Archives for March 2019

Tips for Making Your Accounting System More Useful (Part 1 of 2)

by Tom Grandy

If your accounting system just collects data for your accountant to file your taxes, you have missed the point.  We all have to file taxes and need a system for doing that.  However, your accounting system should do more than help you file your taxes.  It should help you run your business more efficiently and profitably.

Having worked one-on-one with contractors for over thirty years I have noticed a few things about accounting systems.  Below are a few thoughts that might help you turn your tax data collecting system into a more useful tool to help run your business more efficiently and/or profitably.

  • Create “Useful” Categories – In order for an accounting system to be of benefit – income, expenses and cost of goods need to split costs out into simple but understandable categories.  Don’t just list “Utilities”.  Have a heading that says Utilities with sub-categories for gas, electricity, water etc.  The same goes for “Insurance”.  Create subcategories for life insurance, vehicles, workman comp, etc.   Similarly, break out your income by departments.  If you only do service and installation two departments or categories are sufficient.  However, if you also do commercial work and/or new construction those department’s incomes need to be split out as well.

Create an income category for maintenance agreements if you offer them.  There are lots of reasons to track maintenance agreement income separately which we will touch on in another article.  Your accountant may tell you this amount of detail is unnecessary.  If you are the one filing taxes that may be true.  However, if you are the company owner you need to know where every dime comes from and where it went in language you understand.

  • Know What “Other” Means – The vast majority of contractors use QuickBooks.  When categories and subcategories are created it’s not unusual to view a P/L Statement and notice a subcategory, that you did not create, called “other”.  What that means is the person entering the data put the information in the main header category rather than one of the subcategories.  When that happens QuickBooks automatically creates a new subcategory called “other” and sticks it in there.  If that happens, simply double click “other” on your P/L Statement and it will bring up the detail and allow you to reclassify it into the correct category or subcategory.
  • Develop a Budget – Once you have a years’ worth of detailed data in your accounting system it’s time to create a budget for the coming year.  To my knowledge, every accounting system (large or small) has a place the owner can create a budget, by month.  QuickBooks has one by clicking Company/Planning and Budgeting/Set Up Budgets.  Since you already have all the proper categories developed within your system creating next year’s budget is pretty straightforward.

To create a budget simply review the past twelve months actual income and expenses and ask yourself one simple question.  “Will this income or expense go up, down or stay the same next year?”  A second question is “When do you expect to pay it, what month or months”?  Placing income and expenses in the proper months begins the process of creating the cash flow part of your budget.

  • Review Budget vs. Actual Each Month – Creating a budget is of little value if you don’t use it.  It’s kind of like buying a brand-new car but never taking it out of the garage.  You feel great because you own it but it has no practical value.  Each month review your Budget vs. Actual Report.  The objective is to find out how close your actual figures are to your budgeted figures.  Note any significant differences asking yourself why it’s different and what, if anything, you can do about it.  You are now beginning the process of managing your business.  Keep in mind that the ultimate goal of budgeting to develop proper pricing by department.  Having accurate cost information is the foundation stone for setting profitable hourly rates.

Next month we are going to look at breaking materials out by department and budgeting your salary.  We will also discuss a couple things that never show up in a standard P/L Statement but have the potential of putting you out of business.  Lastly, we will discuss finding the “right” accountant to review your numbers with each month.

Mistakes and Solutions

By Dave Ramsey

Being a leader is a lot like writing a novel. Everyone thinks they can do it, but few do it well. Fortunately, leadership is a skill that can be learned. And the most common way to learn and gain that necessary experience is by making big, whopping mistakes. Earning a Ph.D. in mess-uppery is an essential part of your business education.

Many of the lessons I teach are culled from mistakes. We made a mistake, that mistake caused us pain, and we vowed to never make that mistake again. Believe me, mistakes are painful in the business world. Learning from them is crucial to winning.

Less painful is learning from the mistakes of others. With that spirit in mind, let’s look at a few of the most common leadership mistakes and problems, along with solutions for fixing them.

Fear of failure
A small amount of fear is a healthy thing. It motivates you to leave the cave, kill something, and bring it home. But when it paralyzes you, it’s a huge problem.

