Lori Stuckert

Showing Thankfulness Creates a Family Atmosphere

By Tom Grandy, Founder of Grandy & Associates

Thanksgiving is a time to gather, fellowship and think about the many blessings we have all experienced.  Shared blessings tend to build and strengthen family relationships.  The same principles apply to our businesses.  Showing your employees that you appreciate them is a great way to create a culture of thankfulness and family.

Think about the last time you thanked an employee for a job well done.  A verbal thank you is helpful and encouraging, but a physical thank you will be remembered for a very long time.  Everyone wants to be recognized as having done a good job.  Below are a few practical suggestions you might want to consider.

  • Drop by the job site – Every once in a while, randomly drop by a job site and drop off doughnuts or coffee. Thank the crew for having done a great job.
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  • Lunch at the office – Consider providing free lunch at the office every once in a while. It can include the techs or not.
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  •  Gift Cards – Place a $10 Starbucks card in the employee’s paycheck with a sticky note that says, “Thanks for doing a great job.” Any kind of gift card will do.
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  •  Summer Picnic or Ball Game Tickets – Maybe once a year sponsor an event for the entire company. Picnics are fun or perhaps take everyone to a ball game or local event.
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  •  Gift Card/Letter for Exceptional Service – When a tech is called out at night for a repair, show your appreciation. Send a note to the spouse telling them what a great job John did the other night a 2:00 AM.  Emphasize your appreciation for John’s work ethic and include a gift card for a local restaurant.
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  •  Sticky Note – “Catch” an employee doing something over and above board. Place a handwritten sticky note where they will see it saying something like “Thanks for sweeping the back area, for cleaning up the shop, or perhaps for helping Bill or William yesterday.”  You are appreciated.
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  •  Paid Time Off – When a technician has worked a lot of overtime you may want to consider allowing the tech to take a “FREE” day off with pay. Let them pick the day!
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  •  Take an Employee to Lunch or Breakfast – This is a great way to say thank you, build relationships, and find out a bit more about their life.
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  •  Gift Certificate for an Employee’s Child Excelling – If you find out one of your employee’s children has excelled in a sport, or academically, send the family a note congratulating them along with a gift card to a local restaurant.
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  •  Employee Recognition – Everyone likes to be recognized as having done a great job, especially in front of their peers. Perhaps during a weekly service meeting have John explain to the group how well he handled a customer complaint, trouble shot a tough job, or was able to encourage a customer to upgrade their equipment.

 

Make it a point to intentionally thank one of more of your employees each week.  You may even want to put a note on your desk or a reminder in your phone.  Appreciating employees (office and field) in a physical way will be remembered for a long time.  Make it part of your company culture.

Do you have aging parents that you are responsible for?  If so, now is the time to record information like; Do they have a will?  Where is it?  Are the vehicles paid off and where are the titles?  What banks or investment companies do they work with?  One day you will need all this information and more to close out their estate.

Great news!  There is a manual called What’s Where When You’re Gone? that records everything you need to know.  The manual also includes a PDF to fill in online if you prefer. The normal investment is $27.00 but as this month’s Website Special it’s only $24.00.  Enter What3 in the coupon code area for the discount.  Order today!

Hostility in the Workplace

By Ken Coleman, Ramsey Solutions

Did you know we spend a third of our lives at work? Our careers have a huge impact on our overall well-being and life satisfaction. So, if you’re experiencing a hostile work environment or being bullied at work, you owe it to yourself and those around you to take immediate action to put yourself, and your co-workers, in a better, safer place.

Bullies in the workplace can be anyone—coworkers, supervisors, contractors, clients—who behaves in offensive or aggressive ways. The common theme is the offender’s pattern of treating others with unwanted behaviors or disrespect over time. You’re always going to come face-to-face with other people’s annoying quirks and habits, but someone’s annoying laugh or need to have a certain kind of pen aren’t exactly hostile behavior.

A hostile work environment is a workplace where harassment, discrimination and/or abuse hamper an employee’s job performance or create an offensive or intimidating environment. These words or actions aren’t just single, misplaced instances. It’s when someone’s repeated bullying creates an environment of hostility over time, and prevents the individual—or the team—from feeling respected and safe.

Some examples of illegal workplace harassment include:

  • Making verbal or physical threats
  • Giving unwanted romantic or sexual attention
  • Sharing content or images that are inappropriate for a workplace setting
  • Calling people rude names
  • Repeating inappropriate jokes that discriminate against someone’s age, gender, religion, race, sexual orientation or nationality

In addition, a hostile work environment affects more than just the person being targeted. This behavior creates a toxic situation that causes discomfort and distraction for others who see or hear it. 

