Tuesday, August 3, 2010

Lazy Hazy Days of………

Perhaps you remember the song lyrics,
“Roll out those lazy, hazy, crazy days of summer
Those days of soda and pretzels and beer
Roll out those lazy, hazy, crazy days of summer
Dust off the sun and moon and sing a song of cheer..” by Nat King Cole. I heard the song the other day and it brought some thoughts to mind.

Well, “the lazy hazy days of summer” are not what I was thinking about! I’m referring to the typical days of a contractor. Day in and day out they are too lazy to do what needs to be done to fix their business. Or it’s as if they have a haze around them and can’t see the issues that need addressing. In either case they let the days slip by without maximizing the income and profit they deserve for the efforts they put into their business. It becomes frustrating to a consultant when you pass along information that will make a substantial difference in the top line or the bottom line of a business and the owner or manager is too lazy or hazy to implement the change. I see it very often with contractors and as a very strong advocate for business owners and managers, it is so disappointing. The changes would make their life easier, or more fun, or more profitable, or protect their business, yet they remain in their lazy hazy mode. It appears to be an epidemic in the contracting business.

Recently, an old friend in the contracting business closed up shop. I had always admired him for the niche market he had carved out in the plumbing business. But he refused to move with the times, prospect for new customers, or add services to attract new customers and have additional sales to existing accounts. There was nothing to sell at the end except a small building and then bankrupt the business. There was nothing to pass to the next generations, nothing for retirement, and nothing to give to his favorite charity. He is not a pauper but his decisions left hundreds of thousands if not millions of dollars lost. I have several other friends in the contracting business moving towards the same situation. What a shame after decades of struggling, sacrificing, and under-compensating themselves, they will not be able to enjoy a successful retirement in a few years.

I have been a member of associations, groups, been to hundreds of seminars and saw and still see the same thing happening to so many contractors. The epidemic has shown up everywhere.

Now some do have issues beyond their control that affect the profitability of their business. These can include health issues, accidents, unscrupulous owners or general contractors, theft, and family problems. Some of the results cannot be overcome but once again I have seen the lazy hazy contractor letting the situation control them.

Are you caught up in the lazy hazy days of business? You probably know exactly what you need to do to make your business a success. DO IT! If you don’t know what to do to make your business a success, then find a consultant to help you. Only do this if you truly are willing to change.

Saturday, May 1, 2010

No-See-Ums on your P&L?

No-see-ums are tiny insects that are a bother in the South including the Caribbean. They are so small that they can go right through screen. They bite like a mosquito with the bite welting up into an itchy red spot. You can get dozens of them without even knowing it until the itch comes hours later. Often their bite is more annoying that the mosquito’s bite.
The same thing is happening on many of my clients P&L statements. They were smart and developed a budget before the year began. They break it down into monthly budgets and even weekly budgets and monitor them against actual sales and expenses. They are getting bit by almost invisible expenses from a variety of sources thus reducing their profits. “What are you talking about Dan?” Let me explain.
Since all of my clients are on Menu Pricing, they quote a complete price to their customers. A water heater replacement is quoted including all expenses needed for a complete to code installation. This would include materials, labor, warranty, taxes, and permits. What they are finding is the fees for permits and licensing are increasing as a way for cities, counties, and states to increase income. The taxes for use and sales tax are increasing, and the suppliers are increasing fees for deliveries, returns, and warranty handling charges. Disposal fees of the trash from the job continue to increase. You have these tiny costs and cost increases biting into your profits. These costs were not planned on when they developed their budgets.
Additional “No-See-Ums” include federal, state and local business taxes, business annual inspections, increases in unemployment taxes, base rates add-ons to your utility bills, waste and water bills. Unfunded mandates from the federal government and state governments trickle down to the local level where you are taxes, assessed, fined or charged to cover the costs. Of course the banks continue to increased charges for credit card processing and other services.
Other “No-See-Ums” include additional fees for your vehicles including higher license plate costs, higher tire and oil disposal fees, higher tolls, stricter traffic enforcement (traffic tickets), and stricter D.O.T. enforcement (truck inspections).
I’m sure there are many others I have missed in putting this blog together. It is vitally important as a company to earn a profit to stay in business. Watching the little things on the P&L as well as the big things can help in achieving the profits you planned for when you developed your budget. Break down your expenses into reasonable categories so you can quickly monitor changes from the “No-See-Ums”.

