Grandy & Associates has a monthly web-based program called the Small Business University Audio series.  Each month features a different national speaker on a different business topic.  This program has been in existence for nearly 17 years, and there are more than 200 presentations available. A new one is added each month. 

This month I'm going to provide a few business nuggets from what I consider are the top 10  presentations.  These presentations are in no particular order.

Selling to Women - Sharon Roberts
When men talk they tend to be quiet, listen and take their turn to make whatever comments they wish to make.  Women, on the other hand, tend to “think out loud.”  That means most women tend to say what they a currently thinking.  There is nothing wrong with this process…..unless you are man.  A man tends to view the “thinking out loud” as wandering around without getting to the point, then inevitably they interrupt.  When you interrupt your wife, you tend to harm the relationship, so it stands to reason that when you interrupt a woman during the sales process, you tend to lose the sale!  When women are talking, be quiet and listen. Download

Be The Brand - Russ Evans
How much time and money has your manufacturer spent trying to get you to promote their brand?  Russ Evans caused a light bulb to go on!  His philosophy is for YOU to become the brand.  Most customers buy based on relationships.  If the customer has purchased from your company for five, 10, 15 or more years the probability is that they will continue to purchase from you because they like and trust you.  Does the customer stop buying from you if you change brands?  In most cases the answer is a resounding “NO.”  Promote yourself as the brand, not the manufacturer. Download

Doing Business In A Small Community - Jim Brown
When Jim started selling maintenance agreements he directed the office manager to place the profit portion of each maintenance agreement sold into a savings account.  When the savings account reached a predetermined level that same person was told to take 30 minutes off, drive to the bank, and purchase a 12-month CD.  Now carry the theory one step farther.  Direct your office manager to take a specific amount of money out of your business account each week and place it into a mutual fund.  If $100 a week were placed into a mutual fund you would have over $30,000 within five years (counting the growth over that five-year period).  Contractors I have shared this with have told me it’s the best thing they ever did for themselves! Download

Financial Peace for the EntreLeader - Dave Ramsey
If you are familiar with Dave Ramsey you know he strongly recommends each individual and/or family have 3-6 months of salary as an emergency fund.  Well guess what he recommends during his EntreLeadership presentation?  You guessed it.  He recommends each company save up enough money to cover 3-6 months of overhead cost. (Subscribe to the series to access this program.)

Fred Factor - Mark Sanborn
Fred is a mailman. However, Fred is not the average mailman.  Fred took customer service to a whole new level.  The story of Fred illustrates the dramatic affect outstanding customer service has on the relationship between the customer and company.  A little extra effort in the area of customer service goes a long way. Download

How to Use Office Help Effectively - Roger Fouche
Quality office help is hard to find.  However, there are a huge number of highly trained and skilled people who have families and prefer to stay home.  Roger has staffed most of his office with half-time employees.  Each person works half a day.  These workers do not take time off to go to the doctor because they have half a day to do that. They are more focused since they are there for four hours and “come to work to do a job.”  Also, the company does not have to pay benefits for half-time workers.  Bottom line!  The company has a more efficient work force at a lower cost. Download

Make A Decision To Be Profitable! – Roger Peugeot
Back in 1995 Roger was the typical plumbing company.  He provided service, home renovations and new construction.  He was working really hard but wasn’t making any money.  Most company owners simply complain and eventually go out of business.  Not Roger.  He looked at his strengths and weaknesses and then spent several months creating a totally new business plan to re-create his company.  Today Roger only does service and he is one of the most profitable service companies in his area.  Don’t be afraid to re-invent your company. Download

Nine Marketing Mistakes – Adams Hudson
The number one rule of marketing is to differentiate your company from other companies.  Guess what?  The number one marketing mistake many companies make is to copy what they consider an outstanding marketing idea being used by someone else.  Each company is unique in one or more ways.  You uniqueness is what needs to be marketed.  To be successful the customer has to view you company as being somehow different that someone else’s.  Your uniqueness is what allows you to charge more than other companies. Download