If you or a coworker experience workplace harassment, the first step to end the bullying is to ask them to stop the behavior that’s making you uncomfortable. If you feel intimidated by the person in question, go directly to your supervisor, or the company’s human resources department.

After you report hostile behavior or discrimination, it’s the employer’s responsibility to address the problem and make sure it’s resolved quickly.

If you dread going to work because your employer isn’t willing or able to stop harassment, organizations like the Equal Employment Opportunity Commission (EEOC) can step in. But remember, reporting a claim to the EEOC is serious business—one where the burden of proof falls on the victim. You must prove the discrimination is unwelcome, severe and stands between you and success in your career. 

Ken Coleman is the nationally syndicated radio host of The Ken Coleman Show and #1 national best-selling author. He has been featured in Forbes, appeared on Fox News, Fox Business Network, and the Rachel Ray Show. Since 2014, he has served at Ramsey Solutions, where he offers expert advice to help thousands of people every day discover what they were meant to do and how to land their dream job.

Do You Know What You Do Not Know?

By Tom Grandy, Founder of Grandy & Associates

Have you ever found yourself in a conversation with other contractors only to discover that you are totally clueless in terms of what they are talking about?  That is NOT an indication that you are ignorant in any way, it’s simply an area that you are unfamiliar with.  Bottom line, we often don’t know what we don’t know.

Having reflected on 35+ years of working with contractors I have discovered six general areas where many contactors simply don’t know what they don’t know.  For this article we are doing to take a bird’s eye view of those six areas.  If any are unfamiliar to you, I would urge you to research the topic a bit.  Why?  It will affect your overall profitability.

  • Labor Pricing needs to be calculated based on Cash Flow Dollars, NOT Accounting Dollars

There are huge differences between cash flow and accounting.  The bottom line is that cash flow deals with the real dollars that flow into and out of a company, while accounting tends to work with paper dollars.  One simple example are loan payments.  If the loan payment is $500/month and $100 is interest and $400 is principle only the $100 appears on the P/L Statement as an expense however, in reality, $500 actual cash flow dollars flowed out of the company.

  • Failure to build debt into your company’s Labor Rate is a formula for disaster

Since most trades companies start out with little to no cash debt it tends to accumulate rather quickly.  Debt can take many forms such as unpaid taxes, loans, lines of credit, not paying suppliers on time, or simply the $20,000 that was borrowed from Uncle Bill to start the company.  None of the dollars that flow out of the company in terms of debt repayment show up in the P/L Statement as an expense!  Again, from a cash flow standpoint those debt repayment dollars actually flowed out of the company but did not show up in the P/L as an expense.

However, when it comes to setting proper hourly rates, all dollars flowing out for debt repayment need to included in the company’s overhead so it is part of the hourly rate. 

Let’s assume the company made a profit of $8,000 for the month and debt repayment totaled $12,000 but was not included in the hourly rate.  That means, from a cash flow perspective, the company actually lost $4,000.  Wow!

  • Growth does not necessarily equal increased profit

The most misunderstood word within the trades industry is growth.  Why?  Most company owners see a direct relationship between growth and profitability.  If we do more work we make more money, right?  Maybe.  When the company grows so do expenses.  There are three points of growth that can literally put a company out of business.  First is when the owner moves from the field into the office.  The owner transitioned from being productive labor (bringing in money) to becoming an expense (salary).

The second point of growth is when gross sales reach $750,000 to $1,200,000 or roughly a million dollars a year.  This is the point where the company is being forced to make significant investments in order to “prepare” to move to the next level but doesn’t yet have the sales to support it yet. Bottom line, about 70% of all contractors that reach $1,000,0000 in gross sales for the first time lose money!

Lastly, growing more than roughly 15% per year will not cause gentle cash flow problems…it will create serious cash flow problems.

  • Departmentalization is critical (each department needs its own unique hourly rate)

Every department has different overhead, different labor hours, and different markup on parts and/or equipment.  That means each department MUST have its own unique hourly rate.  Ninety-five percent or more, of trades company do not break their company out by departments.  The result is predictable.  One department ends up subsidizing another department and no one knows it…until it is too late. 