Friday, March 5, 2010

The Only People that Lose Baggage are Airline Employees

With 30 plus years in the plumbing and HVAC business, I think I made just about every mistake one could make in hiring new employees. I hired family members, I hired people back after they left for a small raise, I hired without checking references, I hired without the new hire having a drug test and physical, I hired without checking driving records, I hired applicants with poor skills and training. These were some of the most obvious and repeated mistakes I made. There were others, I just erase them from memory to feel better about my hiring skills back then. I have coached dozens of owners through the years who have made the same mistakes and often for the same reasons. Let’s look at some of those reasons.
“I really need someone right now!” How often I have heard this and how often I said this. Without planning and continual recruiting, a contractor puts himself (or herself) in a difficult situation when the season rolls around, the big job comes in, the economy improves, the weather, Joe just injured himself and will be out for several weeks or months, or Tom just quit. Without an immediate list of potential qualified, baggage free candidates, we have little choice, at least that’s what we think, than to place an ad and select from the first few who apply. Occasionally we even get lucky and stumble across a qualified baggage free applicant to hire. More often, we hired someone with baggage, but we selected the one with just two carry-on pieces. The other thing we do is hire someone who keeps calling looking for a job without investigating the entire market of available people. We do this because it’s easy. We probably know the person from somewhere and even know the baggage the carry but it’s quick and easy just to hire them. Here comes two carry-ons, two large suitcases, and two steamer trunks with them.
“He (she) will change once he (she) is working for our company.” Sure they will change or you will change them. A large portion of the fifty percent of marriages that fail are because one thought the other would change or they could change them. That usually does not happen. Most people can’t stop smoking without help from a doctor, a hypnotist, or a drug. Yet we, as contractors, think we are going to change a habit that a person has had for years or maybe their entire life because we are so smart. Face the fact, it is very unlikely that this will happen. Your energy is better placed on taking care of your customers and your business.
We make the mistake of not recognizing or acknowledging the baggage. Baggage can come in many forms. It could be job hopping. It could be anger. It could be drugs or alcohol. It could be a sense of entitlement. It could be sloppiness. It could be poor work habits or lack of skill. Of course there are others, but the point I want to make is that it is so very important to carefully and skillfully hire the very best candidates you can find with careful searching. Evaluate the baggage that a candidate is bringing to your company and how that could affect your company. Remember, “Airline employees are the only ones that lose baggage.”

Monday, February 8, 2010

Believer or Follower?

We are babysitting our grandchildren in the Orlando area this week. Our Daughter and Son-In-Law are both out of town so we have the opportunity to enjoy and spoil the Grandchildren. There are four of them, all under the age of 7 and keep Grandma and Grandpa going from sun up to sunset. We were able to take them to church on Sunday. They go to classes and we have an hour or so to relax and enjoy the message and worship. Often I catch an idea from the message that carries over to the business world. And that was what happened this Sunday.
The pastor asked if we were a believer in Jesus or a follower. It immediately struck me that this applies to business in a little different way but still as an important point. Are you a believer in the basic principle of business and management or are you a true follower of those principles?
Let me give you a couple of examples. Do you believe your company should make a profit? Or, do you believe your employees should be accountable for their actions and produce a profit for your company? Do you believe a contractor is as valuable to society (customers) as a doctor or a lawyer? Do you believe in providing the customer with “first class” service?
I am quite confident that you believe in at least three of these examples. I find many contractors don’t believe in their own value to society (customers). I work with contractors and techs to help them realize their value to the health, comfort, and well being of society (customers). The other three are areas almost every contractor I have ever met, believe, but that’s where it ends. They believe but they do not follow. What does that mean? There is a huge difference. You can believe in these fundamentals but the real question is do you follow those fundamentals daily in your business? A follower is one who constantly is working at improving these fundamentals. They have a plan and goals. They have check points along the journey to measure their progress. They don’t allow themselves to get caught up in the little meaningless things of the day. They focus on the issues that make their company profitable, sustainable, and customer directed in every area of the presentation to the customer.
Are you a believer or a follower?

Sunday, December 27, 2009

Wish it or Will it!

