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A New Look – A New Feel

As I'm sure you've noticed, we have a new look and feel. This is much more than just a face lift at Grandy & Associates -- our hope and prayer is that these changes will both help and inspire you. Let me explain...

 

For years we have used the tagline “We Teach Contractors How to Run Profitable Businesses!” This is much more than just a tagline for us; it’s a way of life. Everything we do is done with the design of helping you be more profitable. The design of this e-nwsletter is part of a much bigger change to our look and feel. Our website has also been completely redesigned with a whole new set of tools – and there’s more on the way. Let me give you a brief overview of what is new.

Easier Navigation
We worked hard to provide you with information that can benefit you and make it easy to find. If you are looking for information regarding our programs, we have designed each area to provide everything you are looking for in one place. Take a look at our new Boot Camp home page and you will find everything about the boot camp including testimonials, program overviews and more. Our new ProfitMaxx home page will give you a solid background on this company-changing tool. Our new download center for Small Business University has been completely redesigned. Go ahead, take a look around and see how easy it is to find things. 

Small Business University
Our Service Contractors Business Presentation of the Month has been rebranded as the Small Business University Audio Series. For those who don’t know, you have the ability to listen to or download any of over 180 different programs that target different areas of your business.  Our monthly subscribers have told us they like to listen to a sample of the program first to see if it is something they want to devote the time to listen to. We felt that everyone should have this ability. We also understand you may not want to subscribe to the whole series but would like to get your hands on just a few programs. The new download center is now available to anyone. You can see all 180 programs and even listen to the first few minutes of every program. Then if you like it, you can either subscribe online or purchase just that one program. Better yet, you can purchase each program on CD or on immediate download. Take a look at www.GrandyAssociates.com/SBU .

Online Store
Many of you call us looking to get your hands on some of the programs and materials that we use as we train contractors across the country. Our new online store has many of the programs and products available so you can get them when you need them. You can even find the locations of our current boot camps and register right there. You can see the items that others just like you find most helpful and you can provide feedback to help other contractors.

Blog
Our new blog is online, and new content is being added weekly. This is a great place to find regular bits of information that can help you with your business. Join in on the conversation and let us know what you think of the various discussions that take place.

ProfitMaxx Performance Series
Last fall, we introduced the ProfitMaxx Performance series, which is a tremendous learning tool for both ProfitMaxx users and non-users alike. This is a wonderful business learning tool that defines the Key Performance Indicators that you need to be watching in your service department. Each video in this series defines the indicator, explains what it costs your company if your tech does not reach this goal, and how you fix the problem if they are missing it. Check back here often as new videos will be coming out monthly.

More to Come
As the months go by, we will continue to add new content to the website that will directly impact your company. You will be able to find an archive of articles and white papers we have published in the various magazines around the country, financial calculators and much more. Bookmark this page and check back often.

How Does This Inspire You?
As I said earlier, it is our hope that the changes we made will both help and inspire you. Where does the inspiration part come in? Change is constant. What are you doing within your business to keep up with the change that is taking place in your market? Whether you like it or not, you are doing business in a different market today than you were even 24 months ago. Have you changed your marketing programs? Sure the economy is tight, but if you are pulling back on your marketing, you are short changing yourself. Keep in mind that everyone else in town is also pulling back. If you maintain, you will stand out.

Are you tracking the metrics of your team? Do you know how many jobs are being quoted and what your closing rates and average sales are? Have you put a budget together for 2010? Then taken your average sale and closing ratio and calculated how many jobs you need to quote in order to hit your budget objectives?

Are you tracking the performance of your service technicians? Have you set goals for each as to how many maintenance agreements they should be selling, how many sales leads they should be generating each week? There is no amount of marketing you can do that will get you as much face time as you already have with the customer through your service technicians. Take advantage of this. Get them to look for opportunities and you can impact your retrofit sales faster than anything else you do.

It’s still early in 2010. Take a close look at what is working within your business and build on it. Take an even closer look at what is not working and make changes. Don’t be afraid to change or eliminate the things that no longer make sense. Refuse to accept the notion that we do things in a certain way just because we have always done it this way. Lead your company through this downturn and position yourself to capitalize on the opportunities that are being missed by your competitors who are still doing it the same old way.

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A Simple Way To Price Your Installation Jobs

Over the past 23+ years of working with contractors, I have seen about every method there is to pricing a job.  The process used by many takes a very long time, often using a detailed estimating software program.  Now there is nothing wrong with a software program, using a detailed spreadsheet or even simply using a pad and pencil with a calculator. But each method is time-consuming and, to be honest, most will NOT tell you if you are pricing you job properly.

When it comes to pricing, some companies take the actual cost of labor and the actual cost of materials and add them together.  A percentage is then added for overhead and profit, and there you are.  Others add some direct costs to labor and/or add a markup to materials, and then add overhead and profit.  Some companies take their costs and use divisors while others use a multiplier.  If there were 100 contractors in a class, and I provided all the raw data for the job, can you guess what would happen?  Right. I would have 100 different answers and the spread in pricing would be huge. 

Personally, I like “simple.”   However before you can use the simple method, you have to determine what hourly rate you need in your installation department.  I have written multiple articles on how to properly calculate your hourly rate.  If you don’t know how, then check the archived articles, call and get our simple labor pricing software, or attend a three-day boot camp.  Remember, if you don’t know what you need to charge in each department, you are headed from trouble.  Improper hourly rates is the number one cause of  business failure in the trades industry.  Find out what your rate needs to be.  Remember all your non-billable time, salaries, overhead and profit are built into that hourly rate. 