Pizza Hut Ruined the Market - Tom Grandy
Pizza Hut ruined the market by offering it well known “$10 for any size pizza, any toppings.”  It was a great success -- until everyone did it.  Now all the pizza companies are losing money.  The trades industry did the same thing.  Business was slow so we lowered our prices.  Proper overhead was not cut, nor were rates properly adjusted, resulting in the loss of profits.  When volume falls, in most cases, the price actually needs to increase, not decrease.  The lesson is simple.  Know your numbers and stick with them.  When the customer says no, they are not saying no to the price, they are telling you they have not seen enough value for what you are charging! Download

The Check Is NOT In The Mail - Leonard Sklar
Leonard’s company puts on over 600 collections seminars a year.  He has heard it all.  When a customer is not paying their bill there is a reason for it.  Usually it is simply a matter of having more bills than money available.  Who gets paid?  The squeaky wheel.  If you have 10 bills that are past due, and one company calls you every day asking when you will be paying the bill, which one are you most likely to pay.  Right, you will pay the company that is calling you every day.  Get the point! Download

Now this is the hard part.  Take at least one of the above ideas and actually put it into practice within your company.  If you do, you will make more money.  If you don’t, you just wasted 15 minutes reading this article.

Subscribers to the Small Business University Audio Series receive a physical CD of the current month’s presentation.  Subscribers also have full access to the web version allowing access to all 200+ past presentations, each of which can be looked up by specific categories (sales, marketing, business management, flat rate pricing, etc.).  The cost is only $24.95/month.  However, this month’s web-special reduces the cost of only $19.95/month ... and you can cancel at any time.  You can also check out the program, free of charge, by visiting the Small Business University Audio Series page on our Website.   If you want to take advantage of this month’s website special simply click the link below:

April 2011 Website Special
SUBSCRIPTION TO THE SMALL BUSINESS UNIVERSITY
Only $19.95/month!
(Regularly $24.95/month)

Click here to sign up!

Tom Grandy
Grandy & Associates   

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Five minutes costs a lot
By Tom Grandy

Three hundred seconds, better known as five minutes, might not seem like a lot of time. But, believe it or not, it is costing you a lot of money.  When it comes to your service techs, five minutes a day grows quickly in terms of the cost of non-billable time and lost income.  

Let’s assume you pay your techs $18/hour.  When you add in the company's matching taxes, the hourly rate is closer to $20/hour.  Now, let’s also assume your hourly billing rate is $100/hour.  For each hour the company bills out, the industry average says the tech also bills out roughly $20 in parts with an average markup of 100% for an additional $20/hour.  Net income for each billed hour is therefore $140/hour ($100/hour labor + $20 parts + $20 markup on parts). 

Five Minutes a Day Adds Up!
If you multiply five minutes a day times five days a week times 52 weeks a year,  the total comes out to 1,300 minutes a year, or 21.67 hours. 

Savings in non-billable time per year = 21.67 hours x $20/hour
                                                     = $433.33/year

Additional earned income    = 21.67 hour x $140 billed hour
                                         = $3,033.80

The above numbers are telling us that if the company could turn five minutes per day from non-billable to billable, it would generate an additional $ 3,467.13 in reduced overhead (reduced non-billable time) and additional income. 

Remember, the $3,467.13 is for ONE tech!  If the company had three service techs, five minutes a day would amount to $10,401.39/year.

Now for the big money! 
Keep in mind the average service tech has four hours a day that are non-billable.  Non-billable time includes vacation, sick, holidays, shop time in the morning and shop time in the afternoon.  Now think about travel time between calls, company meetings, callbacks, customer no-shows and warranty work. 

