June ♦ 2017
In This Issue...
How Long Has it Been Since You Have Updated your Flat Rate System? [Tom Grandy]
Dave Ramsey's EntreLeadership: Reports That Can Save Your Company [Dave Ramsey]
Say Thank You...It Makes A Difference! [Tom Grandy]
Planning For Profit: Workshops locations available [Grandy & Associates]
No Business Advantage Webinar until September:
Profit University Audio Series: Eight Reasons Your Business Isn't Working [Debbie Sardone]
Grandy & Associates Launches Online Training Program; Offers On-Demand Classes On Your Schedule [Grandy & Associates]
"Why Do We Need to Charge So Much?" DVD has been reproduced in three different formats [Grandy & Associates]
How Long Has It Been Since You Have Updated Your Flat Rate System?
by Tom Grandy
Flat rate or up front pricing arrived on the scene in the 1990's. It was a true change for company owners. It provided the "needed" vehicle to allow Service Departments to charge what they really needed to charge to cover costs while generating a reasonable profit. Prior to flat rate pricing, raising hourly rates was a real hassle especially knowing even a minor increase in hourly rates was going to cause a major stir within the customer base.
Once a company switched to flat rate (where the customer never sees the hourly rate) price increases were a snap. If the company needed to increase its hourly rate by five, ten or more dollars, it was easy. Simply reprint the books or update the tablet and out the technician went. There was no announcement to the customer base and best of all…no customer backlash. Few, if any, customers even knew the rate change had taken place!
Now let’s address the phase two generational problem. I have talked to nearly all of the flat rate companies and they all seem to have the same problem. What's the problem? Once on flat rate pricing many company owners were slow, if not totally reluctant, to increase their internal hourly rates.
We have all heard the joke about the fellow that sold his mule to another farmer claiming the mule was a fantastic worker. However after several days the new owner called the old owner complaining that he couldn't even get the mule to pull the plow much less work at a high rate of efficiency. The original owner drove over to the new owner’s farm. He got out of his truck, took a 2x4, and with all his might hit the mule up side of the head with it. The new owner came unglued. "Why did you hit the mule?" The original owner simply said "This is a great mule but I forgot to tell you before he will work you need to get his attention!"
Ready or not I am about to get your attention!
When presenting our full day Service Manager's University seminar/workshop the class is led in a short exercise. As a class we record on a flip chart all the cost of doing business that have gone up for one service technician over the past year. Below are a few items the class listed:
Technicians get a $.50 or $1.00/hour raise
- Insurance goes up (Workers’ Comp, vehicle insurance, health insurance, etc.)
- Vehicle maintenance increases and cost of gas
- The cost of parts from the distributor/manufacturer went up
- Overhead within the Service Department increased (staff raises, benefit packages, etc.)
- General overhead for the entire company increased, a portion of which will be allocated to the Service Department
The total increase for one technician is usually $10,000 to $15,000 range for the year. Can your Service Department afford to absorb those kinds of cost increases year after year.....and still be profitable? The answer is a resounding NO!
Even if the increase was only $10,000 for the year that means the hourly rate would need to go up $10.00/hour ($10,000/1,000 billed hours per year for a service technician) just to maintain profitability!
As the seminar comes to a close the class is asked to share one or two things they plan on doing when they return to the office. Routinely nearly half the class says they plan on updating the internal hourly rate within their flat rate system.
My suggestion is to update your flat rate pricing system at least annually, if not twice a year. Keep in mind the fear factor of increasing your hourly rate is on the part of the company not on the part of customer. As a matter of fact I would strongly suggest you add an extra dollar or two to your "needed" increase just to improve the overall profitability of the Service Department. Remember, when you are on flat rate pricing the customer never even knows the hourly rate has changed. Simply update your system on Friday and head out Monday morning with new pricing...and increase profitability.
Hopefully it didn't take a 2x4 to get your attention. Now for the really hard part - calculate the needed hourly rate change and institute it into your flat rate system ASAP.
Its summer but you still need training. Online training allows you spend 10 minutes or two hours of learning whenever your schedule permits. Check out this month’s Website Special. Each module is only $34.95 as opposed to $39.95. If your state permits online credit for CEUs there is a quiz at the end you can turn in. Check out the offerings today.
It's summer but you still need training...Self-Paced Online training allows you to spend 10 minutes or two hours of learning whenever your schedule permits. Check out this month’s Website Special of Self-Paced Online Training modules. Each module is only $27.95 as opposed to $39.95. If your state permits online credit for CEU's there is a quiz at the end you can turn in. Check out the offerings today.
