Lori Stuckert

Three Points of Growth (Part 2 of 3)

By Tom Grandy

Last month we talked about the first point of growth that has the potential of putting a company out of business, which was when the owner moves from the field into the office.  This month we are going to take a close look at the second point of growth that can put a company out of business which is when gross sales reach roughly a $1,000,000 per year.

The most difficult growth period for any small business is when gross sales are between $750,000 and $1,200,000 or roughly a million dollars a year.  By far, this is the roughest and toughest point of growth the company will ever experience.  When sales are nearing a million dollars a year lots of things are happening and they are all happening at the same time.  So, let’s begin with the owner.

The owner has generally been in the office, running the company, for several years as sales near a $1 million.  The comfort level of learning the business side of the business is getting better each day.  However, as the company nears a million in gross sales, something else is happening to the owner.  His hours are maxed out!  At this point, working 60-70 hours a week simply isn’t enough.  Help is needed.  Now that extra person may take the form of an office manager, field supervisor, or perhaps a salesperson.  The bottom line is clear.  If the company is going to get any larger, the owner needs help.  That extra person or persons, although totally needed, is going to dramatically increase the company’s overhead costs.

Something else is beginning to happen. QuickBooks alone isn’t working as well as it used to.  Increased sales have created the need for more information.  Let’s begin with customer history. 

QuickBooks provided a list of customers, which had been sufficient up to this point.  The owner knew most of the customers personally since he, or she, sold them the job and in many cases actually performed the installation or repair.  The owner “remembered” where the customer lived, what equipment they had and important facts concerning their lifestyle and pets.  However, as the company grows and approaches that critical million dollars in gross sales, there is a problem developing. The owner no longer knows all the customers personally.  The real need to record total customer history has now come front and center.  The company needs a customer base program that will record all the customers information so it’s available to the entire staff.  As the company grows it becomes necessary to record things like; brand and serial numbers of equipment, whether the customer has a maintenance agreement or not, what specific repairs have been performed, and when, and did they pay their bill on time.  These are just a few things that need to be kept track of and there are a lot more. The company now needs a full-blown customer base program and QuickBooks alone does not have it.

What began as a simple company that performed installation and service to a limited type of customer has now dramatically changed.  Now, the company is doing a variety of things. They are doing residential, commercial, and perhaps industrial work.  Each of these areas has installation and service.  The company has begun a maintenance agreement program and depending on the trade, may even have a retail store.  One of the potential dangers of growth is that one department can easily be subsidizing another and no one knows it, until it’s too late.  As the company nears that mystical million dollars a year the need to departmentalize the company’s P/L statement is becoming clear.  This can be done with class codes within QuickBooks but it’s not an easy process.  To accurately separate departments will likely require a more sophisticated accounting program.  Did I mention that will cost a bit more money?

When the company was small, inventory wasn’t a big deal.  The owner knew what was on hand and if he wasn’t sure, a short walk to the back of the building with a glance around the shop would quickly provide the needed information.  Now, however, the company has grown.  Now the need for a computerized inventory system is glaring.  What’s in stock?  What is the reorder point? Who is the preferred supplier?  With several service techs and a couple installation crews, parts and equipment are going out the door faster than the owner can count.  QuickBooks can’t provide that kind of information.  The company now needs a detailed inventory program.

Dispatching service in the early days was simple too.  Initially, it was just William and then Chad joined the company.  When the service call came in, the first available tech was quickly dispatched no matter the location.  But now things have changed.  Now the company has several service techs, some residential, and some commercial.  To be efficient, the company now needs a dispatching program.  QuickBooks doesn’t have that either.

So, what’s the point?  When a company is nearing a million dollars in gross sales, with a desire to far exceed that number, it’s time to at least begin thinking about installing that brand new fully integrated computer system, or at least to checkout additional programs that work in conjunction with QuickBooks.  Now the company is looking at an investment of $5,000 to $50,000 dollars plus at least a part-time person, if not a full-time person, to run it!

As sales move towards a million dollars a year, receivables are also becoming a major problem.  Panic would strike in the early days when a couple customers had not paid on time and receivables climbed to $25,000 or $30,000 dollars.  How was the company going to meet payroll that week?  The good news was that the company was growing which meant more money coming in, so cash flow wouldn’t be a problem before long, right?  Wrong!  As sales go up, so do receivables.  Now the company is easily looking at receivables in the $100,000 range or more, especially if they do a lot of new construction and/or commercial work.

