Free Welding Shop Owner Videos

Thing’s we’ve learned growing our welding shop from $0 to $1M of annual revenue.

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  • Today we’ll cover how to set your selling prices and profit margins for whatever you sell in your welding shop.
  • Most of you will know this, but in case you don’t let’s define revenue and the two different types of profit.
    • Revenue: the total amount of money your business brings in, also known as your top line. If you add together the selling price of everything you sold last year, that number is your annual revenue. 
    • Gross Profit: Your selling price minus the cost to produce your products and services (COGS). This includes all materials and labor related to producing your product. This does not account for overhead, or your fixed costs such as rent or insurance. 
    • Net Profit: the money your business made after ALL expenses were paid. If you had $200k in revenue and $150k in expenses, your profit is $50k. If you are self employed, generally your salary is not an expense, that is part of profit. Net profit is the number that matters the most. 
  • Now, let’s talk about the importance of profit, and the unimportance of revenue. 
  • Most people brag about their revenue, or top line. This is kind of a false representation, because just because you bring in a lot of money each year doesn’t mean you made anything in profit.
  • Profit is what makes you (the owner) rich and gives you freedom, which is the ultimate purpose of business. Revenue doesn’t do either of those. If you have a business that brings in $3M and has a profit of $50k, you don’t own a business, you own a high stress hobby. 
  • We base the health of our business on PROFIT, and we consider two things:
    • The dollar amount of profit we are generating, this should grow over time. 
    • Our profit as a percentage of revenue. Currently we run between a 30% and 40% net profit margin. This number should stay as high as possible, we have a minimum threshold of 25% at our company. If we run at below 25% for any period of time, we raise prices or adjust our expenses down to make sure our net profit percent stays above 25%. 
  • So let’s get into how we set our selling prices and profit margin for what we sell and how it has worked well for us. 
  • We start with the end in mind, meaning we want the business to have a minimum net profit margin of 25%. For that to happen, our gross profit margin has to be about 10% higher than that or (35%) because overhead costs are going to eat up some of that margin before you get to your net profit margin for the year. 
  • Here’s an example. We sell flatbeds, currently we make a 45% gross profit margin on those flatbeds. That accounts for the cost of materials and labor to produce that flatbed. However, we still have to subtract the cost of our fixed costs such as rent and insurance. Once we pay for all of those things, at the end of the month we come to around a 35% net margin. Moral of the story, if you want your business to have a certain net profit percentage, such as 25%, your gross margin on your actual product or services has to be higher, because overhead will eat up some of your margin. 
  • So here’s the guideline I’ll give you from what we’ve learned. A 35% or 40% gross profit margin is generally a good place to start with the products you sell. If you can’t sell your product and make that margin, you should quit offering that product/service. 
  • The last piece of this is that in order for this to work you have to be correctly costing your products. If you have no idea how to do this, check out our business school for welders program below. It has a very simple to use system that works for ANY product or service sold from a welding shop that will give you an EXACT cost and selling price for anything you sell. Once you know your numbers, you know your business. So feel free to check that out, we’ve had lots of shop owners go through it, and it has a money back guarantee.
  • That covers todays topic, a couple quick takeaways:
    • Revenue is not important, profit is important. That’s what makes you as the owner rich and have freedom. Don’t get in the trap of chasing revenue and ignoring profit, you’ll be stressed with no money. 
    • When you set your selling prices, start with the end in mind and what amount of profit you want your business to make. If you want a 25% margin, then your gross margin at the product level has to be around 10% higher than that. If that pushes your selling prices to a point that you can’t sell the product, quit doing it, you didn’t start your business to be broke. 
    • None of this works unless you have an accurate knowledge of your numbers and costs of your products or services. Make sure you have a reliable way to cost everything you sell, and if this is totally foreign to you, check out our business school for welders program below.
  • Thanks for watching, have a great week. 

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  • Today’s is going to go over how we pay employees, it’s fairly unconventional, but has created a culture of exceptional quality and production output. 
  •  There are two parts to our pay structure:
    • Part one is the employee base rate: this is their hourly rate, and is based on experience and capabilities. The employee gets this rate regardless of what tasks they are doing.
    • The second part of every employees pay is production bonuses and sales commissions. This is the motivation factor, and what makes your employees think and act like owners rather thane employees. 
