
This Business Building Tool Brought to you by Grandy & Associates		June 2010

A Message from Grandy & Associates

Ducks Quack, Eagles Soar!

We all get tons of information sent to us from people we know and people we don’t. Most gets deleted without reading. The following story, however, was passed on to me a few days ago. The article was entitled “Ducks Quack, Eagles Soar!”

I read this story years ago, but with today’s economy, it seemed like a great time to pass to you because every company needs to differentiate itself from its competition, but differentiation is even more important today than ever before. The author is Harvey MacKay, and this is his story about a real cab driver named Wally.

Harvey was waiting in line for a ride at the airport. When a cab pulled up, the first thing Harvey noticed was that the taxi was polished to a bright shine. Smartly dressed in a white shirt, black tie, and freshly pressed black slacks, the cab driver jumped out and rounded the car to open the back passenger door for Harvey.

He handed my friend a laminated card and said: ‘I’m Wally, your driver. While I’m loading your bags in the trunk I’d like you to read my mission statement.’ Taken aback, Harvey read the card. It said: "Wally’s Mission Statement: ‘To get my customers to their destination in the quickest, safest and cheapest way possible in a friendly environment.’"

This blew Harvey away, especially when he noticed that the inside of the cab matched the outside. Spotlessly clean!

As he slid behind the wheel, Wally said, 'Would you like a cup of coffee? I have a thermos of regular and one of decaf." My friend said jokingly, ‘No, I’d prefer a soft drink.’ Wally smiled and said, ‘No problem. I have a cooler up front with regular and Diet Coke, water and orange juice.’ Almost stuttering, Harvey said, ‘I’ll take a Diet Coke.’ Handing him his drink, Wally said, ‘If you’d like something to read, I have The Wall Street Journal, Time, Sports Illustrated and USA Today.’

As they were pulling away, Wally handed my friend another laminated card. ‘These are the stations I get and the music they play, if you’d like to listen to the radio.’

And as if that weren’t enough, Wally told Harvey that he had the air conditioning on and asked if the temperature was comfortable for him. Then he advised Harvey of the best route to his destination for that time of day. He also let him know that he’d be happy to chat and tell him about some of the sights or, if Harvey preferred, to leave him with his own thoughts.

‘Tell me, Wally,’ my amazed friend asked the driver, ‘have you always served customers like this?’

Wally smiled into the rearview mirror. ‘No, not always. In fact, it’s only been in the last two years. My first five years driving, I spent most of my time complaining like all the rest of the cabbies do. Then I heard the personal growth guru, Wayne Dyer on the radio one day. He had just written a book called “You’ll See It When You Believe it”. Dyer said that if you get up in the morning expecting to have a bad day, you’ll rarely disappoint yourself. He said, ‘Stop complaining! Differentiate yourself from your competition. Don’t be a duck. Be an eagle. Ducks quack and complain. Eagles soar above the crowd.”

‘That hit me right between the eyes,’ said Wally. ‘Dyer was really talking about me. I was always quacking and complaining, so I decided to change my attitude and become an eagle. I looked around at the other cabs and their drivers. The cabs were dirty, the drivers were unfriendly, and the customers were unhappy. So I decided to make some changes. I put in a few at a time. When my customers responded well, I did more.’

‘I take it that has paid off for you,’ Harvey said. ‘It sure has’ Wally replied. ‘My first year as an eagle, I doubled my income from the previous year. This year I’ll probably quadruple it. You were lucky to get me today. I don’t sit at cabstands anymore. My customers call me for appointments on my cell phone or leave a message on my answering machine. If I can’t pick them up myself, I get a reliable cabbie friend to do it and I take a piece of the action.’

Wally was phenomenal. He was running a limo service out of a Yellow Cab. I’ve probably told that story to more than fifty cab drivers over the years, and only two took the idea and ran with it. Whenever I go to their cities, I give them a call. The rest of the drivers quacked like ducks and told me all the reasons they couldn’t do any of what I was suggesting.