When sales approach a million dollars a year, the company is being forced to make significant investments in staff and software, not to mention the need for additional cash to fund increased inventory and receivables.  That is a lot of additional investment but it’s totally needed in order to prepare the company to move to the next level.  Unfortunately, the company often does not yet have the sales to support the needed investment. The results are predictable.  As sales go up, profits are going down.  I don’t have any national statistics to support what I am about to say, but I have observed contractors, in every trade, across this country and in Canada, since 1987.  What I’ve observed is that a huge portion of contractors that reach $1,000,000 in gross sales for the first-time–lost money!  Wow, talk about frustration.  The new owner has spent years trying to reach a million dollars in gross sales.  Now they have finally reached that gross sales goal…and they are losing money.  Ouch!

Producing a million dollars in sales really is the most critical point of growth in the life of any contractor.  Now some reading this have already surpassed this number.  Congratulations, but watch out because the same process reoccurs at the $2.5f million, $5 million and $10 million-dollar levels.  These are all points of growth that will require the company to make significant investments to prepare for the next level but often without the corresponding sales to support the needed investment.

There you have it.  The second point of growth that has the potential of putting the company out of business. Next month we will look at the third and final stage of growth that can bring a company to its knees.

Guess what, you don’t have to re-invent the wheel when it comes to learning the business side of the business.  The Profit University Audio Series covers every conceivable business topic from selling the business to where to find techs.  The program contains over 275 audio presentations with a new one being posted each month.  Now for the good news.  The investment is normally $24.95/month but with this month’s Website Special the investment is only $19.95/month and it stays at that rate as long as you are a monthly subscriber.  Don’t miss this unique opportunity.  Sign up today.

Training On Your Time-CAC/BRY

By Bill Kinnard

We’ve all heard the old adage of the company owner that asks “What if we spend the money to send our people to training them, will they leave?” And his friend asks “What if you don’t and they stay?” It’s true, training your team in important. A well-trained team member will be more productive and will increase profits in the long run. Invest in your team and help them grow.

But training can be expensive. And you don’t always have the time or ability to send someone to training programs that may or may not give results.

Grandy & Associates is pleased to present our full line of Self-Paced Online Training programs. We call them our SPOT training. Now, you can have your team attend training from your office and on your time all without the need for travel. The library of programs covers several different topics for different positions. Each program is broken up into short segments so they won’t be sitting in front of a computer screen for 8 hours at a time trying to absorb new content.

Each program is highly interactive so the student can’t just let it play and not get anything out of it. They need to be engaging with the program every few minutes. At the end of each program is a quiz that they will need to complete and score 80% or better in order to pass.

There are several advantages to Self-Paced training. Think about it:

  • No travel time – lower overall cost
  • Each lesson is an hour or less – easier to absorb and your team member can attend in small time blocks
  • Attend just the lessons you want – incredible flexibility
  • Track performance so you can see if they retained the knowledge
  • Can repeat the lesson as many times as you wish over the course of 30 days
  • Attend anytime day or night

Topics include some of our most popular classroom sessions. Programs available through My Learning Center qualify for FAD credit hours. Other classes that are not available on My Learning Center can be accessed through the Grandy Learning Management System. Below are links to all of the programs.

HVAC Onboarding – Gain a conversational knowledge of the HVAC industry. This program is for anyone in your company who is new the HVAC industry. Register through My Learning Center and receive 8 FAD hours.

Log into My Learning Center and you will find the upcoming session dates and links on the opening page.

Communications for Contractors (2 lessons) – Help your team understand how to better communicate with the rest of your team and with your customers. This program is for everyone in your company. Register for Lesson 1 on My Learning Center and receive 1 FAD credit hour. Register for Lesson 2 at the Grandy LMS (no FAD credit for Lesson 2)

Service Managers’ University (8 lessons) – Learn how to better manage your Service Department. Learn what Key Performance Indicators to track on each technician and how to track them. Register through My Learning Center and receive 8 FAD credit hours.

Lesson 1 – Profitable Service Starts With A Solid Foundation

Lesson 2 – Demand Service – It’s All About That Price

Lesson 3 – Demand Service – Key Performance Indicators

Lesson 4 – Maintenance Agreements – Creating Lifetime Customers

Lesson 5 – Maintenance Agreements – Key Performance Indicators

Lesson 6 – ProfitSMART Activities – Turning On The Cash Flow

Lesson 7 – Service Department Goal Setting and Motivation

Lesson 8 – Service Department Leadership – Where Are We Going?