  • We sell flatbeds, that’s the main thing we manufacture. We simply just have a rate sheet that applies a bonus when someone completes a base model flatbed or any of the flatbed add-ons we offer. This bonus amount is the same whether it takes them 10 hours or 20 hours to complete, so the incentive is for the employee to buckle down, focus, and produce everything faster. (I’ll attach a link to the rate sheet at the bottom so you can look at it). This makes the employee think like an owner (efficient) rather than an employee trying to do the least amount possible to get by.
  • This is a little trickier when you do custom jobs that range in size and selling price. However, there is a very simple way to do custom jobs. When you bid the job, part of your bid should be the amount of man hours the job is estimated to take. Let’s say it’s a job that you bid to take 10 man hours to complete. Simply apply a $10 per hour production bonus ($100) that is paid out to the employee when the job is complete. So whether it takes the employee 8 or 20 hours to complete the project, their bonus amount is the same. Hint: they’ll want to do it faster.
  • This structure has been very effective for us, and allowed to to produce way more units per employee than most welding shops do. However, you do have to have strict quality guidelines, since you risk things getting sloppy due to employees being in a hurry. 
  • This is very simple to solve. Simply lay out your quality expectations very clearly, and if the employee doesn’t meet the quality standards, they don’t get paid their production bonus until it is re-done correctly. Most people don’t want to do things twice, so they’ll tighten up their work.  
  • Lastly, we give sales commissions on everything we sell. This does two things: 
    • Makes your employees passionate about your product and motivated to sell
    • It creates salesmen so you as the owner don’t have to always be the sales guy. Your employees often turn into great salespeople even if they don’t have much sales experience because their knowledge of the product is so good. 
  • So that wraps up today’s video. A couple takeaways or main points. 
    • Pay structure is a very effective way to make your employees think like owners. 
    • We ALWAYS structure our pay in two parts:
      • Base Pay: the hourly rate they make regardless of the task, this is based on experience and capability. 
      • Production bonuses and sales commissions as an add on to their base pay. This is 100% performance based, so you’ll get higher performing employees. 
      • For set products, just apply a set amount of bonus per unit of production. See our flatbed production bonus sheet below. 
      • For custom jobs, tie the bonus to the man hours you bid the job to take. Your employees will be motivated to get it done quicker, because it will boost their hourly pay at a higher rate. 
      • Lastly, NEVER cap your employees sales commission. If you are paying an employee $300k a year, it should be because they are bringing in $3M of business. Feed the rockstars, they only get better. 
  • Thanks for watching, feel free to check out our example rate sheet below. Have a great week. 
  • Today’s topic goes over some easy ways to create boundaries between your personal and work life. This is a really hard thing to do, especially if you’re self employed, but we’ll cover some very simple things I implemented that were extremely helpful to create boundaries.
    • Separate Work cell phone with separate phone number: this was huge. There’s nothing worse than a customer texting you with an issue on the weekend and then you being stressed out about it and it ruining your whole weekend. Get a company phone, run all your work related calls and contact through that number, and only have access to it during business hours – leave it at the shop at night and on the weekends. The customers who are upset that you aren’t available on Sunday are the customers you should fire anyway. 
    • No weekend or after hours favors, or jobs. Set strict boundaries for when you work, ideally during normal business hours only. Outside of this time, you should be completely unreachable.
      • Some of you are saying: I can’t afford to only work 5 days a week, I have to work 7 days to make a living! This is caused by other issues, likely not making a high enough profit margin or bidding your jobs incorrectly, which we’ll cover in a separate video.
    • Only have your work email on your computer, if you have it on your phone, you’ll check it outside of work hours, and you’ll be distracted and stressed during your personal time. 
  • A lot of you are thinking you will miss out on revenue and business by having strict boundaries and not responding on the weekends because it’s “bad customer service”. In my experience the opposite has been true. Having strict boundaries and business hours is what all the most professional businesses do. Most serious customers will respect that you have business hours and boundaries, and it gives the idea that you’re a professional establishment, rather than just an on-call handyman. The more boundaries that myself and the company as a whole has created, the more successful we have become in terms of profitability. 