Oh yes, and don’t forget about techs taking extended lunch hours and/or stopping for coffee and/or a full breakfast when they leave the shop in the morning.  What about Taco Tuesday at your distributors' locations?  How much non-billable time is generated going to and from the distributor to pick up parts, not to mention the extra time they spend waiting in line or for the counter clerk to find the part.  Yes, non-billable time for an entire year really does amount to about four hours a day.  Five minutes a day is only 1% of their entire day!

What if you could reduce a tech's non-billable time by 5% (12 minutes of the four non-billable hours a day)?  The additional net difference is $8,321.11 per year ... per tech! 

How much effort would it take to cut $8,321.11 out of your office supplies, insurance, telephone or marketing expenses.  The point is pretty clear.   Turning non-billable time into billable time makes a huge difference in the bottom line profitability of your service department.  Spend a huge amount of your time trying to reduce non-billable time as much as possible. 

Non-billable time is just one of the 24 KPIs that the ProfitMaxx software program tracks on each technician.  If you want to run a very profitable service department I would suggest you consider purchasing our ProfitMaxx software program.   Each tech's productivity and profitability is measured against 24 specific industry standards.  The result is just like what we discussed.  Productivity goes up and so do profits!  Give us a call at 800-432-7963 to schedule a private webinar that works into your schedule.  

Motivation. Can you define it? It’s what causes you to get up in the morning and go to work. It’s what drives you to do the best job you can throughout the day. It’s what helped get you into this business in the first place. You were motivated to become your own boss, to control your destiny. 

You’ve got so much invested in this business. Don’t you wonder why some of your employees don’t seem to approach their work with the same drive and motivation that you do? Especially in today’s business climate, there are a lot of people who are thankful to simply have a job.  To get a good handle on this, you need to understand what motivates your employees. You know why you do things the way you do but do you understand why your employees do things the way they do.

Your Hiring Process May Be Flawed
Over the years I have some good hires and some bad hires.  I recall my first hire vividly. I was in a technical role and was hiring someone to work alongside me. I wanted them to be technically sound, so I was brutal during the interview process. I gave him wiring diagrams that he had never seen before and asked him to give me the sequence of operation. I put him in front of live equipment that I had bugged, and I watched his troubleshooting ability. He impressed me, so I hired him. Then I found out the hard way that every time he opened his mouth in front of a customer, he successfully ticked them off.

I also recall another hire I made that came right out of tech school. He was green but had a ton of potential. He had a great attitude and, as a result, I thought I would give him a try. He turned out to be a keeper and I got lucky with him. Customers loved him and quickly learned to trust him and the recommendations he made.

What make these two guys different? Both had a similar backgrounds, but one ran circles around the other. My interview process was the same, but the results could not have been more different. We’ve said it in the past: if you use the standard “interview them and judge by gut feel” hiring process, you will typically make the right hiring decision only 14% of the time. I learned the hard way that I needed to measure not only their ability and behavior but I needed to learn what motivated them to do their job before I made the hiring decision.

Motivation – The Key To Success
In retrospect I can look at these two techs, and I know what the difference was. With what I know today, I know that they were motivated by two very different things. One of the big problems I had was that one tech drew energy from the job, while the other had the energy sucked out of him. He had nothing left to give and, as a result, took it out on our customers. This was clearly an example of having the wrong person on the bus (to learn more about that one, read Jim Collins book "Good To Great").

The Six Motivators
There are six different motivators that apply to all people.  The six are:

1. Utilitarian
2. Theoretical
3. Social
4. Aesthetic
5. Individualistic
6. Traditional/regulatory

If you can define the motivators for a job, then match a person’s motivators to a job that rewards those strengths, you will see someone who will truly excel. This will be a person who will love their job and both you and your customers will see it. They will see it in the way the employee interacts with others, the passion they bring to the job, the way they treat those around them.

Over the next few months, we will take a look at each of the motivators, give you some of the common traits of each, and show you how to use them to build your team of superior performers.

If you would like to learn more about the tools you can use to help you match your employees with jobs that will allow them to excel visit our website at www.GrandyAssociates.com/TeamSolutions  or email Bill Kinnard  today.