Why Do We Need to Charge So Much (1 lesson) – Designed for your employees to help them understand why you need to charge what you do, the boss isn’t getting rich and everyone plays a part in making sure the company is profitable. This program is for your entire team. Register for the Self Paced lesson on My Learning Center and receive 1 FAD credit Hour.

There is also a Team Leader version to walk your team through this content in 7 weekly 15 minute sessions – perfect for company meetings. Register for this at the Grandy LMS (No FAD credit for this Team Leader version)

5 Customer Buying Principles (1 lesson) – Every time a customer buys something they will go through five distinct steps. This program explains the five customer buying principles. If you understand them, it will change the way you approach your customers. This program is perfect for anyone who is selling to your customer. Register through My Learning Center and receive 1 FAD credit hour.

Carlyle Semi-Hermetic Compressor Teardown (2 lessons) – This is a technical program that walks through the Carlyle Semi-Hermetic Compressors and covers familiarization of the compressor and its internal systems as well as failure analysis to prevent the next compressor failure. This is for anyone who comes in contact with Carlyle Compressors. Register at the Grandy LMS (no FAD credit).

Planning For Profit Workshop – We are pleased to announce the streaming version of our Planning For Profit workshop. This session contains 35 lessons covering the same material we do in our two day, hands on workshop. This program also includes our industry leading Labor Pricing for Profit software. Register at the Grandy LMS (no FAD credit). Better yet, ask your Distributor to host an in-person workshop and receive 16 FAD credit ours.

Click on each of the titles above to check out each of the programs above or to enroll today. Get your team members the training they need and watch their productivity and your profitability climb.

Training On Your Time

By Bill Kinnard

We’ve all heard the old adage of the company owner that asks “What if we spend the money to send our people to training them, will they leave?” And his friend asks “What if you don’t and they stay?” It’s true, training your team in important. A well-trained team member will be more productive and will increase profits in the long run. Invest in your team and help them grow.

But training can be expensive. And you don’t always have the time or ability to send someone to training programs that may or may not give results.

Grandy & Associates is pleased to present our full line of Self-Paced Online Training programs. We call them our SPOT training. Now you can have your team attend training from your office and on your time, all without the need for travel. The library of programs covers several different topics for different positions. Each program is broken up into short segments so they won’t be sitting in front of a computer screen for 8 hours at a time trying to absorb new content.

Each program is highly interactive so the student can’t just let it play and not get anything out of it. They need to be engaging with the program every few minutes. At the end of each program is a quiz that they will need to complete and score 80% or better in order to pass.

There are several advantages to Self-Paced training. Think about it:

  • No travel time – lower overall cost
  • Each lesson is an hour or less – easier to absorb and your team member can attend in small time blocks
  • Attend just the lessons you want – incredible flexibility
  • Track performance so you can see if they retained the knowledge
  • Can repeat the lesson as many times as you wish over the course of 30 days
  • Attend anytime day or night

Topics include some of our most popular classroom sessions:

HVAC Onboarding (9 lessons) – Gain a conversational knowledge of the HVAC industry. This program is for anyone in your company who is new to the HVAC industry.

Communications for Contractors (2 lessons) – Help your team understand how to better communicate with the rest of your team and with your customers. This program is for everyone in your company.

Service Managers’ University (8 lessons) – Learn how to better manage your Service Department. Learn what Key Performance Indicators to track on each technician and how to track them.

Why Do We Need to Charge So Much (1 lesson) – Designed for your employees to help them understand why you need to charge what you do, the boss isn’t getting rich and everyone plays a part in making sure the company is profitable. This program is for your entire team. There is also a team leader version for to walk your team through this content in 7 weekly 15 minute sessions – perfect for company meetings.

5 Customer Buying Principles (1 lesson) – Every time a customer buys something they will go through five distinct steps. This program explains the five customer buying principles. If you understand them, it will change the way you approach your customers. This program is perfect for anyone who is selling to your customer.

Carlyle Semi-Hermetic Compressor Teardown (2 lessons) – This is a technical program that walks through the Carlyle Semi-Hermetic Compressors and covers familiarization of the compressor and it’s internal systems as well as failure analysis to prevent the next compressor failure. This is for anyone who comes in contact with Carlyle Compressors.

