Lightning Strikes In mid-2000, Sylvain Contracting was subbing for Dan Poirer, a local contractor enrolled in CCN. Poirer suggested that Sylvain look into the network. But Sylvain thought the price tag — $3,500 to join, $350 per month in dues — a luxury he couldn’t afford. Still, he found the cash to travel to CCN’s Toronto conference that June, where he attended a seminar on overhead management that he says struck him like a lightning bolt.
He realized that his company’s overhead was higher than he imagined — 27% — and that he was losing, on average, 14% on every job because his markup was too low. “I didn’t know the difference between gross and net profit. We had built up our sales without the right price.”
Sylvain returned from the conference and raised prices 17%. “That killed our two salesmen,” he says. In fact, they’d gotten used to closing deals by low-balling the prospect. The salesmen went zero for 67 on leads they were given under the new price structure and blamed market conditions. But Sylvain knew, from talking with other local contractors through CCN, that his salesmen were the problem. He called Kaller, asking whether he should borrow money from his mother to make payroll. Kaller urged him not to. “I suggested that losing those salespeople wouldn’t necessarily be a bad thing,” Kaller says.
Plan of Attack With CCN’s sales training program, which it refers to as boot camp, under his belt, Sylvain dumped his salesmen and took to the field. His first sale was a $13,000 job that he closed on even after the customer pulled out two competing estimates for $7,800 each. “I was fresh out of boot “ camp, so I was as cool as I could be.” Within 30 days, Sylvain sold $109,000 worth of projects, compared with the $7,600 that the two salesmen combined had sold the previous month.
“CCN showed Marc how to sell the company, not just the product,” says George Williams, who bought in as co-owner of Sylvain Contracting in 2002, and brought with him a wealth of sales experience. Williams had been a route driver and sales trainer for Coca Cola for 13 years but was injured on the job. He got into home improvement in 1998, first as a salesperson for Sears (through Bil-Ray), and then with The Home Depot (through RMA Home Services). He returned to Bil-Ray as a $160,000-per-year general manager but found the work too physically taxing and left.
While driving down the road one day, he spotted a Sylvain Contracting yard sign, pulled over, and took down the number. He contacted Sylvain and the two men eventually agreed to join forces, with Williams paying off the company’s $75,000 debt and pending sales commissions. He now heads a three-person sales team that covers a market extending 90 miles into New Hampshire, Massachusetts, and Maine. The team struggled a bit last year when its sunroom salesperson left to join another company. But Williams says he expects to hire a fourth salesperson by March.
Next Level No one has been more surprised than Sylvain by his company’s turnaround. Getting to the next level, however, will be a challenge, as Sylvain Contracting hasn’t reached the point where profit is keeping up with sales growth. Lead costs are now $310 vs. $250 a few years ago, and the company’s close rate is still only 19% for every lead issued and 28% for sits.
“If you asked me two years ago where I’d like the company to be, I would have said that being between $1.5 million and $3 million would be perfect,” he says. “But now that we’ve passed $3 million, the next goal is to get our policies, procedures, and systems in place. We need to increase our profit before we increase our sales.” To that end, Sylvain has put together a policies and procedures manual. His motto is “inspect what you expect,” and he is tracking the performance of every component of his business.
This year, Marc Sylvain has allocated 11% of revenue to spend on marketing. The company’s most reliable lead source continues to be the 300,000 direct mail pieces it sends out monthly through Valpak. Another 20 leads per month come through ServiceMagic at a cost of $1,900 per year. (Hanley Wood, REPLACEMENT CONTRACTOR’s parent company, has an investment interest in ServiceMagic.)
Sylvain Contracting exhibits at 13 home shows and works with sunroom supplier TEMO to display products in four local Sam’s Clubs. The company recently ditched its cable TV ads and will experiment with radio this spring, when it plans to run 90 commercials in April alone. Sylvain will make these lead sources pay by evaluating them within a “matrix” system he learned through one of Gindele’s CCN seminars. The matrix was recently enhanced when Sylvain Contracting started paying $950 per month to whoscalling.com, a tracking service that monitors the quantity and quality of leads that come in through 15 different toll-free numbers (including the phone number on the side of Sylvain Contracting’s trucks).
Gindele also introduced Sylvain to financial planning disciplines that allow him to see where his company is at any given moment and to project future sales and profit with some measure of accuracy. “Our plan is so precise that we know exactly when we’ll buy a new truck,” he says. Every day, Sylvain posts his company’s sales and production activity and goals on bulletin boards in his office. And each month, Sylvain shares the details and progress of his financial plan with his employees, taking his cue from Kaller, who encourages CCN members to “get everyone in the company thinking about profit.”
Business Savvy When Sylvain joined CCN, he said his primary objective was to improve his own financial lot. He admitted that it irked him that his salesmen made more money than he did. But now that Sylvain Contracting is working up a full head of steam, Sylvain says he’s far more concerned about doing right by his employees, whom he refers to as “my real customers; these are the people I need to satisfy.” He’s initiated an incentive program that pays his salespeople bonuses tied to their monthly quotas. He’s also investigating other profit-sharing avenues for non-sales associates.
Sylvain’s desire to motivate his employees and to get them more involved in the company’s operations isn’t entirely altruistic, though. Last January, he and Denise purchased a home in Florida, where they will spend one month this year and where they plan to spend three months annually within five years. Sylvain also wants time to volunteer his services to CCN as an instructor. “I think he could teach financial planning,” Kaller says. “He’s not just a contractor anymore; Marc’s become a businessman.” —John Caulfield is a freelance writer and editor based in New Jersey. He has been reporting on the home improvement industry for more than two decades.