January ♦ 2018
In This Issue...
What Did You Learn Last Year? [Tom Grandy]
Improve Your Business AND Yourself in 2018 [Dave Ramsey]
Set a Goal and Measure Your Progress [Tom Grandy]
Planning For Profit: Workshop locations available [Grandy & Associates]
Profit University Audio Series: "Eat the Frog" [Brian Tracy]
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.
Do you know what to charge to generate the profit you desire in each department? Have you created a month-by-month cash flow budget to project months of negative cash flow? Are your residential and/or commercial maintenance agreements priced properly? Can you price a job in a matter of minutes based on your cost of doing business? If not, it may be time to purchase our industry acclaimed Labor Pricing for a Profit with Cash Flow Projections software. As this month’s Website Special it may be purchased for only $299.95 which is a $100 saving. No Risk! Order today!
Like all our products if you are not 100% happy, simply return it for a full refund no questions asked.
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Improve Your Business AND Yourself in 2018
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!
* Small business expert Dave Ramsey is CEO of Ramsey Solutions. He has authored numerous best-selling books, including EntreLeadership. The Dave Ramsey Show is heard by 13 million listeners each week on more than 585 radio stations and multiple digital platforms. Follow Dave at entreleadership.com on the web.
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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:
- It provides a wonderful feeling of personal accomplishment.
- When it comes time for your annual review you will be armed with information to back up your request for a raise.
- 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.
Web Site Special
Is your long term goal to move into management? If so, you are going to have to understand the numbers. Few technicians know what to charge to generate a profit in each department. Fewer have ever created a month-by-month cash flow budget to project months of negative cash flow. Do you have any idea how residential and/or commercial maintenance agreements pricing is set? Can you price a job in a matter of minutes…based on the company’s cost of doing business? To begin to understand the “business side of the business” you might want to purchase our industry acclaimed Labor Pricing for a Profit with Cash Flow Projections software. As this month’s Website Special it may be purchased for only $299.95 which is a $100 saving. Order today!
Like all our products, if you are not 100% happy simply return it for a full refund, no questions asked.
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Planning for Profit: Workshop locations available on our web site
Planning for Profit seminars are two-day workshops held around the country and are in-depth training on how to significantly increase profitability.
You will learn exactly what you have to charge per hour to cover costs while generating the profits you want. The program will also create month-by-month, department-by-department cash flow budgets, set proper residential and commercial maintenance agreement pricing, and let you bid jobs for profit (based on your cost of doing business).
Attendence to these events are limited and space is still available. Learn more and register today!
If a workshop isn't scheduled for your area we encourage you to talk to your Distributor to see if they will be sponsoring a workshop in your city!
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"Eat That Frog"
By Brian Tracy
Short Presentation Description:
This is an interview by Becky Robinson of Weaving Influence with Brian Tracy about his international bestselling book on time management entitled “Eat That Frog!” Brian will share numerous practical tips throughout the interview on time management. This is one of those “must listen to” programs.
Listen to a sample of this months' program! The Profit University Audio Series features a new trade focused audio presentation every month. These programs are designed to provide the trades contractor relevant information that can help their business immediately. Get more information on this program or sign up for a monthly subscription today.
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