At CEDIA EXPO last fall, I had lively discussions with more than a hundred companies about how they create proposals. I found newer companies often created proposals by typing the information with MS Word or Excel. Many companies use QuickBooks for accounting, so they also use it to create estimates and invoices for their clients.
As companies grew, many told me that they were frustrated with these solutions and were searching for software that would help them move their business to a higher level, but not at the cost of overwhelming them with complexity. This experience gave me new insights into the all-important process of creating proposals. Hidden within the proposal process, I discovered powerful keys that allow us to manage the success or failure of our entire businesses.
First, you cant manage anything with a bid written on a word processor. Whatever software you choose should empower you by including this list of 10 hidden tools to unleash management power:
1) Determine which brands you sell. This is a critical management tool. You must carefully decide if you will sell Marantz Denon, Yamaha or Pioneer. When you become a dealer for one company, you are making a vital management choice for your future.
2) Now, establish a table in your proposal software that limits the products from these suppliers to exactly the items you choose to sell. Are you a Niles dealer? Do not enter all of their products. If you sold and stocked every Niles SKU, that would be bad management. Choose only your favorite models of volume controls, Intellicontrols and IR devices. Choose only the items that fit the profile of your company and the price points of your clients.
3) Determine the prices for every product that you sell. Look at your cost to buy it, including shipping. Establish your markups and control your profits. Different products often need different markups. Use the software to set your selling prices that are automatically pulled in every time you create a proposal.
4) Establish an installation price for every product in the table. Do you need two hours to prewire that pair of in-wall speakers?
5) Figure standard prices for cable, hardware and programming that are included every time you install that product. I planned an average of 100 feet of 16/4 cable to each volume control and 50 feet of 16/2 from there to the speakers. I included 50 feet of Cat-5 to each volume control to allow upgrading to keypads and priced in mounting brackets for in-walls.
6) Think about all the time you will spend designing this system, coordinating with the architect and builder, ordering and delivering products; doing all the rest of the office and legwork time required. That must be factored into the proposals bottom line. My company used a 10-15 percent amount.
7) After your standard prices for installation, cable, etc. are set in stone, only then can you take management to the next level. No job is standard. That is why proposals need the power to quickly adjust these particular charges based on any unusual requirements.
8) How much money did you make on your last job? Did your team finish the job in the hours you bid? Do you really know? You cannot manage anything without this feedback. A job profit report gives you this information. Then you know if your install team hit or missed the goal.
9) You can now look at your last job results and adjust every element of the process. How many hours did you really take to put in that Middle Atlantic rack system? Adjust your install prices for next time. Did your installers go nuts fighting control problems with that video projector? If you remove that item of your proposal software, then you wont sell it again.
10) When you preset these automatic prices in your proposal you have the power to manage every part of your installation and your profits. This gives you the confidence to go out and sell and grow your business.