effective to do.
Yes, what is 10 km from CBD?
We developed a ring marketing plan. We listed towns around our shop and determined the ones with better sales potential, and then went outward. We had three rings, and focused on better potential areas. We simplified our product to appeal to more prospects. Back then, we did postcard direct mail and marketed heavily to past customers for repeat and referral business. Today, we would use ppc and targeted internet marketing.
CBD = Central Business District?
Ahh this new texting world. Everyone assumes everyone else knows the acronyms and initialisms (you can look that one up........I had to !).
Sorry for the acronym. I think it's an Australia thing not a texting thing. The middle of the city has been the CBD since forever over here.
Rich.C. Sorry but I'm not really interested in sleeping in my truck so I can do a job many miles away. I have a house and family that I would prefer to spend time with then in the back of a truck. Only to get to the job, Install and find that a door is scratched and I have to come back anyway. If the job was down the road. Big deal! +the cost of taking my guys out, putting them up in a room and paying god knows what in wages. I can't see that being profitable.
Rick Kuban thanks for the thorough explanation. Sounds good. Was there a transition period where you continued to take on the undesirable work while establishing the local business or did you go cold turkey and straight into it?
The only major issue I can see is the builders that do some work in our area and some work not. To say yes to this job and no to that one. I think they would want someone to take care of everything.
We have the same problem chipbored, we are only 25miles to city center but our work radius is a ring of 35 miles in every direction around the city.
It is an absolute nightmare with scheduling, materials, and estimates and our commercial customers and architects typically are not understanding.
One line of thought I have is just pricing individual jobs differently. I already absolutely whallop running trim as it is labor intensive and all on site work other than the milling/finishing at the shop.
I try to be very competitive on fast install items like reception desks and cabinet pieces that can be built in one piece(run of base cabinets pre-ganged up at shop and furniture dollied in and set for example).
I've switched to outsourcing some shop work as well as a resignation to the fact that I'm going to be stuck on the road. Unfortunately being there to interact with superintendents and others on site is a necessity. Presentable sober install labor is very hard to find, shop work a little less tight of a market.
Chipbored, definitely a transition first in terms of marketing focus. My business was aimed at end users. Transition included being more selective about customers and the work accepted in the less wanted areas. If I were in your shoes, I would first wean away from customers and then builders in more difficult areas who were less agreeable or profitable.
I guess we are just different chipbored. I'd gladly take a nap in my truck to deliver a $75,000 job. Your business must be in great shape.
Solved the problem. We no longer install.