Grandy

Recruitment

By Nancy O’Hare Zika

Recruitment … it is at the forefront of every person’s mind in the PHCE industry, and for very good reason.  This is a real problem!  We are currently looking at a 340,000 position shortage of tradespeople in the US, and with 60% of the current workforce retiring in the next ten years, that number could very well rise to 1.1 million.  So, as business owners, what do we do? Honestly, you have two viable options: grow your own or hire existing technicians from the competition.  To be successful at either one requires you to be the employer of choice in your area.  Seems simple… right??   There are a number of ways to become the “Employer of Choice” in your area.  It starts with making it known to the outside world why they should come and work for you.  For someone on the outside looking in, the culture of your company is virtually invisible.  When you’re working within (or “inside”) your own business, it seems like everyone should know what a great company you have… But they don’t.   Recognize this and figure out a way to make it known!  The best way is through effective marketing.  Believe it or not, there is actually a way to “market” your company that will both increase your customer base and also have potential technicians flocking to your door.

You need to tell your story. By doing so, you will make an emotional connection with the potential technicians of your area.  This needs to be done honestly and openly.  As much as we think we are in the plumbing business, or the heating business…we are really in the PEOPLE business.  Be sure you understand the difference.

I am fortunate to have the opportunity to travel around the country visiting PHCE companies, and there is definitely one sentiment that I routinely hear from company owners and management…”We have too much competition in the area.. there are just not enough technicians!”  But… perhaps it’s all about perspective.   You have 15 companies in your service area?? Well, I view that as 15 companies that are currently employing your future technicians.

A quick story:  In 1935 a US shoe company was looking to expand its business overseas.  They sent two of their top sales guys to different areas within this new region.  The owner of the shoe company told both of the salesmen to send word back once they were settled in the new uncharted territory as to how many pairs of shoes they needed shipped over.  A week went by and finally word came from Salesman #1.  He wrote: Disappointing news.  Do not send any.  No one wears shoes here!  The ownership was discouraged and decided they should contact Salesman #2 to tell him to pack up and head home, but before they could get in touch, they received the following message from him:  GREAT NEWS!  Send me as many as possible!  NO ONE WEARS SHOES HERE!

It’s all about perspective.  Be sure that you are effectively marketing your company as THE company of choice in your area- then watch both your customer base and your talent base GROW!

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Nancy O’Hare-Zika is the co-owner of Swick Media Services, a Michigan based media company that focuses on the marketing needs of companies in the PHCE industry. You can find more information from Nancy O’Hare-Zika at: www.SwickMediaServices.com.

When It Comes To Leadership, Appearance Is Important

By Tom Grandy 

A study was recently conducted at a busy intersection of a major city.  A man, we’ll call him John, was dressed in dirty jeans, hair uncombed, unshaven and his shirt tails were hanging out.  John was placed at a busy intersection in front of dozens of unaware bystanders and instructed to walk across the intersection when the light was still green but there were no vehicles in sight.

The moment arrived and John walked across the intersection alone no one followed.

Fast forward a day or two.  John is on the same corner with the same instructions.  However, this time John had shaved, showered, and is dressed in a really sharp suit and tie with shoes polished.  The light is green with no cars in sight.  John steps off the curb and heads across the street.  One other thing happened.  The dozen or so people behind him also stepped off the curb and followed him across the street!

What’s the point?  When it comes to providing leadership appearance does make a difference.  Now I am not promoting a suit and tie wardrobe for technicians but I am strongly suggesting that appearance does make a difference when it comes to leadership.  It makes a difference in the eyes of the customer.  It makes a difference in the eyes of your manager and it sets the technician apart from the other technicians.

A customer’s assessment of a job well done is not simply based on technical expertise in term of fixing a problem.  Neatly dressed, polite technicians make a statement to the customer as well.  Let’s face it.  If two technicians arrived at your house, each with similar technical expertise, and one was clean shaven with a clean uniform on and the other was un kept in a dirty uniform (if he even had a uniform on) which one would give you a warm fuzzy feeling?  Now some are thinking “But Tom, that’s not fair.”  Well I agree, but it’s the impression left with the customer that counts!

Set a Goal and Measure Your Progress

By Tom Grandy 

If you want to get better at what you do, then set specific goals and measure your progress against that goal on a weekly or monthly basis.  It’s a simple process but few of us practice it.

Most technicians wish to advance and earn more money. If that is your goal, don’t depend on your supervisor to set goals for you, set your own.  Believe me, if your sales and/or productivity substantially increases you will be noticed (and rewarded) by management.

Tracking your daily, weekly, or monthly sales can be fun.  Set goals to reduce the number of callbacks you have.  See what percentage of time you collect money at the conclusion of a service call or installation job.  If your daily sales are increasing, the number of callbacks you have are falling and you are physically bringing money back to the office…I promise you, management will notice.