Planning For Profit Workshop – We are pleased to announce the streaming version of our Planning For Profit workshop. This session contains 35 lessons covering the same material we do in our two-day, hands-on workshop. This program also includes our industry leading Labor Pricing For Profit software.

Click on each of the titles above to check out each of the programs above or to enroll today. Get your team members the training they need and watch their productivity and your profitability climb.

Don’t Minimize The Power Of A Positive Word

By Tom Grandy

Technicians meet countless number of customers in their lifetime.  Some are lovable, others perhaps, not so much.  However, none of us have any idea what that person has gone through days, weeks, months or even years before you rang their doorbell.  Sometimes it was simply a negative comment someone spoke to them five minutes before you arrived.

The good news is that you, yes you the technician, that person has never met before, have an opportunity to speak a positive word that sometimes can literally change their life.  Below is a story I received a few days ago.  After reading it, I think you will get a fuller understanding of how really powerful your words and/or actions can be.  Sometimes it is even life changing!

One day a teacher asked her students to list the names of the other students in the room on two sheets of paper, leaving a space between each name.  Then she told them to think of the nicest thing they could say about each of their classmates and write it down.  It took the remainder of the class period to finish their assignments and as the students left the room, each one handed in the paper.

 That Saturday, the teacher wrote down the name of each student on a separate sheet of paper and listed what everyone else had said about that individual.  On Monday she gave each student his or her list.  Before long, the entire class was smiling.  “Really?” she heard whispered.  “I never knew that I meant anything to anyone” and “I didn’t know others liked me so much,” were most of the comments.

 No one ever mentioned those papers in class again.  She never knew if they discussed them after class or with their parents, but it didn’t matter.  The exercise had accomplished its purpose.  The students were happy with themselves and one another.  That group of students moved on.

 Several years later, one of the students was killed in Vietnam and his teacher attended the funeral of that special student.  She had never seen a serviceman in a military coffin before.  He looked so handsome, so mature.

 The church was packed with his friends.  One by one those who loved him took a last walk by the coffin.  The teacher was the last one to pass the coffin.  As she stood there, one of the soldiers who acted as pallbearer came up to her.  “Were you Mark’s math teacher?” he asked.  She nodded: “Yes.”  Then he said: “Mark talked about you a lot.”

 After the funeral, most of Mark’s former classmates went together to a luncheon.  Mark’s mother and father were there, obviously waiting to speak with his teacher.

 “We want to show you something,” his father said, taking a wallet out of his pocket.  “They found this on Mark when he was killed.  We thought you might recognize it.”

 Opening the billfold, he carefully removed two worn pieces of notebook paper that had obviously been taped, folded, and refolded many times.  The teacher knew without looking that the papers were the ones on which she had listed all the good things each of Mark’s classmates had said about him.

“Thank you so much for doing that, ” Mark’s mother said.  “As you can see, Mark treasured it.”

 All of Mark’s former classmates started to gather around.  Charlie smiled rather sheepishly and said, “I still have my list.  It’s in the top drawer of my desk at home.”

 Chuck’s wife said, “Chuck asked me to put his in our wedding album.”

 “I have mine too,” Marilyn said.  “It’s in my diary.”

Then Vicki, another classmate, reached into her pocketbook, took out her wallet, and showed her worn and frazzled list to the group.  “I carry this with me at all times,” Vicki said and without batting an eyelash she continued: “I think we all saved our lists.”

 That’s when the teacher finally sat down and cried.  She cried for Mark and for all his friends who would never see him again.

 We forget that life will one day end.  We don’t know when that will be.  We need to tell people how special and important they are before it’s too late.

 Before you ring the next doorbell remind yourself to look for something you can say or do that might just brighten their day.  Who knows, like the above story, it might just change the direction of their life.

Lives are also be changed through education.  The stumbling block is often when education is offered.  Problem solved!  This month’s Website Special is our Self-Paced Online Training.  Our new website is now up and running with lots of online courses you can take whenever it fits into your schedule.  The normal investment is $39.95 per module but this month the Website Special is only $29.95.  Check out the new website and well as all the new offerings for Self-Paced Online Training. 

Think Like A Sloth Occasionally

By Tom Grandy

It’s not easy being a company owner.  You work at least 60-70 hours a week, are on call 24/7, and the pressure of making a profit while keeping the team engaged and happy is always on your mind.  I get it as most owners do.  When was the last time you had dinner with the whole family or attended Billy’s ball game or Suzie’s recital or took a family vacation?  You know the answer and so do I.