  • All residential service needs to be priced based on Flat Rate Pricing

Flat rate pricing has two huge benefits.  First of all, the customer never sees you hourly rate or parts cost of markup.  They are only shown the final price before the work is done.

The second huge benefit is when a company’s hourly rate needs to be increased.  The rate is simply changed inside the system, new books are printed, or tablets updated, and no one even knows the price changed.

  • The fear factor of raising the company’s hourly rate is on the part company…NOT the customer

Today’s customer is looking for three things.  First, quality work.  Secondly, do what you said you were going to do, and thirdly do it when you said you were going to do it.  Translated, show up on time.  If these three things are routinely done, price won’t even be on the customers top ten list of considerations.

If any of the above six terms make you think, “Gee, I never thought about that!” then do a little research and explore the topic.

Do all your employees know the company rules and regulations?  If not, take advantage of this month’s Website Special.  Our 96-page Company Policy Manual covers everything from working hours to drug testing.  The normal investment is $134.00 but this month it’s only $97.  Enter coupon code: Policy37 at checkout.  Order today

The Right Questions to Ask When Negotiating a Deal

By Glen Herman, Creative Business Services

When it comes time to negotiate the terms of a business purchase, asking the right questions can help the deal progress more smoothly. You can always expect that there will be many negotiations between buyers and sellers. So, when issues come up, good negotiating skills are necessary. When you know the right questions to ask, you will help to keep the deal on track.

May I Have Professional Representation?

Trying to negotiate a business deal on your own is rife with pitfalls. There are seemingly endless details to consider. When deeply emotionally and financially invested, it is easy to overlook details accidentally. You may react to any snag in the transaction more sharply than necessary and create tension with the other party.

Having an M&A advisor at the negotiating table with your best interests at heart can make the process go much more smoothly. An M&A advisor not only has a more neutral perspective but also understands the complex factors involved because they have negotiated so many deals. They also understand both sides of any issues that might arise. As a result, they will already have a way to smooth over any differences to the satisfaction of both parties.

How Can We All Get on the Same Page?

For a business negotiation to progress smoothly, everyone must be on the same page. Otherwise, the deal is doomed to fail before it begins. A good M&A advisor will ensure everybody is clear about each other’s expectations and goals.

It is important to keep an open mind throughout the process and be willing to listen without jumping to any conclusions. A M&A advisor knows how to present ideas and offers in a way that will appeal to both parties and keep everybody talking amicably so the transaction can continue.

How About We Split the Difference?

There is usually at least one number that comes up that not everyone can agree on. Asking to split the difference shows you are flexible and eager to keep the deal progressing. This is a common negotiating tactic that can be under-utilized when tension builds.

This is a time when having an experienced M&A advisor who understands how to get everybody talking again can be tremendously beneficial. Your M&A advisor is protecting your interests but also understands the other party’s goals. When one side makes an offer to help bring everybody to the middle, this gesture of good faith goes a long way towards ensuring the deal gets done.

Experienced M&A advisor knows the right questions to ask and plans to smooth out any bumps in the negotiation process. Their involvement will ensure a more streamlined transaction because they have the experience and knowledge necessary to make sure the entire business sale process completes successfully to the satisfaction of everyone involved.

Glen Herman is Business Intermediary of Creative Business Services/CBS-Global in Green Bay, WI.  Call us to 920-432-1166. All your inquiries are strictly confidential. 

Check out the The Next Chapter Webinar Series with Glen and Bill Kinnard HERE.

Some Things Never Seem to Change

By Tom Grandy, Founder Grandy & Associates

Grandy & Associates has been teaching trades contractors how to set profitable hourly rates since its inception in 1987.  We are not alone.  Other companies have been teaching profitable labor pricing as well.  The irony is that after all that teaching the leading cause of business failure is STILL improper labor pricing.  Have some companies learned and moved on to profitable growth?  Of course they have. However, as an industry, we are no closer to overcoming this problem than we were 35+ years ago.

Many companies really have invested time, energy and money in setting proper and profitable hours rates…initially.  But many fail to adjust those rates as things change within the company.

Every change in your company cost of doing business will necessitate a change in your hourly rate in order to maintain profitability!

Grandy & Associates has multiple resources to help contractors set profitable hourly rates.  However, the objective of this article is not to teach the process of setting profitable hourly rates.  The objective of this article is to help the reader understand the need to adjust rates as time goes on.