I fully realize some managers may not seem to care about those things.  If that happens to be your situation…do it anyway, for these three reasons:

  1. It provides a wonderful feeling of personal accomplishment.
  2. When it comes time for your annual review you will be armed with information to back up your request for a raise.
  3. Should you find the need to change employers, setting goals and tracking your progress on a regular basis will demonstrate your initiative.

Your future growth and value to the company really does depend on YOU!  Be a self-starter.

What Did You Learn Last Year?

by Tom Grandy

Most of us have heard, “Do you have thirty years’ experience or one year of experience repeated thirty times?”  The other one we have heard is, “The definition of insanity is ‘Doing the same thing over and over again while expecting different results!'”  The point is the same in either case.  Are we learning and changing?

As the new year begins, it’s important to reflect on our victories as well as our failures.  What did the company do really well over the past year, and just as importantly, what area produced weak performance?  My suggestion would be to have a company meeting to discuss this very topic with the objective of setting specific goals for the coming twelve months.  Below are a few topics you just might want to include on your discussion list:

  • Turnover – How many employees (techs or staff) left the company over the past year?  If the number is high, the question becomes why?  Sure, they may have been a poor fit but the larger question is to look at your hiring practices.  How do you interview and utilize DISC testing?  Are there core issues with how you treat employees?  Yes, they may have done a poor job, but , take a good look at your new employee orientation program and training process.  I heard a great quote a while back, “Seldom is the problem in front of you the real issue. There is usually a foundational problem behind the issue.”  Having an open and honest discussion with all employees on this topic can be very telling.  If you are an owner or manager, remember being critical or defensive of comments being made will cause the room to suddenly become very quiet.  Swallow your pride to accomplish the larger objective of getting better.
  • Gain/Loss of Maintenance Agreement Customers – Maintenance agreements are literally the foundation stone for profitable growth.  The final selling price for most trades companies is usually heavily dependent on the number of active maintenance agreements the company has.  Keep accurate records of the number of maintenance agreement customers gained and lost during the past year.  Compare total active maintenance agreement customers at the end of the year with each previous year.  Is the number growing?  If not, why?
  • Did the Company Make a Net Profit in All Departments? – This can be an elusive number for a couple different reasons.  The first, is cash flow verses accounting.  As most are aware, it’s not unusual to see an accounting P/L statement that says you made a profit (which you will have to pay taxes on) while noting there is far less money in the company checkbook.   Be sure to look at net profit from both perspectives.
  • The other issue is departmentalization – Few companies departmentalize all the way through sales, overhead, labor and materials, but look only at the overall company’s net profit.  The potential problem is–one department can easily be subsidizing another one and no one knows it…until it’s too late!  Review your net profit by department and compare this year with past years.  Are profits increasing or decreasing and why?
  • Debt Status – This can be an eye opener.  Simply list all outstanding debt including balances owed on loans, unpaid credit card balances, overdue money owed to suppliers, personal loans to the company, balances on your lines of credit, and overdue taxes.  Totaling these dollars can be a wakeup call.  The objective is to have the “total owed” figure substantially DECREASING each year.  Hint:  Build debt repayment into your overhead cost when setting proper hourly rates. If you don’t, all that net profit you made will quickly be swallowed up by debt repayment.
  • Closing Rate on Sales Presentations – An acceptable closing rate for sales presentations is at least 50% or more.  What is your rate per individual?  Is it going up or down year-to-year?  If the closing percentage is not increasing, you need to know why.  Do some or all sales people and/or selling technicians need some additional formal training?  Reviewing these percentages, at least annually (monthly or quarterly is better), can keep the sales team on track.
  • Total Dollars Tied Up in Inventory – How many dollars does the company have tied up in inventory?  If the dollar figure is going up it might be because the company is growing therefore additional inventory is needed.  It may be caused by your sloppy purchasing policy.  Do yourself a favor and at least look at the number and ask the question.
  • How Often Do You Meet with Your CPA? – This topic was purposely brought up last.  It’s hard to manage the company without taking a close look at the numbers.  All the above topics are important but the bottom line is what is really important.  Did the company make a profit this past month?  It does little good to find out you had a rotten year three months after the close of the year.  Company owners need to know how they did financially within 10 days of closing out each month.  Make it a habit (not a goal) to sit down with your CPA by the 10th of each month to review your numbers.  If they are not providing “practical” advice on how to improve your bottom line profit, it’s time to find a new CPA!

Before you set this article down pick up your calendar and select a date for your annual company meeting to discuss at least some of the above items.  Make it fun.  Select a really nice restaurant so you not only review progress but provide a big thank you to those that helped the company grow and prosper.  Everyone wants and needs to be appreciated.

Improve Your Business AND Yourself in 2018 (1)

by Dave Ramsey

Have you noticed there are some business owners who just seem to get it right every time? It seems like anything they touch turns to gold. How do they do it? What’s that magic formula that finds them so blessed, while many other entrepreneurs continue to struggle?

For most successful people, it’s as simple as this: They have a plan. They write down their goals, and stick to them. Goals force practical steps into your life that help make your dreams come true.

