In the Ask an Expert series, HeatSpring instructors and industry thought leaders answer a question on the minds of the HeatSpring community. We are joined by Keith Cronin, instructor of the Solar Business Masterclass. Keith answers the question – what are 3 things a solar business could improve upon to see higher revenue? To check out Keith’s response, you can either watch the video or read the transcript below.
Brit: We’re here with Keith Cronin, who is going to answer a question for us in this Ask an Expert session. Keith is the instructor for the Solar Business Masterclass. And today we ask Keith – what are three things a solar business could improve upon to see higher revenue?
Keith: Hey, Brit. Thanks for that question. I think everybody is seeking to grow their businesses.
You know, if we stay kind of stagnant, we’re not seeing any growth. But I think I’ll answer with a little bit of a different spin in that I think companies should maybe focus not on higher revenues, but more on net profits, especially small companies. And I think quite often, you know, we look over the fence, we look at our competitors – let’s just say – or we look at publicly traded companies and quite often they have very high revenues… but don’t make any money.
And so I think one of the things that we need to mature in the solar industry is to actually make money. And a lot of times the smaller companies – let’s say you have 10, 15, 20, 30 people – it can be difficult because you’re competing in a marketplace that might not always have clarity about what profitability is. And in a heavy, competitive bidding environment, which tends to happen, right, when markets get super hot. Everybody descends like locusts into a market. They set up shop. They hang their shingle and they start marketing. Whether it’s door to door, on the radio, TV, whatever the methodology they use to get the word is that I think a lot of small companies that I work with really struggle. They say, “I want to be just like those people.”
And I try to say, look, it’s great what they’re doing. Maybe indirectly, they’re helping you and your business. They may say, “well, what do you mean?” And I say, “well, look, they’re going to do a lot of marketing for you. They’re going to raise awareness in the marketplace, which is fantastic.” But if you think about the solar business in general, it’s a very regional business, a very local business, and there are many big national companies that are trying to be very regional. Some are doing a great job. But I think for the small companies that are hearing this today, I would just try to focus on being profitable first, like doing the job really well – wash, rinse, and repeat.
So one of the ways that I think that people can grow their revenue and their profitability at the same time – is you have to systematize your business. If everything is in your head and you are the CEO and the janitor, that’s great. We need to get out of whatever lives in your head.
And today with technology, with your smartphone, you can create audio, you can create processes and procedures within the organization so everyone isn’t constantly interrupting you and your business, when you’re doing your business to try to grow your business. Because let’s say you’re the one man in one truck and you have your helper or you have two trucks. You’re probably in it every day. You’re building systems. You’re answering these questions. You can’t answer your phone because you’re on the roof where you got a screwdriver in your hand. You need to make time at nights or on the weekends or somebody to help you orchestrate creating these frameworks and these systems. To me, that’s the way that you can grow your revenue.
You have a consistent message, which is part two. For what it’s worth, a good looking website needs to tell your personal brand, your personal story, your genesis story, how you started out, why you’re doing this, why it’s important.
A lot of my clients don’t think it’s important. They don’t want to put their face on there. They feel like they have imposter syndrome. They don’t want to say, “I only have two people.” That’s okay.
People want to work with people, like get in touch with. Because I think today, sometimes the bigger companies are so busy and nobody gets back to you. People feel that they’re ghosted.
I wouldn’t worry about the size of your organization. I would worry about building your brand. And to me, it’s again, having the website. If you just start out, you’re only six months in the business, don’t worry about that. Step number two, to grow your revenue, I would highly recommend what I’m doing right now with Brit, is to make some video testimonials.
I would highly recommend getting some people out there. And again, we go over this in the Solar Business Masterclass course. This is what I did to get testimonials. People saying that you did a great job and you’re great. It’s not about you saying you’re great. Let other people tell you that you’re great. And why you’re great, and whether you came there on time, you’re professional, you cleaned up after yourself. You might’ve been more expensive than the other company, but you’re responsive. Or you did a system for them two years ago and you had a problem. You came out and resolved it. These are the things that people are looking for when they’re trying to choose somebody to do their next project.
If we look at Amazon, this is a third thing. Why is Amazon so popular? Why is it an amazing marketplace? Because it’s very virtuous, right? They want to make sure that people again provide these testimonials and feedback. And invariably, if somebody is dissatisfied, what happens? Right? You can return a product.
Not that someone’s going to take the solar off their roof and say, take this back. But the foundational principle is really important, where again, people are being very transparent. If people have problems, they’re giving feedback and they’re saying, hey, this didn’t work – and we’re going to go fix it.
I can go on about this. I go into this in detail in the class, but again, revenue is a really important thing. I have this little marginator tool that I used in my business where basically, we looked at the gross profit, right? I think to me, the gross profit and gross profit per man hour or per woman hour, if you’re on the site, is really important to look at.
The other thing is that if you want to grow your revenue and grow your team, you need to be able to give your team the information to be successful. And that’s kind of educating them on the business. And again, if you’re worried that they’re going to leave and go start their own company – at least if they do – they’re going to do it the right way, they’re not going to undercut you.
I think it’s really important to talk to your company in these “math things.” And most people would say, “well Keith, my employees just want to go install panels.” Well, if you make them part of the solution and in so far as give them a little education. You can also do something else, which is incentivizing them. You say, “look, this is how much money we have. This is how many hours we have in doing this project. If you hit these metrics [that you mutually agree upon]…” Guess what happens? They know what’s in it for them.
Finally about this idea – maybe this is the fourth item – is that if you start sharing this information with your sales team and your operations team and your admin team and you as the leader, you’re going to be able to essentially predict in advance if a job is going to be profitable or not.
What I mean by that is if you’re tracking profitability and your tracking gross margin, you can decide ahead of time as a team…”hey, things are slow. We’re going to take this project and you take a little bit of a haircut on this because of whatever the market conditions are. But again, now you’re running your business where it’s not emotional. It’s logical. And it’s rational.
And you know what you’re going to do ahead in the marketplace. To me, you’re going to have these predictive analytics. It’s an Excel spreadsheet. It’s not sophisticated software. I go over this in the class. These are the kinds of guideposts you can have for your business.
Everyone in the company is speaking a common language. And to me, this is one of the most simple things to do. It’s the basic blocking and tackling. It’s not very exciting. But if people have this common language within your company, then miracles can happen.
I’m living proof, right? That here’s somebody who’s able to grow and scale a business and sell to Sun Edison because why? We had these things in place and it’s not very hard. It does take some time. You have to make it a priority. You have to be a little bit disciplined. And you have to find the right people that are going to believe in this message. But I can tell you if it worked for me, it can work for you.
Brit: Great. Thank you for that amazing advice, Keith, we’ll see you in class.