The solution: First, recognize that you are fearful and your concerns may be well-founded. A bad decision could cause you to be sued, or lose money, customers, and team members. But you can’t let that possibility control you. The best way to kick fear right where it hurts is to come up with a system to deal with it. Setting deadlines, gathering facts and options, and working out the worst-case scenario are just a few examples of steps you can take to get over your fear.

Get it right, not right now
One of the biggest mistakes business owners make is hiring too quickly. Often, they’re desperate because they need someone, but quick hires usually do nothing but create more problems down the road.

The solution: Take the time to find the perfect person for the job. Get the right people on the bus. At my office, people are run through the gauntlet before they’re hired. This includes at least four interviews, a personality test, and a meet-the-spouse session. The result of all that scrutiny is a company full of rock stars, and an incredibly low turnover rate.

The “nobody does it better” syndrome
Yes, I know. It’s your baby, and no one can treat it as well as you. But micromanaged employees are unhappy employees. They will often leave, simply because they don’t want to endure the constant, intense scrutiny. In order for your team members to grow and become stronger, you have to let go.

The solution: Step back and let your team fly, no matter how nervous it makes you. Trust them! You were impressed by these people, and you hired them for a reason. Stop micromanaging, and allow them to perform to their full potential.

There is an exception to this rule, however. When someone first joins my team, they are heavily micromanaged until they prove their competency and integrity. I call this “training.”

The mistakes above are just a few of the most common. But there are many, many more you’ll discover on your own. Just remember to learn from your miscues, and never let mistakes hold you back. George Bernard Shaw once said, “A life spent making mistakes is not only more honorable, but more useful than a life spent doing nothing.”

Do You Want To Work At Chick-Fil-A?

By Tom Grandy 

You are a tech making $15-$30/hour so you would never consider working at Chick-Fil-A for $10.00 or less per hour, but that’s not my point. Lots of teens and retired people go to work for Chick-Fil-A because it’s a great environment to work in. The franchise goes to great lengths to screen, hire, and train their employees. Seldom will you be greeted with a poor attitude.  When you say thank you they say, “It’s my pleasure!”. Employees get along with each other and are always looking for ways to help out their team members.  It’s a clean environment that offers a quality product. Employees really enjoy working there. When customers go to Chick-Fil-A they know they are going to be treated with respect when they walk through the door.  Is the product better than anyone else’s?

The difference is not the product, it’s the people. The next time you pull through a drive-through window ask yourself these questions.  Did you understand the person on the order microphone?  Did they smile when they handed you the order?  Were you treated with respect? Did you have a warm fuzzy feeling when you drove off?

What’s my point? The point is that you are the company from the standpoint of the customer.  A smile, a friendly word, and being treated with respect are all things the customer appreciates. It’s the kind of thing that makes them come back again and again. You may never work at a Chick-Fil-A but there is a lot to learn from them that can help you become a better tech.

The acid test is always the same. Would you want to be treated the way you just treated your customer?  It’s something to think about.

The Common Denominators

By Dave Ramsey

Building a team of hard-working, creative, go-getters seems like a distant dream for some small business owners. Sometimes, even trying to get someone to close the office and lock up properly at night can seem like a pipe dream. The good news, though, is it doesn’t have to be this way.

Inspiring a team to follow you and do their absolute best is often not about money or control. It’s about quality leadership. With that in mind, here are some guiding principles I believe world-class leaders live by.

Make your vision known early and often
If you work for something bigger than yourself, you play harder and smarter. The same will hold true for your team. Most people will work harder (and better) when what they do is infused with a sense of purpose.

Tell your team what they’re working for and why. You can start with something as simple as a short email. Keep it short, insightful, and from the heart.

Praise and recognition
Let your team members know it when they’re doing a good job. Sincere and specific compliments are unusual in most workplace environments today, and this will set you apart. Or, take a few minutes and write a personal note. These simple gestures can create magic!

Surround yourself with greatness
It doesn’t matter if you are trying to fill a minimum-wage job, or selecting a new leader for your company. Hold out for the perfect person. Having the right people in the right positions allows you to do your best work. Take plenty of time during the hiring process, and set your standards high.

No power trips
A boss has an iron grip on his team, expecting every employee to immediately jump at his command. Disobey, and you could be gone in an instant. A leader, however, realizes the only power they can use is persuasion.

Don’t boss people around. Instead, explain why you do what you do, and treat your team like the co-workers they are. You wouldn’t be anywhere without them!