Wally the Cab Driver made a different choice… He decided to stop quacking like the ducks and start soaring like the eagles.

Ok, you have heard the story. Harvey shared the story with over 50 cab drivers and all but two simply ignored his suggestions and continued in their old ways. Now the choice is up to you. Are you willing to change and more importantly will you follow through and do it? If you do make changes, give me a call and we will share how you doubled your income with the rest of the industry.

When you differentiate your company from others it often involves increased costs. Do you know how to incorporate those additional costs into your pricing? If not, you might want to consider attending one of our three-day “Basic Business Boot Camps”. Check the schedule of dates and locations on our website at www.GrandyAssociates.com.

Tom Grandy

Grandy & Associates

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Billed? Or Charged?

So you’ve been reading these articles regularly and heard the message that non-billable time is a killer. You drank the Kool-aid and you understand that non-billable time is your most expensive cost of doing business. As a result, you sat down with your crews, educated them on the need to log their time against jobs, and you knew the financial health of the company would benefit as a result. They have been doing this for some time, but you still are not seeing the end benefits. Life is still a constant struggle to pay the bills, make payroll or pay your quarterlies let alone actually being able to take a meaningful wage out the company.

Where To Focus
This issue typically affects departments in your company where you are doing jobs that were quoted to the customer and will take a longer period of time. Work done on a "Time and Material" basis will typically be tracked accurately. You work an hour, you bill an hour. Service work done on flat rate could be an issue if the tech is not aware of how much time is allotted for a given repair or consistently goes over an allotted time, or if he neglects to properly use the flat rate book. If you are affected by this, you need to run flat-rate drills and get your guys familiar with using the flat rate book properly. However, the area that can tend to hide this issue more than any other is that department that does bid work – new construction, retrofit, installation. You know ... it's that area where you quote the job with 15 hours or more, get the job, and the guys head off to the jobsite day after day, and you just hope that the job comes in making a profit.

Where Does the Time Go?
Since you stress that the installers need to account for all of their time, they have gotten very good at making sure that all their time is charged off to the jobs they are working on. Time spent loading the truck with material needed, time spent in the shop bending up ductwork, piping that manifold, even the drive time to and from the job are logged to that job. They are accounting for every minute and nothing gets unaccounted for. We have now eliminated non-billable time, right?

Not so fast! We have just entered the world of billable vs. chargeable. Let’s take a closer look to make sure you not stuck here as well.

Billed? Or Charged?
I have worked with several contractors over the past six months that were affected by this issue. They understood non-billable time and that it is the single greatest expense to most trades companies, but they got tangled up in the billable vs. chargeable issue. Time was being charged to jobs, but that is not the same as billing it to a job. Your billable hours in the job are the hours you figured into your bid (that word "bid" is a whole other article. If we’re bidding jobs, we are only asking for the price to be driven lower. But I digress). It really has nothing to do with the hours the guys are spending on the job.

If our bid included 40 man hours to install a new system, then we have 40 billable hours. The typical installation technician will be around 20%-30% non-billable, but you need to track their time against the jobs they are doing. If you check their timesheets and they logged 40 hours against this job, then you had no non-billable time. If they logged 50 hours against this same job, then you had 10 non-billable hours on this job. If they got the job done in 35 hours, then you not only had no non-billable time, but your rate per hour skyrocketed and you did really well on this job.

Let’s dig deeper. Let’s say your labor rate in your quote was at $55 per hour and you figured it would take 60 hours to complete the job. Revenue from labor on this job should have been $3300 ($55 x 60 hrs). If it actually took 75 hours to complete the job, that means that you only made $44 / hour ($3300 / 75 hrs). Chances are that there was not that much profit in the job and you are below your break even rate.

On the other hand, if the crew finished the job in 50 hrs, you’re not going to give a credit back to the customer. Instead, you made $66 / hour ($3300 / 50 hrs). If the price you used in your original quote of $55 / hr was accurate, then anything over that amount is pure profit. In this case, that means you recognized an extra $550 in profit (10 hrs x $55 / hr).