If you haven’t tackled your business goals for the new year, here are some ideas to help you get started. Remember, they’re only suggestions. For your goals to truly work, they must be yours.

1. Get your finances in order
Want to know the number-one reason small businesses fail? Poor accounting. If you don’t keep up with it, you’ll sink like the Titanic.

But that’s just the start. You can’t rely solely on a profit-and-loss statement to see what’s happening with your business. You need a realistic budget that forces you to address the present while planning for the future.

2. Commit to a better hiring process
The main reason small business owners hire the wrong people is they move too quickly. They’re afraid the work won’t get done until the position is filled. While there’s some truth to this, you should also know it takes more time to quickly hire three people who don’t work out than it does to find that one good person who’s perfect for the job.

Commit to slowing down your hiring process. Invest more time and thought in the interview process, and don’t make an offer until you find the right person — no matter how long it takes. At my company, each new hire has gone through five or six interviews.

Remember, you don’t want someone who is just looking for a J-O-B. You want someone who is passionate about the position and your mission.

3. Find a mentor or coach
What’s the one trait that almost all successful entrepreneurs have in common? They have a wise and experienced mentor who shows them the ropes and holds them accountable.

Find good people who are doing things with excellence, who are having the kind of success you envision having one day, and learn from them. You don’t have to stick to just one. You can have a different mentor for every area of your life.

4. Get healthy
Have you ever noticed you don’t have a lot of fight or enthusiasm in you when you’re tired? In business, there’s always going to be a battle, so take care of yourself! Get in shape, eat healthy foods, and get plenty of rest. Give your mind and body what they need, so you can fight another day.

So, what are you waiting for? Write down those goals and get started. Goodbye, stress. Hello, prosperity!

How Long Can Your Company Survive Without Income?

by Tom Grandy

The vast majority of workers in the United States live from paycheck to paycheck.  If they lost their job it would have serious consequences in terms of meeting their monthly obligations.  Many of us remember 2008 when the economic world came to a screeching halt.  Seemingly overnight the economy took a nose dive and many businesses went bankrupt within months.  I believe it was AT&T but the situation was not limited to their company.  Credit was tight and the statement came out something like this:  “How are we going to make payroll since we can’t borrow money?”  I was shocked!  I was reading about one of the top companies in the country that was going to be in a financial mess because they could not borrow money to make payroll.  Some of the greatest minds in the business world worked for this company, and many others like it, and yet they did not have the common sense to build up cash for a rainy day fund …just in case!  Amazing.

Poor financial management, which includes preparing for the future, is not limited to the big companies.   Small businesses everywhere are very similar to the majority of US workers…they live from week to week when it comes to paying their bills.  Most reading this article are in the trades industry.  Our industry is notorious for it seasonality.  Weather dramatically affects sales for most of the industry.  It’s been that way forever and it’s not likely to change.  However, what can and should change is how we prepare for the slow seasons.

Many reading this article are Dave Ramsey fans.  If you have listened to Dave for very long you will remember his mentioning (as the initial step towards financial freedom) the creation of an Emergency Fund.   The long term objective is to have an Emergency Fund that will cover 3-6 months of income…just in case.  Guess what?  The same principle applies to our businesses.  We need an Emergency Fund as well.

How Much Is Enough?

To answer that question let’s use an example.  Let’s assume our small business grosses $600,000 per year or an average of $50,000/month.  The monthly fixed overhead (overhead dollars that must go out each month to stay afloat) is let’s say $12,000.  Adding in salaries of the “key” overhead people (ones that you really want to keep on the payroll at all costs) will increase the number to perhaps $22,000/month.

Utilizing Dave Ramsey’s parameters of wanting a 3-6 month Emergency Fund would mean the company needs to have savings of $66,000 to $132,000 to be on the safe side.  “Wow, Tom that is a lot of money!”  It sure is.  It is unlikely the company will go 3-6 months with NO income so perhaps a more realistic range would be $40,000 to $80,000 in the bank as an Emergency Fund.   Now some of you may be thinking, like AT&T, I will simply draw from my line of credit should the need arise.  In 2008 that “assumed resource” disappeared.  Better to be safe than sorry.

How Do We Generate Cash for the Emergency Fund?

The principle is pretty straightforward.  If your rent, insurance, or wages go up, how do they get covered?  You increase you pricing to the customer.  If you want to create an Emergency Fund of $60,000 then the $60,000 needs to become part of your budget, therefore, part of your pricing.  If you were a service company with three techs that means you would produce roughly 3,000 billed hours per year.  The hourly rate needs to increase by $20/hour ($60,000 / 3,000 billed hours = $20.00/hour).  If your objective were to create the fund over two years then the rate will only need to go up $10/hour.  This happens AFTER the Emergency Fund is fully funded.  At this point DO NOT CHANGE YOUR HOURLY RATE.  The money that was being used to create the fund just became additional profit!

Wouldn’t you sleep better at night knowing you had a fully funded Emergency Fund sitting in the bank, just in case?