To be able to illustrate the point we are going to need a simple Sample Company.  Let’s assume our Sample Company is 100% residential service and has three service technicians.  Each service tech bills out roughly half their time or 1,000 billable hours a year.  Let’s look at a few “What if’s”.

  • Techs are doing a great job and deserve a raise. The company desires to provide a $2.00/hour raise for each tech. 
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Question: 

How will that affect what the customer is charged?

The additional basic cost to the company is $12,480/year ($2.00/hour x 2,080 paid hours a year per tech times 3 techs = $12,480).  When the $12,480 is divided by the 3,000 billed hours a year that means the company will need to increase its hourly rate to the customer by $4.16/hour ($12,480/3,000 billed hours = $4.16/hour) just to maintain current profitability.

  • One of the service techs van just died. The company needs to purchase another one right away. 
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Question:

How will the new vehicle purchase affect the hourly rate?

Total cost with racks and wrapping the vehicle produced a loan payment of $550/month principal and interest.   That just added $6,600 in annual cost.  When the $6,600 is divided by the 3,000 billable hours the hourly rate will need to go up $2.20/hour.  That does not include the extra cost of insurance.

  • Good news! Health insurance for the three techs, owner and bookkeeper/CSR only went up $35/month each.
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Question:

How much will the “additional” cost of insurance affect the company’s hourly rate?

Five employees at an additional cost of $35/month will result in an increase in the cost of doing business of $2,100 ($35/month x 12 months x 5 employees = $2,100).  Dividing the $2,100 by the 3,000 billed hours will cause the hourly rate to be increased by $.70/hour.

None of the three additional costs are huge by themselves but literally every additional dollar spent on the cost of doing business will DECREASE the company’s net profit by the same amount.  If the three items above were simply adsorbed, the company’s net profit will decrease by $ 21,180 ($12,480 + $6,600 + $2,100 = $21,180).  For a simple three tech service company that is a lot of lost profit!

Now, think about ignoring minor increase year-after-year.  You don’t need to be a brain scientist to see the long-term effects on the company’s profitability.

In honor of Grandy & Associates 35 years in business the founder, Tom Grandy, has written a book entitled Profitable Labor Pricing for the Trades Industry.  It covers why companies fail, differences in cash flow and accounting, how growth can put a company out of business plus detailed worksheets on how to set profitable hourly rates.  The $19.45 investment includes shipping.  Order Today!

Secret Enemies of Productivity

By Dave Ramsey, Ramsey Solutions

You probably feel there are rarely enough hours in a day, no matter how hard you work, to get things done. But being distracted doesn’t necessarily mean keeping up with friends online, or spending hours watching cat videos. There are other forces at work, many of them business related, that can secretly keep you from being productive.

Issue: Email

It’s all too easy to fall down a rabbit hole when you see dozens of emails sitting in your inbox. But are all of them worth your time and attention? Could some of them be handled by someone else?

Answer: Choose two times during the day to read and reply to email, and put those times on your calendar. If you have an assistant, put them in charge of your email and instruct them to forward only what you need to see.

Issue: Meetings

Getting together for updates, to communicate priorities and to develop new projects is a necessary part of doing business. But meetings can quickly get out of hand. 

Answer: Set a time limit and create an agenda for your meeting. Stick to both. If an issue isn’t resolved in the allotted time, assign someone to work on it and report back by a certain date. Then, move on to the next thing on your calendar.

Issue: Multi-tasking

The ability to multi-task is generally viewed as a valuable skill in the workplace. But the hard, cold truth is few of us do it well. Our brains just can’t handle five things at once for an extended period. In the long run, you end up stressed out, less focused and less productive.

Answer: Start every morning by writing down your goals for the day. Prioritize them and stick to your list, focusing on one task at a time. If you get distracted, take care of the issue, and go back to your list.

Issue: Socializing

I love hanging out with my team. They’re a great bunch of people. But socializing is one of those things that can quickly get out of hand if you’re not careful.

Answer: If you’re naturally talkative, block out a few minutes on your calendar each day to socialize, and stick to the time limit. If you don’t like to chat it up, schedule time specifically to interact and be sociable. After all, spending time with your team is an integral part of being a leader.

Respect your time, and you’ll be amazed by how much more you can accomplish—and how profitable that can be!

* Leadership and small business expert Dave Ramsey is CEO of Ramsey Solutions. He has authored numerous best-selling books, including EntreLeadership. The Ramsey Show is heard by 18 million listeners each week on more than 600 radio stations and multiple digital platforms.

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