This month I want you to take a deep breath and consider utilizing a few helpful tips from a sloth.  The sloth is considered the slowest creature on the face of the earth.  With that said, there are several things we can all learn from our friend the sloth.

  • Take Your Time – It takes the sloth a full minute to walk a foot-that’s slow! Now I’m not suggesting you move at a sloth’s pace but stop occasionally and take time to enjoy life and your family.  Stay focused on why you are doing what you are doing.
  • Get a Grip on Things – The sloth spends 90% of its entire life hanging upside down in the trees of the tropical rainforests of South America and Central America. If you were going to spend your waking and sleeping hours hanging upside down in a tree, I suspect having a really good “grip” would be very important.  Company owners may not hang upside down but if they are going to run a profitable business, they best have a really good grip on what’s going on especially from the business side of the business.  Take an afternoon off and spend it reviewing your P/L Statement, the status of receivables and payables and perhaps even reviewing your pricing structure.  Make sure you have a really good “grip” on the business side of the business.
  • Keep a Low Profile – While the sloth provides the algae with shelter and water (as sloth fur is highly absorbent), the algae provides the sloth with. What’s the lesson?  Keep a low profile with your employees.  Take time to build relationships but don’t hover.
  • What You Eat Is Important – A sloth’s diet consists mainly of buds, leaves and tender shoots, although some sloths have been known to eat insects and birds to supplement their diet. This proves to be a slow process, often taking 30 days to digest one leaf.

When we were 25 or 30 years old most of us could eat most anything we wanted, without repercussions.  However, being a bit more careful about what you eat, while getting more exercise, has many long-term benefits.  Consider eating more green stuff, like a sloth, but perhaps minus the insects and birds!

  • Be Aware of What’s Going on Around You – Sloths have an extra vertebrae at the base of their neck that allows them to turn their head on a 270° This enables them to obtain an almost 360° view of their surroundings, which proves to be a highly beneficial defensive mechanism.

Delegation is critical if a company is to grow and prosper.  However, as the owner you need to be fully aware of what’s going on within your business.  Meet with department heads often to be sure you have a 360-degree view of your business. 

Remember, the buck stops with the owner.

  • Hold Breath – Sloths are amazing creatures. They can also hold their breath for an impressive 40 minutes, suppressing their metabolism to make their heart rate a third of its normal speed.  Sometimes really tough situations arise that can raise one’s blood pressure to rise and allow emotions to boil over.  Take a lesson from the sloth.  Take a deep breath, wait a few minutes before you speak and count the cost of what you are about to say or do before you do it.
  • Get Plenty of Rest – The Greek goddess Aergia was the ancient personification of the sloth and was known to sleep often. The sleeping pattern of a modern-day sloth is dependent on its habitat, with sloths in captivity sleeping up to 15-20 hours a day while sloths in the wild sleep much like humans, about 8-9 hours a day. Learn from the sloth and get enough rest.  There is a direct relationship between rest and productivity.  Every once in a while, “intentionally” go to bed early.
  • Attitude Makes a Difference – The facial structure of a sloth gives the appearance that it is constantly smiling – even if it is experiencing pain, stress or anxiety. When that disgruntled customer drops by or calls, at least give the appearance of being at peace.  Don’t forget a sloth can hold its breath for 40 minutes and give the appearance of a smile.  Surely, we can at least take a deep breath to provide some time to think before we speak. 
  • Limit Stress – In the wild, sloths typically live quiet, sleepy lives. Being constantly surrounded by noise and people they can’t escape causes them unimaginable stress. Running a business is hard work and often stressful.  Take a lesson from our friend the sloth and take a few days off occasionally, or even a week or two vacation with the family.  Your wife and children will appreciate it and you will return to worked refreshed and a bit less stressed.

By the way, the average life span of a sloth is 20-30 years.  Perhaps applying some of the tips from our friendly sloth might just extend your life while helping you to live in peace.

Monthly Website Special:

Personal and company growth is critical. The stumbling block is often when education is offered.  Problem solved!  This month’s Website Special is our Self-Paced Online Training.  Our new website is now up and running with lots of online courses you can take whenever it fits into your schedule.  The normal investment is $39.95 per module but this month the Website Special is only $29.95.  Check out the new website and well as all the new offerings for Self-Paced Online Training. 

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