  • The other thing that happens that is probably more important than sheer profitability is how boundaries improve your quality of life. You won’t have nearly as much weekend stress, and can actually be present with your family, friends, and hobbies you want to enjoy. 
  • That covers today’s video, here are the takeaways
    • Get a company phone, and run ALL business calls and points of contacts through that separate number. Have ZERO access to this phone outside of business hours. You can buy a used cell phone and a cheap monthly phone plan for very little, and it will increase your quality of life tremendously.
    • Don’t do favors or after hours jobs, certain customers will take advantage of this and you’ll always be doing things after hours if you make exceptions. The people who are upset about this are customers you should fire anyway.
    • Have your work email on your work computer only. If you have it on your phone, you’ll check in on the weekends, and then you’ll be distracted and stressed during your family and personal time. 
  • Thanks for watching, thanks for listening, I guarantee if you implement this, your quality of life will improve, and so will your profitability. 
  • Today’s topic goes over why offering less services (AKA doing less things) will make you far more money than trying to do everything. 
  • This is something we had to learn the hard way in our shop. We used to take every single custom welding job that came our way. Railing, signs, equipment repair, you name it. Consequently, we worked about 70 hours a week and were barely making enough to keep the doors open. 
  • In our experience there are two main reasons focusing on 1-2 things is better from a business perspective.
    • 1. You’ll never create a brand or be known for anything if you do everything, you are known as jack of all trades and a master of none. When you sell 1 or 2 things, you become known for that, because you’re the best at that ONE thing. If you just stumbled on our brand, you know it revolves around 1 thing – flatbeds. 
    • 2. You become better at your specialty. If you focus all your time and energy on building and selling one product or service, your product gets better, your systems get better, and you set yourself apart from the rest of the market. When that happens, you can charge a premium, and when you charge a premium, it means you take more money home. 
  • So here’s a quick, easy exercise I’d recommend doing to trim down the amount of product offerings you have. 
    • List out everything you sell/services
    • First, circle all the things you hate AND make very little money doing. Cross those off the list, and quit doing those things entirely. 
    • Now, circle the things that make you very little money. – Raise your prices to make a reasonable margin (at least 40%). If people aren’t willing to pay that, quit selling that product or service. 
    • You should be left with things you like AND what makes you good money. Focus on only those things and ideally cut down to 1-2 specialties. Your product quality and systems will improve over time because that’s ALL you are doing, meaning you can raise your prices over time. 
    • Now, focus on building a brand around the things that make you money and you like doing. All your marketing and branding should revolve around your specialty- it proves you specialize, and people are fine with paying a specialist a premium, but not a jack of all trades. 
    • Lastly, and this is the hardest part, you have to become disciplined to say no, and be okay with people being offended by your prices. Saying no is the most profitable word in business, and if you can’t get used to saying no you will never be able to create a specialized brand that people are willing to pay a premium for. 
  • That covers today’s video, let’s quickly cover the takeaways. 
    • Reducing the amount of services does two things:
      • Creates a brand for what you sell, rather than being a low paid jack of all trades.
      • It makes you better at your product/service because it’s ALL you do, so your product, systems, and processes get better over time, snowballing your profitability. 
    • Make a list of everything you offer currently, cross things off that make no money or that you hate doing. From here on out, try and get rid of those entirely to FOCUS on what turns a profit and brings you enjoyment.
  • When we implemented this, we started making way more money, but most importantly, it became an actual business rather than a job, because we turned everything into a process that could be scaled, and I now no longer have to do any of the production if I don’t want to. 
  • Thanks for watching, feel free to comment a topic you want covered. Have a great week. 
  • Today’s topic will cover how to create a good sales process, meaning after you generate the lead, what do you do to close the highest percentage of those leads possible?
  • Let’s start with some high level ideas that we’ve learned growing our company and then we’ll break them down individually
    • A complicated sales process with a lot of steps is bad. You want as short and as simple of a process from the time the lead comes until until you’ve closed the sale. 
    • If you don’t take credit card, I’d recommend you start taking it today. It’s convenient, everyone has one with them at all times, and the fee you pay will be made up in the increased amount of business you will generate. 
    • 90% of the money is made on follow ups, and most people don’t follow up. This is the highest level activity you can do in sales. 
  • Let’s start with simplifying the sales process.