Caring and respect
Your team members are not robots or faceless units of production. Every single one deserves to be treated with dignity, respect, and a caring heart. If you love your team well, and treat them like family, and they will act like family.

There is one simple rule we apply to everything we do at my company, and it’s something you can start using today — treat others the way you would like to be treated.

The key to becoming a great leader is serving your team, and everyone around you, by putting them first. If you do, you’ll be paid back in full with loyalty, hard work, and amazing results!

The First Minute Is Critical – Do It Right

By Tom Grandy 

First impressions are more important than most technicians realize.  It is so critical that their greeting should be scripted and taped to their clipboard as a reminder.

Below are some steps:

1.      Ring doorbell once – Listen closely to make sure the bell is working.  If you can hear the doorbell OUTSIDE your customer can usually hear it INSIDE!  Don’t irritate the customer by ringing the bell again and again as they are desperately running for the front door!

2.      Step back three feet –  Don’t crowd the door.  Security is a huge issue especially for women.  Step back so the customer feels comfortable opening the door.

3.      Your helper should be visible – If you have helper with you, be sure they are at the front door as well.  The helper should be one step behind the lead tech or one step down if there are steps.

4.      Look your customer in the eye and SMILE! – I’ll bet you get a warm fuzzy feeling when someone smiles at you.  Your customer does too.

5.      Introduce yourself – “Hello, Mrs. _______. I’m (your full name) with (company name). Hand the customer your personal company business card. This is (co-worker’s full name) and he (or she) will be helping me today.”

6.      Helper says – “Hello, Mrs. _________.”

7.      Hand the customer a company brochure and/or a copy of your maintenance agreement –Tell the customer the company brochure will provide an overview of the company and a listing of their other services you may not be aware of.  The maintenance agreement will provide details on how you can save money on today’s call.

If you follow this simple process on every call you will be amazed at how it puts the customer at ease.

What Have You Learned Over the Past Few Months?

by Tom Grandy

What have you learned over the past several months?  What do you know now that you didn’t know six months ago?  Take a deep breath, turn off your phone, close your eyes and think for a couple of minutes.  Now, grab a paper and pencil and write down half a dozen things that you did not know this time last year.  Is it a long list, short list, or is the paper still blank?

This is what I came up with:

  • Learn To Be Less Judgmental And More Compassionate – There are few things more sobering than being in the hospital for six weeks without the assurance that you will live or die.  I’m fine now, thanks to the Lord and a lot of prayers from a lot of people.  However, I’ve learned more fully the value of relationships and how to be more compassionate, less judgmental, for those that are in similar positions.  The stay in the hospital with weeks of recovery afterwards taught me that.
  • Pay It Forward – My wife and I were recently with a close friend who shared how she had invested significant amounts of time and money into someone else.  That other person wanted to pay our friend back but her comment was “Don’t pay me back, pay it forward”.  The meaning was clear.  Take what you have been given and pass it onto someone else when you have the opportunity.  Great life lesson.
  • No One Can Make YOU Change –  I was listening to an old Zig Ziglar presentation and he was talking about setting and reaching goals.  He was in his 40’s at the time and overweight by nearly forty pounds.  Many people, including his doctor, told him he had to lose weight but it never happened.  He shared, in a most entertaining way that only Zig Ziglar can on how “he” had to make the decision to lose weight.  Until he decided to set a goal and work towards that goal it wasn’t going to happen.  Life lesson – we are the only ones that can make us change.  It’s our responsibility and no one else’s.
  • Abandon A Quarrel Before It Begins – This is a proverb that I have read many times but it wasn’t until I read a book that it hit home.  The book was about King Solomon and the proverbs he wrote in the Bible.  If you take a good look at what causes most quarrels it’s when we are trying to convince someone else that we are right.  Before long both parties are upset and there are no winners.  There are times we need to stand our ground but much of the time the quarrel was worthless.  I’ve found abandoning a quarrel before it begins is a wise thing to do and it preserves relationships.

The items mentioned above were learned by observing others, reading books, and listening to audio presentations.  There is little learned living in a vacuum.  We all live busy lives and if you are a company owner busy is an understatement.  However, there is a lot of value in reading, listening, and simply paying attention to the world around you.  If you’re interested in growing and changing then take time to expose yourself to what others have learned.  It might just change your life.

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