We are quickly moving into 2010. The start of a New Year is a time that many of us make New Year’s resolutions. We are going to lose weight, get into shape, be more disciplined in following our faith, or kick a bad habit. It’s a time to change our ways! It’s a time for new beginnings, a time for improving ourselves, a time to make the New Year even better than the last year. We takeoff with a wish to change and many of us don’t have the will to change and the result is we fail. By the time February comes, the new exercise equipment is gathering dust, the few pounds we lost in the first weeks of January are back as our spare tire, and we still have that bad habit!
The same happens as we start a New Year and make some vague plans to improve our business. We’re going to make a profit this year. We’re going to grow and add a couple of technicians this year. We’re going to get rid of that problem employee this year. We’re going to start saving for our retirement this year, and so on and so on…. Each of these may be the exact thing your business needs in 2010, but my guess is it is the exact thing your business needed at the beginning of 2009 and maybe several year beginning’s prior! How do we get out of this cycle of “Goal Failure”?
Perhaps these ideas will help change the yearly “goal failure” in your business and possibly your personal life. First, the goals need to be written, then they must be very specific, and they must have a time frame for completion. Now for the hard part of the first step, you need to share your goals with someone who will hold you accountable. This could be your spouse or a friend.
Second, post your goals where you will see them almost every day. To paraphrase Earl Nightingale, “You become what you think about all day long”. Seeing the goals continually will keep them on top of your mind and what you think about. Put them up on your wall, on a 3x5 card that you carry in your pocket, on your “Outlook” calendar every day of the year so they come up as you start up your computer.
Finally, I would recommend that you mark your “Outlook“ calendar for a review of your goals every 2 months. Things do change, and you may need to change a goal or two. Who knows, you may be so far ahead of your goal that you need to set a higher goal before the end of the year.
Need some forms for the New Year to help set goals for your business? You can go to our website, www.SayYesToSuccess.com, and go to the “Free Stuff” tab. Near the bottom of the page are several free forms to begin a Successful 2010. Remember “Say Yes To Success in 2010”!

Wednesday, December 9, 2009

What’s up with this?

I keep hearing about all the people who do not have during this difficult recessionary time. I keep hearing about all the programs the government at the state and federal level are telling us are necessary to help those who do not have. I look at the people I know and see how they are giving to those who do not have and something just is not adding up.
A small Bible study group Lynn and I are involved in raised hundreds of dollars just from a handful of families and provided Thanksgiving dinner, Christmas presents and a sizable gift card for two have not families. Church after church, civic group after civic group donated money and food for needy families during the Thanksgiving and into this Christmas season.
Our local PHC association here in Southeastern Michigan raised over $1,200.00 for Gleaner’s Community Food Bank. Additional money was giving by individual contractors to numerous groups who help others. At least five of the companies (there are only about 20 small companies) are having can food drives, giving customer discounts for cans of food and then giving the food to the Gleaner’s Community Food Bank. Literally thousands of cans have or will be given during November, December, and January.
During the Katrina disaster, thousands of people from the Detroit area alone went to Louisiana and Mississippi using their own time and money to get there. They worked tirelessly to rebuild the area with their sweat and love. Many were from faith based organizations and civic organizations. Thousands of others from around the country also made the trek to the hardest hit areas.
None of the folks or companies mentioned are wealth or exceptionally profitable, but they dug deep into their pockets and gave substantially to others with needs. Americans are a giving people when they know of a need. I’m a firm believer in limited government and the spirit of the American people. We do not need additional government handouts and programs. Perhaps we just need a few more Americans to see the needs of this world and get involved. I salute each of you who have given of your time, your money, and your talents. For those who have not or have only done so sparingly, consider doing it on 2010. It could be a New Year’s resolution that will give you a joy and satisfaction beyond understanding.

Sunday, November 1, 2009

Less Calls = More Revenue Part 2

It’s now been over a month since we had the Customer Service Training for technicians with three companies. Some of the training has “rubbed off” but that is only because we have continued the training in house. Training is so important to take an inbound call properly then have the technician follow the steps on the call needed to be successful in completing the call with an outcome that is excellent for the customer, the company and the technician. It’s always necessary to attempt to have a win, win, win situations with each customer. So much easier said than actually accomplished. The company can provide all the tools needed to do this, these would include a well training inside staff, a well equipped truck, a well designed truck inventory, thought out efficient systems within the office, technician technical and customer service training, along with the ancillary materials for the technician. Most companies provide a reasonable effort at each of these. What it really comes down to is the desire and abilities of the technician to go beyond “fixing” the initial called in problem and being a consultant that the customer is looking to for solutions.
I was in Micro Center Computers & Electronics this afternoon and there were dozens upon dozens of customers in the store. Some were there to buy ordinary supplies and others for upgrades to their computers or new computers. The store had an abundance of knowledgeable staff to assist those with simple questions and needs and those with very technical questions and needs. They were consultants. The customers could buy many of the items in the store at other merchants and likely for similar prices, but not the consultant service provided. The store’s cash registers were busy the entire time I was in the store with a line of 15-20 waiting to check out. How do we help our technicians to become consultants and not just fixers or part changers?
I believe it comes down to the things most owners and managers dislike doing. These include role playing, customer service training, coaching, ride-a-longs, and proper hiring. It is a full time job to do these if you have more than a couple of technicians. The results will be amazing if the effort is put into each of these. We work hard to get the telephone to ring and then we don’t maximize the opportunities on each call. The hook lies in the fact that many owners were technicians themselves and have that same built in resistance to the consultant environment. This is the advantage those who come from outside of our industry have when they operate a company within our industry. Are you ready to change?