    • Have a simple, straightforward pricing structure for whatever you sell. Buyers don’t like ambiguity or mystery around price, figure out a way that you can ask a small amount or no questions and get them to a price as fast as possible. Clarity on this aspect also increases the buyers perception of your business professionalism. 
    • If you can make some sort of 1 sheet for what you sell, meaning an easy to understand pdf sheet that covers your services and how they are priced, this is great to send to buyers after the initial call. 
    • Give every customer a clear roadmap of what needs to happen to move forward and do business with you, then move as far as you can down that roadmap, ideally all the way to the sale. 
      • Example: we sell flatbeds, our road map is very simple and this is what we say. So NAME your current price for the flatbed installed based off the pricesheet is x, if you’d like to move forward with this order we require 50% up front to place the order, and the remaining 50% is due after it’s installed. If you ordered today, we could have it done by the middle of x month. Would you like to go ahead and put your order in? 
    • Have the ability to quickly create an itemized and immediately payable via credit card invoice. 
    • If the customer is ready to buy, be able to take payment over the phone via credit card. That deletes a step of them having to take care of payment and avoids someone changing their mind later (which happens often). 
  • Take Credit Card (Here’s why)
    • I know there’s going to be pushback to this one “WHAT ABOUT THE 3% FEE!?”. I used to be in this boat, but we realized the amount of people that the combo of people who justify purchases via credit card to get miles and points in addition to the convenience of a credit card way more than make up for the 3% fee. 
    • Everyone has a credit card on them at all times, meaning if you talk to a lead and they are ready to buy, it doesn’t matter if they are driving, at Chick Filet, or anywhere else – they can pay you RIGHT NOW. No lag time to change their mind or get cold feet.
    • It’s more guaranteed than a check. People can write you a hot check and run for the hills, credit card payments are virtually guaranteed. 
    • Instant payment, no waiting around for a check or extra steps for the customer to get you payment. 
    • If you’re worried about the fee, simply raise your prices by 3%. Nobody will notice, and you will increase your sales volume even if you change nothing else. 
    • A good company to use for credit card processing is stripe. You can make and send invoices that can be paid quickly and easily, it will also automatically send receipts to your customers. 
  • Following Up
    • 90% of the money is made on the follow up, ESPECIALLY if what you sell has a high ticket value.
    • Think about the last time you purchased something over $200 that you impulse bought on a whim. That RARELY happens. Now think about something you impulse bought that was over $1,000. That NEVER happens.
    • For this reason, it’s completely unreasonable for you to expect new customers to buy from you after 1 contact point. They want to research other options, talk with their spouse, and think about it, which is completely reasonable. 
    • What that means is that you have to follow up with your leads in a timely, organized way.
    • How to do this – keep a call log of leads you’ve talked with and what they were interested in. The hotter the lead, the sooner you want to follow up with them. If someone is very close to a purchase decision, you want to be the one that’s been the most active and attentive around that time. 
    • Some of you will think this is pushy and annoying. It’s only annoying if someone isn’t that interested. If people are interested in what you sell, they are generally glad you called and impressed with your attentiveness.
    • How to create a follow up from the first call: If on the first call if the customer doesn’t close (and they usually won’t) ask them – so can I give you a couple days to think it over and then give you a call back on X day? Put the call back day on your lead call log. 
  • So that wraps things up for today, let’s quickly cover the takeaways:
    • A simple and fast sales process is the best, so think about your current sales process and get rid of as many steps as possible that aren’t necessary and create friction for the customer. If all the customer has to do is read you their card number instead of a bullet point list of tasks, you’ll close more deals. 
    • If you don’t take credit card, do so now. The 3% fee you pay will be made up with higher sales volume because of the sheer convenience for your customer. 
    • Following up is the most important part of the sales process, and where 90% of the money is made, simply keep a lof of your leads, and follow up with them. You’ll be at the top of their mind when they are about to make the purchase decision. 
  • Today’s topic is going to cover (1) why marketing is important and (2) some good forms of marketing you can implement today in your shop to start building a predictable machine that brings you unlimited leads and customers. 
  • Let’s start with why marketing is important and crucial if you want to grow at a fast rate. It comes down to one irrefutable rule: nobody has EVER bought anything they didn’t know existed. For that reason, marketing is important because it makes your products or services known to the world. 