How Do We Know for Sure?
There are three things that you need to do in order to know if you are profitable on this type of job.

First, you need to know what you have to charge per hour in order to cover the real costs of running this department in your company. You need to know what your break even rate is. It does you no good to charge $55/hr if your break even is $60. Just because you got the job, and got it done in the timeframe quoted, does not mean you were profitable. Model your company. Determine what you need to charge per hour – then charge it.

Second, you need to track the actual hours being charged to each job. Compare this against the quote for each job to see how they compare. We are actually talking about doing a partial job costing here. Ideally you would track not only hours charged to the job but also all materials and compare that to the original quote to see how the entire job came out. If you don’t have the ability to put it all in place, at least track your hours. Are the crews getting the jobs done in the hours quoted or not? If they are not, then you have non-billable time that is draining profits from your company.

Third, find out why. It is either because they are not working efficiently and you need to do a better job of managing them (or the flow of the job – getting materials there on time etc.) or your not quoting the job accurately. Your under-bidding the job and don’t have enough hours built into the job.

You can track the hours on each job with a very simple spreadsheet. In the example below:

As you can see, you are entering the hours in your bid, approximating how far along you are in a job and that to the number of hours you have already charged to the job. This will help you see if you are on target to come in at the target quoted hours. Knowing that you are falling behind when the job is only half done is better than waiting until the job is complete and learning that you overshot the job by 30% and can’t do anything about it. You can access a free copy of this simple job Time tracking spreadsheet at our eNewsletter webpage.

If you want help determining the real cost of running your business, determining your breakeven rate or better understanding the effects of non-billable time, attend the Basic Business Boot Camp . By the time you leave, you will know all of this and much more. There is never a good time to leave for training but the longer you wait, the more you loose. You can’t afford not to.

If you need help putting together a plan for your company, consider attending one of our three-day Basic Business Boot Camps. Check the schedule of dates and locations on our website.

You can also register to attend a FREE live webinar to learn more about the program. Choose from one of the scheduled dates or request a date that works for you.

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The No. 1 Fear Factor in America

Towards the end of our three-day Basic Business Boot Camp I ask the class. “What do you think the number one fear factor in America is?” Most in the room immediately respond with the right answer. “The number one fear factor in America is public speaking.” I then tell them they are correct. My next question is: “How do we overcome the fear of anything?” The proper response is that we do it over and over again until we feel comfortable in that situation.

We then have the class fill in a piece of paper that asks them what they have learned about their company thus far, and we ask them to list the three things they are going to do when they get back home ... in priority order. Next, we tell them each attendee will be required to stand up in front of the class and either read, or paraphrase, what they had written. This is often the most enjoyable time of the boot camp, and guess what, nearly everyone does a GREAT job of public speaking.

Now let’s move a bit closer to home. We have talked about how important it is for your service techs to “educate and inform” the customer about maintenance agreements and the possibility of upgrading their equipment. Educating the customer is critical and it will bear a lot of fruit. Everyone reading this article will probably agree that the tech needs to talk to the customer. Well agreeing, and doing it, are two different things. It’s kind of like agreeing it would be fun to sky dive but how many of us will actually do it. Most of you will also agree that role playing during your service meetings will help the technician become more comfortable in front of the customer but that is only a few minutes a week at best. It helps….but more help is needed.

I want to suggest you send (and pay for!) your technicians to attend a Dale Carnegie-type course in public speaking. Before you announce the program, begin to talk to your techs about the importance of talking with the customer. Share how sales can substantially increase, which will result in more earned spiffs and greater job security. Talk about what a poor job most companies do in this area. Tell them about how being comfortable talking to people is one of those skills that will benefit them the rest of their lives. Then announce that you are sending them to the course. Tell them they will be paid their normal hourly wage to attend and will be given a $XXX bonus when the class is completed.