Like all our products if you are not 100% happy simply return it for a full refund no questions asked.
[Back to Top]
Special to Grandy & Associates' eNewsletter:
Dave Ramsey's Entreleadership
Reports That Can Save Your Company
By Dave Ramsey
Cash flow issues are one of the big reasons small businesses fail. And these types of problems are directly related to an owner not staying on top of the numbers and having poor accounting practices.
The good news is you don’t need a crystal ball to forecast what lies ahead for your company. By learning how to read a few financial reports, you’ll know where your company is headed.
Don’t worry — you don’t have to be a rocket scientist to understand them. Once you learn the basics, you’ll only need a few hours a month to get a handle on things. With that in mind, here are six financial reports you need to check every single month:
P&L (profit and loss statement)
Also called an income statement, the P&L shows revenue minus expenses and either your net profit or loss. I still read my company’s income statement every month because it gives me a quick snapshot of how each area of the business is performing.
This simple document shows what your business is really worth. It lists all your assets and liabilities. In this statement you’ll see what you own, who you owe, and revenue owed to you.
This report shows who owes you money, how much they owe, and the age of their debt. You know how I feel about debt, so I advise not extending credit to anyone. If you feel you absolutely have to, keep it short-term — no more than 30 days.
This is a quick summary of who you owe money to and the amount you have to pay. If you owe something, pay it! It’s never a good idea to hold your money until the last second. My company clears bills every Tuesday, and that allows us to negotiate further discounts and build incredible goodwill with suppliers and vendors.
This is still the best way to verify that your bank account balance is correct and that there are no errors. If you’ve ever kept a checkbook register for your personal account, this one will be a breeze. It’s just a turbo-charged version of the one at home that shows the checks you’ve written, deposits and your balance.
Simply put, this is a record of all your open purchase orders, including quantity. The PO is a simple way to quickly review what has been purchased and the cost of each item.
Set aside a few hours each month to read and address these financial reports. It’ll be one of the best investments you’ll ever make!
*Small-business expert Dave Ramsey is CEO of Ramsey Solutions. He has authored numberous of best-selling books, including EntreLeadership. The Dave Ramsey Show is heard by 12 million listeners each week on more than 575 radio stations and digital outlets. Follow Dave on the web at: www.entreleadership.com.
[Back to Top]
Say Thank You...It Makes a Difference!
By Tom Grandy
While I was growing up my parents taught me to say thank you. It didn't matter if it was a gift, a kind gesture, or simply a waitress handing you your order. Saying thank you was not only expected in those days…it was appreciated.
Many things have changed over the years. Being respectful of older people has pretty much gone by the wayside and the simple gesture of saying thank you is seldom heard. That's the bad news. The good news is that saying thank you to people is so rare that when it is said it's actually appreciated and sets you apart from others.
Now some of you are thinking, “I could never train my technicians to say thank you.” Guess what, I met a lady last night who substitute teaches on a regular basis. She said she “requires” her students to say: "Yes Ma’am" and "No Ma’am". She works with 7th and 8th graders. If they can be taught surely your technicians have the ability to learn and change.
I want to challenge you. Next time you complete a service call make a conscience effort to thank the customer for allowing you to serve them. As you do that watch the customer’s facial expression. I think you might see a bit of a grin and/or a positive look of appreciation on their face. Sure, you did them the favor of fixing their equipment so a thank you for allowing you to serve them makes it all the more unique. Give it a try. Even if you don't see a noticeable change in their expression I am betting you will feel better as you walk to the truck.
Web Site Special
Do you have a desire to be a service manager or sometimes wonder why the company needs to charge what it charges? If so, consider taking one of our Self-Paced Online Training programs after hours. Check out his month's Website Special. Each module is only $27.95 as opposed to $39.95. If your state permits online credit for CEUs, there is a quiz at the end you can turn in. Check out the offerings today.
Like all our products, if you are not 100% happy simply return it for a full refund, no questions asked.
[Back to Top]
Planning for Profit: Workshop locations available on our web site
Planning for Profit seminars are two-day workshops held around the country and are in-depth trainings on how to significantly increase profitability.
You will learn exactly what you have to charge per hour to cover costs while generating the profits you want. The program will also create month-by-month, department-by-department cash flow budgets, set proper residential and commercial maintenance agreement pricing, and let you bid jobs for profit (based on your cost of doing business).
