Archives for March 2019

By Dave Ramsey

One of the keys to building a dedicated team that will pull together and do whatever it takes to get the job done is making sure they’re properly compensated. Treat your staff the way you would like to be treated, and you’ll find yourself surrounded with passionate people who willingly go the extra mile.

A good compensation plan motivates and encourages excellent performance. While salaries and great commission structures are a big part of making this happen, other things like profit sharing, raises and unexpected cash bonuses should also be part of your strategy. But did you know studies show non-cash rewards can be just as important? And the good news is you don’t have to break the bank to offer them. When it comes to this sort of compensation, a little creativity goes a long way.

Exercise a little flexibility
Giving your team the option to choose a specific set of work hours is becoming more and important. In a world of long commutes, crazy family schedules and year-round school calendars, establishing flexible work hours is important. Remember to set specific, understood parameters, so you’ll be able to conduct business as usual.

Make sure their stomachs are full
Back when I first started my business, we hosted an occasional company-wide potluck meal. Not only was it in inexpensive way to celebrate, but I also noticed it served as a great way to build relationships. Today, we cater monthly lunches for the entire company — more than 500 team members. It took us a while to grow to that point, but whether it’s a big lunch, a gift card to a favorite restaurant or celebrating birthdays once a month with cake and ice cream, people get excited about free food!

Additional time off
After they’ve completed one year with the company, each of our team members earns one additional week off to work with a certified ministry of their choice. Team members must submit their activity proposal for approval. Allowing them to make a significant, hands-on impact to a worthy cause while helping those in need enables them to come back inspired and spiritually refreshed.

Good, old-fashioned fun
We know we need to work, but most people I know are kids at heart. Connecting with that inner child can be a great motivator, and the simplest way I know to do that is by just letting go and having fun. Try scheduling unexpected things, like family movie nights at a local theater or renting an ice skating rink for a couple of hours. Summer outings and a Christmas party should always be on your list! This kind of stuff doesn’t have to cost a fortune, and the return on investment in terms of happy team members is enormous.

Creating an excellent overall compensation plan takes time, attention and careful planning, but it’s important to have a generous spirit toward those who help you win. So treat them well in all areas. You’ll live with fewer regrets, and you’ll profit more in all areas by attracting and keeping talented and passionate people!

by Tom Grandy

Yes, you read the title of this article right. But, let me rephrase the question a bit. If you and your wife have been married for 25 years and were having some problems in your relationship, would you schedule an appointment with an unmarried 21-year-old graduate whose parents are divorced? Sounds a bit foolish, but many marriage counseling services are staffed with people I just described. I understand that they may have Master’s degrees or PhDs and are trained on communication techniques and theories. But, if I were looking for help, I would want to seek out someone who has been married for 40 years who could provide some “practical” advice.

To be fair, I have not interviewed couples who have used the services of our recently graduated, unmarried marriage counselor; but I have a hunch that some of the advice may not be based on wisdom that can only come from experience. On the other hand, suggestions from an older couple who has “been there and done that” would probably help the couple’s marriage relationship a lot.

Last week I spent three days providing free coaching sessions for contractors at the National Air Conditioning Contractors Convention in Charlotte, North Carolina. The sessions went really well, with most contractors picking up a few tips from the old guy who has been providing business training to the industry for nearly 30 years.

Part of each initial conversation centered around the contractor’s experience at the convention. Nearly everyone said it had been a great experience and they had learned a lot. I usually responded with, “I know the seminars were probably terrific, but I’ll bet you learned more by talking with contractors one-on-one than you did by attending many of breakout sessions.” Literally 100% of the contractors I talked to agreed. The real, down-to-earth, practical advice came from talking with other contractors. That is not a slam on the presenters – after all, I am one of those guys! But, when it comes to relating and asking personal business questions, they wanted to talk to someone who had “been there and done that.”

It has been my experience that contractors who are part of a mixed group of peers have found it to be their most valuable asset when it comes to answering everyday questions about their businesses.

In case you are unfamiliar with the term mixed group, it normally consists of 4-6 contractors who do similar types of work, with each living in non-competing territories. They typically meet two to four times a year, taking turns at each other’s facilities. Each visit consists of evaluating the host company’s business while often covering a specific topic like hiring, marketing, KPI’s (key performance indicators), etc. following the company evaluation. What begins as a couple of in-person visits a year quickly evolves into monthly, or even weekly, phone calls covering specific needs to see if others in the group might have some input. They usually do! Every contractor in every trade who I have talked to that is part of a mixed group tells me the same thing. They say it is the best investment they have ever made of of their time, energy and resources.

I encourage you to attend conventions, sign up for seminars, and attend chapter meetings and/or live webinars. You will undoubtedly pick up some great tips that will help your business. However, if you are willing to be honest with others, while receiving practical time tested advice, I would strongly suggest you consider being part of a mixed group.

Providing your teenager with a car is not a rite of passage, although peer pressure can certainly make it feel that way. If you are a parent, and you give your teenager a vehicle, you probably have some spoken (and unspoken!) expectations that go along with the gift.