  • Now I know there’s some of you out there right now saying “I don’t need marketing, all my business is word of mouth.” Word of mouth is great, the problem is that it caps your growth to the rate at which your existing customers tell other people. Marketing is an amplifier of telling other people, because you can tell hundreds, thousands, or even millions of people at a time about your product that otherwise would never hear about it. 
  • And then the real magic happens. Once you create your own customers through marketing instead of just waiting for them to hear about you, they become word of mouth customers, which creates a compounding machine that stacks and multiplies your demand. 
  • Word of mouth is the best form of marketing, but proactive marketing is an amplifier of word of mouth, so done right, it amplifies your growth rate by a massive amount on top of conventional word of mouth marketing. 
  • So, let’s talk about some good forms of marketing. I’m going to break this down into two categories, because all of you guys will fit into these two categories. 
  • Category 1 is going to be if you don’t have a website, which is likely most of you. Now I would recommend you do create a website soon, but if you don’t have one right now, we’ll cover some marketing that has worked well for us without the need for a website. 
  • Category 2 will be for those of you that do have a website – we’ll cover some marketing tactics if you do have a website. 
  • Before we get into each of the two categories, let’s cover some forms of marketing that are generally terrible, so you can avoid those before you even start. 
  •  
  • Generally speaking, the more targeted the marketing channel, the better, because you get a very potent base to advertise to where a large percentage of the audience would actually buy your product. Here’s some examples of bad forms of marketing: 
    • Radio: If you own a welding shop, especially one that specializes in something specific, radio is basically going be lighting your money on fire. The reason: it’s too broad, you likely cater to less than 1 percent of the population, so your paying to advertise to 99 people that will never in a million year buy your product. You want forms of marketing where a high percentage of the people consuming your ad are actually your likely and qualified buyers. 
    • General Newspaper/print ads that aren’t targeted to a specific demographic. Again, this form is too broad, most everyone that reads a general newspaper is not going to be your customer, so stay away from general newspapers unless they target a very specific demographic that is your ideal and likely buyer. 
  • Let’s get into some good forms of marketing if you DON’T have a website:
    • Google My Business – business listing on google. If you google any business right now, it will come up with several business profiles with star ratings and info about them. 
      • Just google “how to create a google my business account” – you don’t need a website, it’s free, and it will create customers if you consistently do the following – (1) get google reviews from all your customers, that’s very important for search ranking as well as selling new customers. (2) Continually update your listing with new photos. Google will rank you higher if it’s clear you are a thriving business that consistently uploads content. 
    • Facebook Marketplace Ad for what you sell – again this is free, so there’s no reason not to do it. Simply put some high quality photos and descriptions for what you sell, and update it/renew it every 2 weeks. Shuffle the photos so that people on marketplace don’t get banner blindness from seeing the same thing over and over. 
    • Direct Mail that is targeted to your ideal and likely buyer demographic. If for example 95% of your customer base are farmers because you specialize in equipment repair, then it would likely be successful to send direct mail to farmers in your area, especially if you send it right before the high season. 
      • Great way to find a list of addresses: most states have a business directory on the secretary of state website you can do a search in. You can usually search the terms “farms” and it will bring up a list of all businesses registered with “Farms” in the business name with their mailing address. Simply aggregate a list of these in your area (shoot for a list of 500-1000.) 
      • Note: Make your message simple and have ONE call to action. Don’t list a million things in a paragraph. Clearly state the ONE thing you are trying to sell, and ONE action item for them to take. Ex: Call for a quote, First hour free for new customers, etc. Try and include a photo that is highly relevant to your customer base that instantly grabs their attention. Farm Repair – before and after of a gnarly farm repair you’ve done in the past. 
    • Manually post flyers/postcards at places where your customers aggregate.
      • Really think of who you’re customers are and where they hang out, usually alike people hang out together. So if your customer base is farmers or ranchers, hang flyers at the livestock saleyard (high density of potential customers), if you mostly do handrails and your main customers are contractors that build new construction, hang flyers at the building supply stores. 
    • Pound the pavement, visit potential customers place of business. 
      • Most people aren’t willing to do this, but if winning was easy everyone would be a winner. This form is the scariest, but also can be the most successful if done right. 