Now let’s assume you know what your hourly rate for installation needs to be.  For example’s sake, let’s assume it comes out to $55 per man-hour.  When you calculated that rate you assumed a normal markup for equipment and materials used on the job.  Let’s assume your markup was 35%.  Once armed with the proper hourly rate, and the knowledge of what material markup was used when determining your rate, you are ready for “simple pricing”.

Now that was easy.  How long did it take to price the job?  Not long at all.  Now for the pricing to be accurate guess what two things need to be tracked each month? 

Billed Hours:

Your hourly rate is based on selling a certain number of hours per month and therefore per year.  That means billed hours need to be tracked each month.

As long as the billed hours (the blue line) is above the projected hours (the red line) you are in great shape.  As a matter of fact, if the blue line is significantly above the red line that means you have billed out significantly more hours than you projected.  If that is the case, what you could do with the next job.  Right, you “could” lower the price and still make a good profit!

Track Total Overhead Dollars:

Let’s review the steps of simple pricing.  First determine your hourly rate, which involves estimating a needed markup on equipment and materials used on a job.  To price the job, estimate the hours it will take and the materials that will be needed….like we did in the example provided.  To be sure you are on target, you will then need to track your actual billed hours and actual overhead costs against your budget.  If those two things are in line you are in great shape, well almost!  The last piece of the puzzle asks the question “Did the install team complete the job within the projected hours estimated for the job?”   If they did, great, if not you are still in trouble and will need to do a better job of estimating time or you will need to better supervise your crews to be sure jobs are completed in the estimate time allowed for the bid.

 

 

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Are You Utilizing What You Are Tracking?

 

It seldom does any good to reprimand a tech in front of his buddies or during a service meeting.  This kind of problem needs to be addressed one-on-one with the technician.  It’s time to talk to Bryant. 

First of all Bryant needs to me made fully aware of his poor performance.  He also needs to understand the affect that poor performance is having on the entire service department.  However, identifying the problem is one thing, solving it is yet another.  Often the basis for under billing lies in lack of familiarity with the billing system.  If the company is on flat-rate pricing, the flat-rate book plainly states the proper price for each task.  If the task is priced right, and the tech performs the task within the allotted time, there should theoretically be no under billing.  The book is priced right, so what’s the problem? The problem is usually based in the fact that the tech is not totally familiar with the flat-rate book.  The average service call requires 3.2 tasks per trip.  The average number of tasks actually written down by the tech is 2.0.  That means the tech did not write down all the tasks he or she actually performed which then results in under billing. 

Again, the process of improving productivity and profitability involves accurately measuring performance and then working with the tech, one-on-one, to effect change.  As performance improves, the profitability of the service department will go up and the techs earned bonus will increase.  It’s a win-win for everyone!

 

 

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D – Dominance – How you deal with problems and challenges.
I – Influencer – How you deal with people and contacts.
S – Steadiness - How you deal with pace and consistency.
C – Compliance – How you deal with rules and procedures set by others.

It is important to remember that one style is not better than another. There is no good or bad – there just is. It’s also difficult for some styles to understand why others don’t think the same way they do. For example, a person who is a high D may not understand why everyone else in the world doesn’t see things the way they do. Everyone should view the world the way they do and if they don’t their missing something. Remember, there is no right or wrong, there just is.

This month, we’ll take a closer look at the Steadiness communication style. Here are some of the traits of the high S.

There is a lot of value in having a High S on your team.  A well-blended team needs to have a mixture of all four styles. Too many of one style is not a good thing and will only end up in disharmony. That is why some companies get into trouble with their typical hiring practices. The owner simply hires people just like themselves and as a result, ends up with a team that will not function as smoothly as it should. Here is some of what the High S brings to the table:

Communication
When communicating with the High S, don’t rush right into business. Start with a personal comment to break the ice. If you focus too much on the business, they will tend to be turned off. Remember, the High S is a relationship type of person. Don’t try to force them to make a decision too quickly. They will want time to think things over. If you simply assume that since they appear to go along with you, that they agree with you, you very well may be wrong and will have problems later.  Ask them a lot of questions (preferably “How” questions) and them let them give you a response. Don’t interrupt them when they are talking or they will stop giving you input. If you’re asking the High S to make a change, let them know why it is important and then give them some time to get used to the idea. Simply telling them this is how we’re going to do it from now on and expect them to be happy about it won’t work!

When you look at your customer base and employees, can you identify those that are High S’s? Are you a High S? Once you understand how to deal with a High S style, you will find it much easier to get things done and provide happier, more satisfied customers.

Next month, we’ll take a look at the High C – Compliance communication style. In the meantime, spend some time getting to know how the High S person thinks. The success of your company depends on it.

If you want more information regarding behavioral communication styles, and the assessments that you can use to determine where your current employees and staff fall, contact me at 877-202-8891, request a license number online  or visit  the Hiring Solutions Informational Home  for more details.

 

 

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Passion alone will not make you successful.  You need passion and process. 

Four sources of passion:
1. Be passionate about WHAT you do
2. Be passionate about HOW you do it
3. Be passionate about WHO you do it for
4. Be passionate about WHY you do it

Passion is the fuel, but performance is the engine.