• Gratitude – You just invested several thousand of your hard-earned dollars. You were not required to provide the car; you did it out of love for your child. In simple terms, you wanted to bless them. It is not an unrealistic expectation to want a thank you in return for the gift.
• Take Care of the Vehicle – With the gift also comes the expectation that your child will care of it. That includes driving at safe speeds, washing it occasionally, and filling it up with gas, no matter who is paying for it.

When a company assigns a vehicle to an employee and they are allowed to drive it home each night, there is also a similar set of expectations. A grateful heart is a good start, followed by good driving habits that will keep themselves and others safe. Sure, the company has a vested interest in allowing the vehicle to be taken home each day. Techs can be dispatched from their homes, time and money are saved when after-hours calls come in at 2:00 AM, or there may be a security issue in keeping the vehicle on the company premises.

However, even with the advantages for company, it is also a huge benefit for the employee. If the company did not provide the vehicle, what additional costs would you incur as a company employee? Let’s list just a few:

• Your Own Transportation – Translated, if you didn’t have a company vehicle, you would have to buy your own vehicle. That means spending thousands of dollars on a loan, lease, or the outright purchase of a vehicle.
• Gasoline – Someone has to fill up the tank. That would be you.
• Insurance – If you are going to drive, you are required to have insurance. That costs a few bucks.
• Maintenance – When your vehicle breaks down, that is going to not only involve paying to get it fixed, but you’ll be responsible for alternate transportation to get where you need to go.

When the company provides the vehicle, all those costs are covered for you. The company literally spends thousands of dollars a year on that vehicle. Those are dollars you don’t have to spend.

Don’t abuse the privilege you have by doing side work after hours using the company vehicle. It’s not only a slap in the face to your employer, and it could cost you your job. What is done in the dark will come to the light, eventually.

Think about what I just said. Perhaps you might want to tell your boss how much you appreciate that specific benefit of working for the company.

by Tom Grandy

It’s an old topic, but one that often needs revisiting. Has your service department adopted flat rate pricing yet? If not, it’s time to seriously consider the conversion. Most contractors have very strong opinions about flat rate pricing; however, the reality is if you have actually calculated what you need to charge per hour for residential service, it is highly likely your hourly rate well exceeds $100/hour. Guess what, that hourly rate is a tough sale to the customer if you are on time and material pricing. By the way, it is the rare company that can charge less than $100/hr for service and still make a reasonable profit.

The concept of flat rate pricing is a matter of customer perspective. Let’s look at an example. Close your eyes and visualize that you are living in my hometown of Owensboro, KY. There is a really nice subdivision where the average home is $500,000 or more. It has rolling hills, so most homes are two story with walkout basements. Who lives there? Older people with lots of money!

It’s autumn, and the huge oak and maple trees are changing color. Mr. and Mrs. Jones are walking around the back yard admiring all the beautiful fall foliage. Suddenly Mr. Jones says, “Our gutters are full of leaves! I think I will go get the 40-foot ladder and clean them out.” Now it’s Mrs. Jones’ turn to talk. “Bill are you nuts? You’re NOT getting on that ladder. You might fall, or get hurt, at which point I will be the one taking care of you. You are NOT getting on that ladder.”

Suddenly the front doorbell rings and its little 16-year-old Johnny from down the street. “Mr. Jones, I noticed your gutters are full of leaves. Would you like me to clean them out for you?” Mr. Jones then asks how much little Johnny is going to charge. Johnny tells him he charges $50/hour. Mr. Jones blood pressure instantly goes up as he slams the door. He is not paying any 16-year-old $50/hour for anything, period.

Let’s look at same situation, but from a different perspective. The bell rings and little Johnny again asks Mr. Jones if he wants his gutters cleaned, and Mr. Jones again asks how much he is going to charge. This time, however, Johnny tells him he will charge $50. Mr. Jones is now thinking $50 doesn’t sound too bad. Not to mention, he won’t have to get out the ladder out and Mabel won’t be upset. “Sure Johnny, go ahead and clean them out”

Now how long will it take little Johnny to clean the gutters? Probably an hour. But now Mr. Jones is focusing on the price of getting the work done and he is NOT focusing on how much little Johnny is charging per hour. Yes, flat rate pricing (sometimes called Up Front Pricing or Guaranteed Pricing) is simply a matter of perspective.

Let me summarize some the benefits of being on flat rate pricing.

• You no longer have an hourly rate – Now the potential customer can’t call all over town to compare hourly rates to determine who will do the repair. Besides, a lower hourly rate does not necessarily save the customer money. It might take the lower rate company twice as long to get the job done.

• Less customer complaints – Flat rate pricing eliminates 90% of your customer complaints. What do customers complain about? Complaints generally center around how long did it took and/or perhaps they have looked up the part cost on the internet. Both items are now invisible to the customer.