Yes I can hear you, “Tom, my techs won’t go!” They will if it is condition of employment and if they fully understand that in the current market your company MUST differentiate itself from other companies. Read the lead article in this eNewsletter entitled “Ducks Quack, Eagles Soar” to your techs and ask them for suggestions on how they can contribute to differentiating the company from others. That will be a fun discussion all by itself.

And yes, I hear the other argument as well. “Tom a class like that will cost a lot of money, not to mention paying the guys to attend and giving them a bonus when the class is completed.” My answer to that is simple….do the math!

The KPI for creating a “Qualified Sales Lead” is that 12%. That means of all the service calls a tech goes on, 12% should result in the creation of a qualified sales lead. If the tech goes on 100 calls a month, and they hit the KPI of 12%, that means he or she will generated 12 qualified sales leads. If your trained sales person, or yourself, closes half of those leads at an average sale price of $5,000 that’s additional retrofit sales of $30,000 for the month or $360,000 for the year. That is a very good return on your money.

By the way, the KPI of 12% is just one of the 24 KPI’s ProfitMaxx accurately tracks, by tech. If you want productivity and profitability to soar try utilizing the ProfitMaxx software program to track and reward your techs for outstanding performance.

If you would like more information on the ProfitMaxx software give us a call at 1-800-432-7963 and/or sign up to attend a FREE 45-minute webinar. If you want to check out ProfitMaxx on your own then simply click the following link that will provide lots of information on ProfitMaxx, including a previously recorded webinar. You can also register to attend a FREE 45-minute Webinar.

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Selling With Style - Buying Habits of High D

Everyone is a sales person. Everyone is selling something every day.

Did you ever notice how sometimes you meet with a potential customer and everything just seems to click. You’re surprised at how well the sales call went and you are feeling really good about the sale. Then you meet with the next customer and you almost feel like rookie salesperson on your first call. Why is that? Last month we started a series titled Selling with Style where we will look at the buying habits of each of the four behavioral styles. It is important to know that here are no absolutes but there are some very strong tendencies of each of the styles in their buying habits. Let’s take a look at the buying habits of the High D.

If you recall, the high D is the matter of fact, get to the bottom line, give me the damages type of person. Everything is a challenge to be conquered – including to win over the person who is trying to sell them something. They don’t like you to waste their time and they are forward thinking. As a result, they will tend to be interested in new products and innovations. To give you a point of reference, approximately 27% of the US population has a High D as their driving behavioral style. If you want to review the High D behavioral style, review the article in the past issue.

Sales Presentation Required
Keep in mind that the High D will tend to have several things going on at once. Don’t waste their time. They don’t want a lot of facts and figures - just hit the high points and get to the bottom line. Know your information as both you and your products will need to be credible. If you’re not, they can dismiss you quickly. They will be impressed with an n efficient, businesslike approach and will not want to see many testimonials, research, data and things like that.

Driving Forces for Selling to a High D
There are several driving forces that you need to keep in mind when dealing with the High D behavioral style. If you keep their style in mind the following forces for selling will make sense to you.

Prepare you sales presentation for efficiency. Omit minor details
Flatter the ego. Concentrate on the immediate sale.
Start with business—they will let you know if they want to chat.
Ask questions so they can tell you about their operation, home or lifestyle.
Stress opportunities for prestige, challenge and efficiency.
Give them direct answers
Emphasize results an the bottom line
Ask for their opinion.

If you arrive at the sales call and are not prepared, you will have a hard time making the sale. Also, if you try to impress the high D with your vast knowledge, they will tune you out before you get to the heart of what you want them to pay attention to. Don’t be indecisive. You will need to be prepared and be able to answer their questions with out a lot of stories or detailed information and don’t continue to offer your opinion. They don’t care about it. Get their opinion instead.