Attendence to these events are limited and space is still available. Learn more and register today!
If a workshop isn't scheduled for your area, we encourage you to talk to your Distributor to see if they will be sponsoring a workshop in your city!
[Back to Top]
Business Advantage Webinar
We are taking a break for the summer months from the Business Advantage Webinars. They will resume again in September. In the meantime, click on the link below to listen to the last several months of national speakers on a variety of topics.
Click HERE to listen.
Take advantage of monthly webinars for your team. Monthly webinars are led by members of the Grandy team and cover topics that range from refining your budget, Succession Planning, Exceptional Customer Service, Communications for Contractors; Best, Better, Good Selling, and more. Each webinar will be recorded and posted in the portal for 120 days after the program air date. Share them with your entire team.
[Back to Top]
Profit University Audio Series
Eight Reasons Your Business Isn't Working
By Debbie Sardone
Short Presentation Description:
If your business is not working there is usually one or more foundational areas that need to be addressed. It’s not rocket science. This presentation will help you focus on one or more areas that can literally turn things around.
Eight Reasons Your Business Isn’t Working:
Lack of Marketing
· Not a cost, market or die!
· Understanding ROI
· Consistency is the key
Failure to Track and Measure Everything
· Leads to sales
· How many sales to create a repeat customer?
· Customer acquisition costs
· Building relationships through networking
· Is your company known by customers, businesses or both?
· Giving “within” the company
· Price for profit
Are Your People the Problem
· Do your systems work?
· Hire slow and fire fast
· Consider performance pay
· How are you different?
· Knowing your customers pain
· It’s not outside forces, it ME!
Delegate or Die
· Abandon perfection
Listen to a sample of this months' program! The Profit University Audio Series features a new trade focused audio presentation every month. These programs are designed to provide the trades contractor relevant information that can help their business immediately. Get more information on this program or sign up for a monthly subscription today.
[Back to Top]
TRAIN YOUR SERVICE DEPARTMENT TO BE PROFITABLE
Self-paced online program offers the training you want on your schedule
Having an effective Service Department is more than dispatching calls, fixing equipment, and keeping customers from complaining. It's an important profit center for your business! Grandy & Associates has developed several in-depth training modules geared toward helping you develop a profitable Service Department. Each module focuses on a specific key area of profitability.
SERVICE MANAGERS' UNIVERSITY
- Module 1: Profitable Service Starts with a Solid Foundation
- Module 2: Demand Service - “It’s all about that price!”
- Module 3: Demand Service - Key Performance Indicators
- Module 4: Maintenance Agreements - Profitable Lifetime Customers
- Module 5: Maintenance Agreements - Key Performance Indicators
- Module 6: ProfitSMART Activities – Turning on the Cash Flow
- Module 7: Career Technicians, Goals, and Motivation
- Module 8: Service Department Leadership – Where are we going?
LEARN MORE about our online training program and enroll today!
[Back to Top]
"Why Do We Need to Charge So Much?" DVD has been reproduced in three DIFFERENT formats
The famously successful Why Do We Need To Charge So Much? DVD has now been completely rewritten in three different formats. Each format has a unique purpose with interaction.
• Online Version – The online version is interactive and can be used by any individual at any time. It contains a 10-question quiz at the end, which is automatically graded. Assuming the participant receives a grade of 80% or better, a Certificate of Completion can be printed. This format will not only be fun to take but the Q/A will insure the individual understands what they just listened to. Stop and start as needed. If the phone rings, hit pause and return in a few minutes or days later to complete the course.
• CD Version – This version is identical to the online version, but an unlimited number of people may take the course without an internet connection. It can be easily available for the new employees to review the material. This version is perfect for companies that want multiple current employees or new hires to take the program. They can a Certificate of Completion for having learned the basics of labor pricing.
• DVD Version – This version is designed for the owner or department head to utilize in a “group discussion” environment. Any section of the program can be accessed at any time (equipment replacement costs, labor, overhead, etc.) which allows the leader to choose what material they want to cover in what order. It’s perfect for company meetings or weekly service tech meetings. Each topic takes about 10 minutes to review. This version has a Leaders Workbook, which has questions/comments the leader can utilize to direct the discussion. The workbook contains quiz questions that can be used to be sure everyone understands what has been presented.
Learn more or order your version today!
[Back to Top]