      • This form is worthwhile if your customers have a relatively large lifetime value. So think of customers that will buy from you over and over again once a relationship is established. If this is the case, it means you can put in more effort and money into acquiring a new customer because you know the payback will be so large. My tip for this is have a no-brainer offer to present to everyone to establish a relationship. 
        • If you build handrail for contractors, visit all the contractors Headquarters in your area. Offer to do a small handrail job for cost or free to earn their trust. If you do a great job and deliver it on time, why wouldn’t they come back to you in the future? Be okay with losing money on a small up front deal if you’re confident in your ability to deliver excellence, the future jobs will make you a massive multiple of the upfront cost. 
        • If you do mobile repair, give new customers your first hour of labor or your first service call for free above the cost of materials. If you do great work, you’ll become their go-to guy.
      • Quick story on this tactic, because I know a lot of you think I’m nuts suggesting you just walk in to random places and ask for business. When I first started the business, I was completely broke, so I was willing to do anything to get business. One of the first things I tried was selling tee markers to golf courses, little laser cut steel logo tee markers. I walked in cold to about 20 golf courses. 19 of them told me no. The last one didn’t buy tee markers, but they did buy 3 CNC plates to label their trash cans. I made $60. What a waste. But then something funny happened. About 3 months later that golf course emailed me and said they wanted to buy new tee markers from me. $15,000 job. Then a few months later they wanted 12 custom easels built. Another $10k. At the time of this video that golf course is still a customer and has done north of $100k of business with us. The moral of the story, you’re going to get rejected most of the time, but if you can get 1 or 2 or 3 yesses, it might make you a 100 or 1000x return on your money for repeat type customers. 
    • So, pound the pavement, and every time you get rejected, and you will, just think to yourself: “If winning was easy, everybody would do it.” 
  • Let’s move on to segment 2 – Good forms of marketing if you DO have a website. 
    • Google Search Campaigns – the best form we’ve found to date if you sell something fairly specific or specialized. If you do general welding of all sorts, this can still work, it just may not be as potent. 
      • How Google Search Campaigns work – you load a list of keywords into the campaign that your people would search for when they looking to buy what you sell. Examples of keywords would be custom handrail, custom steel firepit, mobile welding, custom entryway, etc. When someone in your area puts this into a google search, you would show up at the top of the search results, they would click your webpage link, and hopefully turn into a lead. 
      • Why this is so successful done correctly: your ad only shows up to people actively looking for what you sell. This means most of the people searching are looking to (A) buy what you sell, and (B) buy it in the near future. This sets it apart from most other forms because the buyers are seeking your product out, rather than you trying to convince someone to buy your product or service they may not want at the current time. 
      • Tips: 
        • the more specific the keywords of what you sell the better. Put exactly what you sell as a keyword, such as handrail for decks, custom spiral staircases, or mobile farm repair. 
        • Do not send people directly to your homepage, unless your homepage is specifically tailored to the one thing your ad is selling. 
        • Make your landing page (web page people land on when they click the ad) extremely simple with ONE action step that people can take. This can be as simple as call us for a quote, fill out the form for a quote, or call to book a free estimate. Make sure this page has natural continuity from the ad itself. If the ad is for handrail, don’t send someone to a page with firepits on it. Here’s an example: visit ddfab.co/hq – that is our flatbed google ad landing page. 
    • Facebook Ads
      • In our experience facebook ads work great for remarketing, meaning showing someone an ad that has already been interested in your business by visiting your website. In general, it seems like google is the best place to generate new interest or leads, and facebook and email are a great way to re-market to those leads. 
      • Important, if you’re not tech savvy, you need to have a professional install the facebook pixel on your website. The pixel is the facebook device that tracks visitors on your website, so if someone sees your ad on google, click on it, and visits your website, that will fire the facebook pixel, and next time that person gets on facebook or instagram, it will show them your remarketing ad because it knows they have just visited your website.
      • This is very effective, but a total waste if you don’t set it up properly, so make sure if you’re going to do facebook ads, either yourself or a professional needs to set up the facebook pixel on your website. 