Questions to Be Ready For
Since each of the four styles view life from a different vantage point, each will ask different types of questions during the buying process. You need to be prepared for these when getting ready for the meeting. Here are some typical questions that a High D will tend to ask:

What does it cost?
Is this the top of the line model?
Can I change it?
Is it new?
What is the warranty?
Are you sure you know what you’re talking about
(I still remember all too well as a young technician talking to a customer on the phone and having her demand “give me someone who knows what their talking about. I did, but didn’t deliver with confidence – ouch!)
Who else is using this?
How soon can I get it?
What are my payment options?
How much will it increase my efficiency?

Prepare and be ready to answer these types of questions when talking to a High D customer.

Closing the Sale
Remember that a High D likes to be in control. If you don’t let them feel a level of control, they may just take it in the form of going elsewhere. When presenting to this person, give them a Choice. Give the High D a choice of two options. This way, they are in control of the decision making process, not you. By selecting either one, they are indicating that they are going ahead with the purchase. This could be as simple as “You liked both models I showed you, which one best meets your needs?”

Once they make a choice, they are one step close to the final decision. Continue giving them two choices all the way to the final “yes”. The next question might be “We have an opening in the schedule on Tuesday or Wednesday, which day will work best”?

Study the High D behavioral style. Get to know them like the back of your hand. Since they are looking for results, they will tend to make quick buying decisions if you are ready for them and get them the information they want, when they want it.

One Last Thing…
If you have been following along with this series, you know that none of the styles are good or bad, they just are. You also remember that you need to know your style before you can successfully communicate with your customers. If you are a High D behavioral style (for a reminder of this style read about the High D ), print out the Behavioral Skills Reference Sheet and review yourself, Read the person you are working with, determine the Behavioral Style Match (BSM) and Review how you need to alter your typical style when dealing with any of the four styles.

Last month we offered a free download from our Small Business University by Roger Dawson titled "Contractor Personality Types Part 1," but then neglected to post the audio program for you. Hundreds of you went on a wild goose chase with no results. I promise, I have delivered this time. In this program, Roger will describe the (4) four types of personalities most contractors possess. During this presentation, he will help you determine which group you belong in and how to overcome the weaknesses you may identify. To get this free program, visit the eNewsletter area of our website.

Next month, we’ll take a look at the buying of the High I Behavioral Style.

If you want more information about identifying the four styles, we can help. Bill Kinnard is a Certified Professional Behavioral Analyst and has years of training and expertise in this area. If you would like more information on assessments to help you determine your behavioral style or that of your employees, or our Sales Strategy Index Assessment, visit our Hiring Solutions webpage or send me an email .

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Outshine the Competition: Business Etiquette Tips for Success

By: Barbara Pachter

Description of the Presentation:
Vince Lombardi won a lot of NFL championships because he consistently taught the foundational basics to players that should have already fully understood

them. This presentation on business etiquette will also focus on many things we “should” all know, but surprisingly few actually follow. Proper business etiquette can make a break a sale.

Key Points:

Four Areas of Business Etiquette

1. Rapport Building (establishing connections with your customers)

Proper handshake
Speaking to other people during the day
Small talk (stay away from sex, politics and religion)
Mingling (go with a positive attitude and practice)
Send thank you notes

2. Professional Presence (how you present yourself to your customers)

Posture
Be aware of your “standard” facial expression
Pay attention to your wardrobe
People notice shoes!!!
Sound as good as you look
Choose your words wisely

3. Business Dining (how you handle yourself at a business meal)

Put customer at ease
If you are the host (select the proper restaurant, consider diet restrictions, make reservations, arrive early and make menu suggestions)
Good table manners (know now to use place settings properly)
Stay sober
Discuss non-work topics at first (business during dinner and after)
YOU pay the bill (arrange for it to be paid away from table)
Thank them for coming

4. Techno Etiquette (how to communicate using technology)

Six (6) e-mail guidelines
Three (3) key suggestions for cell phones and texting
Social Media – Think before you post!

The Small Business University 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!