Things to Review: As the New Year begins it’s a good time to stop and evaluate where you are
We are all familiar with the definition of insanity which is doing the same thing over and over while expecting different results. So the question is do you have 30 years of experience or one year of experience repeated thirty times? Wise, and I might add profitable, companies review past performance, make necessary and positive changes, and move forward.
2015 is now behind us and most reading this article should have a year-end profit and loss statement to review. Although profit is an important indicator of how a company is doing there are many other areas that need to be reviewed, at least annually. Reviewing past performance, and making positive changes, will also have a dramatic positive affect on your bottom line. Let’s create a list of items to review.
- Total number — Do you have more, or less, maintenance agreements in place now than a year ago. It doesn’t really matter if the number went up or down, the question is “Why?” and “What are you going to do about it?”
- Profitability — Are your maintenance agreements profitable? If the answer is no, what are you going to change for the coming year to correct the problem.
- Who is selling maintenance agreements? — Did office staff or your technicians sell most of your agreements last year? How can each group be encouraged, or trained, to increase sales?
We talked about total indebtedness last month. Make a list of every dollar you owe — that includes payables, loans, lines of credit, supplier debt, back taxes owed, credit card debt, personal money the company owes you, etc. Total the dollars owed and see how it compares to what you owed last year. Is your total debt increasing or decreasing? This can be a real reality check.
How long have your employees been with the company, and are they productive in their respective jobs? I love the way author and personal finance guru Dave Ramsey puts it. To paraphrase, you need the right people on the bus AND each person needs to be in the right seat on the bus. Two questions to think about here:
- If there has been a lot of turnover the past year (office or field) the team needs to ask the question, why? If you are unaware of the source of the problem it’s difficult to fix.
- Are all staff and techs productive in what they do? Relationships tend to mess up good business decisions. Translated, keeping unproductive employees will eventually hurt the entire company. Over the years I have found most everyone is really good at something. Keeping an unproductive person not only hurts the company but it limits the potential of the individual. Sometimes the best thing you can do for an unproductive employee is to force them to move on to another position, in another company, where their unique skills can be better put to use.
What information flows into your hands on a daily, weekly or monthly basis? Is the report, or information, helpful or is it wasting your time and others time? What new, productive, information would you like to receive this coming year?
Sales closing percentage
If you are not tracking the close rate for your sales people and/or yourself you should be. Are your teams closing percentages higher this year than last? Why, or why not?
Review rewards programs
What incentive programs are provided for your staff and field labor people? Employees tend to work more productively when specific goals are set and rewards are provided for outstanding performance. Remember rewards can come in forms other than money. What about time off, sent on a trip, tickets to a ball game, dinner out, etc. Be creative!
What kind of training did you provide last year? This can be technical or customer service training for techs. What courses, seminars, webinars or conferences did you and/or your staff attend? Continuing education is important. Just being away for a few days can refresh the body as well as the spirit. What was productive in the past and therefore what are your plans for this year?
What is the status of documenting your systems? I am talking about physically writing out the steps for everything that takes place within your company (who answers phone and want should they say, how to process a credit card, paperwork trail when a job is sold, etc.). Have each individual document everything they are responsible for within their position. Why? One day they may be sick, or absent for an extended time and someone has to know how to do their job. This process will take months, if not years. Have you started this process and if so, what is the status?
What did your total receivables look like this time last year verses now? If receivables are growing find the source of the problem and correct it.
What have you done for your customers....lately?
Your current customer base needs to be touched 4-5 times a year. Are you doing that and if not, what will need to change for the coming year?
Company image within the community is important. What has the company done this past year to be involved within the community? Remember the community IS your current, and future, customer base. What plans do you have to get involved this coming year?
Changes in marketing
Have you made any changes in your marketing strategy this past year? If so, are you seeing results? What needs to change this coming year?
You might want to consider having a team meeting to answer the above questions. Chances are new ideas will arise that will benefit everyone in the company. Reviewing past performance is important if it is used as a springboard for future positive changes. Remember, if you are not growing you are dying!
Is your company growing, but making less and less money? If so, it might be time to have a two-day, on-site, Company Overview performed. Over the two days we will model your company, by department, on our labor pricing software. By the end of the two days your Financial Business Plan will tell you what you need to charge per hour and you will have created month-by-month, department-by-department cash flow budgets to track your progress. Proper maintenance agreement and job pricing will also be determined.
For more details, contact Tom Grandy. We are also offering Reeves Journal readers a $500 discount so be sure to mention you read this article.