    • Email Marketing
      • This is a great way to re-market to leads that have come in in the past. A great way to build an email list is to exchange something of value for the customer’s email address. For us, we trade someone’s email for our flatbed price sheet, you can look at that landing page at ddfab.co/hq. We now have thousands of emails from all the leads that have come in on the site. So if we ever run a sale or promotion, we announce it on our website for new leads to see, but we can also send out an email to all of our past leads. If you stick with this for years, you can build a list of thousands of emails of people interested in what you sell. 
  • So that wraps up the forms of marketing we’ve found effective. Let’s cover our takeaways from today’s video
    • Marketing is important because nobody has ever bought anything they didn’t know existed and it amplifies your word of mouth, which grows your business faster
    • We covered forms of marketing that has worked well for us in the past, I’d encourage you to try those, track your return, and search until you find winners. We covered how to track marketing spend in last week’s video: reactive vs proactive business. 
  • Thanks for watching, if you haven’t please subscribe to our channel, we’re going to come out with one new video a week with welding shop owner business content.
  • Today’s topic is owning a reactive vs. a proactive business. We’ll go over what that even means, and why, in my opinion, one is far better than the other. 
  • So a reactive business is one that basically just waits for business to come to it. Most of the time a business has a loyal customer base that brings them business consistently. Basically a job comes in, and your business would complete it. Sometimes your busy, sometimes your not, because it’s subject to the demand that comes to you. 
  • A proactive business means the opposite. That means you don’t wait around for demand for your services to come to you, you create your own demand. Ideally, you have a machine that can create as much demand as you want, meaning if you want more work, you adjust your systems (the machine) to create more demand. 
  • The reason we have primarily a proactive business model is because we like to determine how busy we are, because once you build a machine that creates virtually unlimited demand, you’ll never be worried about money again (assuming what you sell is profitable, which will be a separate video)
  • So the concept is pretty simple, but how do you actually create a proactive business. The answer is simple, a solid marketing and sales system, or simply put, a way to bring you a pipeline of people who are interested in what you sell (leads), and secondly, a way to turn those leads into paying customers. 
  • The beauty with this is once you have a marketing and sales system that works, you can create virtually unlimited demand for your products or services. 
  • Let’s go over marketing: the tricky part of marketing is that most forms of marketing are a total waste of time and money. How do we solve that? By tracking where every dollar that comes in comes from. 
  • So here’s the most important takeaway from this video: you need to spend money on marketing if you want a proactive business, but most importantly, you need to track how much PROFIT comes from each marketing channel.
  • Let’s say you have 3 forms of marketing: print ads in a local newspaper, google search campaign, and a radio ad running at the same time. Every time you close a sale, ask every single customer how they heard about you and put it in a written sales log. This log should include (1) how much profit you made off the sale and (2) what channel they heard about you from. 
  • At the end of the month, you’ll have a list of customers with how much profit they made and where they came from. Total the profit made for each channel of marketing. Now (and this is important), compare the profit number to how much money you spent on each channel of marketing. Whichever channel of marketing has the largest ratio of profit made to dollars spent is the winner, do more of that. If any channels are negative (and when you start out most will be, get rid of those and try something new)
  • In my opinion it’s good to have at least 2-3 good forms of marketing that bring you business every month because it diversifies your lead pipeline. So if you have 3 marketing channels you spend money on every month, double down on the best two (assuming they are profitable) and get rid of the worst performing channel. Use that money on a new channel to try and beat your two top performers. Over time, your marketing will get more and more efficient, which will build your machine that creates unlimited demand. 
  • In a later video we’ll cover what specific forms of marketing have worked well for us and how we created an effective sales process. 
  • So takeaways from today:
    • Proactive business is far better than a reactive business because you create your own demand – once you have an effective marketing machine, your demand is virtually unlimited
    • Pick 2-3 forms of marketing to try, every month total the profit made from each channel vs money spent. Keep the top 2 performers, get rid of the worst performer, allocate that to a new channel to try and beat your best two. Over time, your marketing machine will become more efficient. Ramp up your spending on the good forms of marketing – create more leads – generate more sales. 
    • Eventually, you’ll have an extremely profitable, unlimited lead generation machine. 

Other Business Tools

Like our free stuff?  Check out our more potent programs below.

Flatbed Dealer Program

A Turnkey business system to build and install flatbeds from your existing welding shop. 

Business School For Welders

Increase the profitability, scale, and efficiency of your welding business.