• Better cash flow – Since there is no calculation on the tech’s part, or the office, payment can (and should) be collected at the conclusion of the repair.

• No “announcement” of rate increases – On time and material a $5 or $10 increase in your hourly rate is a big deal. The company not only had to announce it to the customer, they had to somehow justify the increase. If the company were on flat rate pricing, it would simply need to change the internal hourly rate and have the book reprinted, or tablet pricing updated. No announcement to the customer, no disruption of service, and no customer complaints. New books are printed and out the door the tech goes with the price increase being invisible to the home owner. Oh, did I mention profitability just went up!

• Your best technician is now also your most profitable – When the company bills based on time and material, who is your most profitable tech? It’s usually your slowest, least efficient technician. After all, the customer is billed based on how many hours it takes to do the job. However, when flat rate pricing is utilized, the customer is billed by the task. The quicker the task is properly completed, the more money the company makes. Now your best tech is also your most profitable tech.

You might also want to consider the fact that the trades industry is the only industry that currently does not tell the customer how much it will cost BEFORE the job is done! Can you imagine strolling through the grocery store and simply putting items into your cart, not knowing how much they will cost? Sounds crazy, doesn’t it? But that is exactly what the trades industry does. To make matters worse, some customers don’t find out what the repair cost was until they receive their bill a week or two later! Oh, and by the way, a recent nationwide survey revealed that 90% of residential customers preferred flat rate pricing over time and material pricing. It’s an old principle, but it’s true. Give the customer what they want!”

Also, when you do switch to flat rate pricing, or if you are already on it, please, please update your books, or tablet pricing, at least twice a year. The cost of doing business is constantly going up. If you don’t increase your hourly rates as costs go up, who eats the increase? The company does.

Now for one last closing comment. Customers call for service when they have a problem, right? When it’s fixed, the sense of urgency has vanished. If they paid for the repair when completed, all is well. If they receive a bill in the mail a week or two later, the sense of urgency is gone and the bill gets put in the pile marked “Pay when we have some extra money lying around.”

Thirty years ago, auto repair facilities charged by the hour. Today 100% are or flat rate pricing for every repair. Guess what, that is where the trades industry is headed. You can be a leader, or you can be a follower, but the wave of change is on the way!

By Dave Ramsey

Published with permission in the April 2016 newsletter.

As a small-business owner, one of the biggest challenges you’ll face is mapping out your company’s benefits package. Simply put, offering a great benefits package helps attract the best people.

But while financial compensation is alluring, other benefits can be just as important when it comes to helping a candidate say yes or no to your offer. When it comes down to deciding between two similar jobs that pay the same, the benefits package could make or break the deal.

Recruiting
Remember to highlight your benefits when trying to recruit people for an open position. A good healthcare plan is an important factor to include in your benefits package, but so are other wellness options—including financial wellness. Companies that offer personal and professional educational options to their workers will, in turn, reap the benefits of loyal and better trained team members.

Retaining
Constantly assess your benefits package using input from team members. While there is value in marketplace statistics and surveys, I would advise using these only as a starting point. When workers feel their opinions and needs matter, there’s a better chance that they’ll focus on the team and their jobs instead of just a paycheck. We’re talking about loyalty here. If your company offers the appropriate perks and benefits, team members won’t be searching for new jobs to meet their wants and needs.

Retirement
Offering solid retirement options is one of the biggest things you can do to help team members prepare for the future. It’s also a great idea to offer your team members detailed education about the different kinds of retirement plans offered and actively help them plan for retirement. If you can afford it, matching retirement contributions are a great resource to offer as well. Remember, properly timed and planned turnover through retirement is as good for your company as unplanned turnover is costly. Every business needs a balanced mix of new and seasoned team members.

Keep these three R’s in mind, and you’ll be on your way to growing a team of happy, loyal and productive workers!

I am 69 years old and was raised in Virginia. When I grew up, most young people were trained by their parents to respect their elders. The terms “Yes Ma’am” and “No Ma’am” were a means of showing respect. I don’t know about you, but it has been a long time since I have witnessed true respect for the older generation. However, every once in a while, I hear someone respond with a “Yes Sir” or “No Sir.” When I hear it, I immediately turn to see who said it. Not only that, but even without seeing the individual, my thoughts are “Wow, that person was well trained by his or her parents to respect older people.” I am also curious to find out who that individual works for.

Not long ago, I was in a fast food restaurant and I witnessed a young person behind the counter use language that conveyed total respect for the older customer they were serving. I turned to my wife and said, “That person won’t be working here long!” When employees treat the older generation with respect, it is so rare and refreshing that it will be noticed. Before long, one of those customers will be asking for a name and suggesting the individual give them a call about a possible job opportunity.

There is only one opportunity to make a first impression. When the employee’s attitude is outstanding, they are neatly dressed, have basic customer service skills, and are genuinely respectful of the customer, young or old, it makes a lasting and positive first impression. If you can find an individual like that, hire them immediately. You can train them to do the office job, or learn technician skills, but you can’t train attitude!