Category: Uncategorized

Small Business Getting a Handle on Financial Statements

 

We recently received a question from a contractor.  Here is the question and what our suggestion was for him:

Q:  I’m a small business (just me and another tech) and I don’t have anyone in the office to keep my books.  I know I should have a better handle on how my business is doing financially, but I can’t afford to hire someone.  Right now, I gauge my business success on how much money I have in the bank.  Any ideas?

A:  You are not alone.  Many contractors have the same problem that you do.  Your financial statements are a very important tool that allows you to see the following:

  • How much revenue you are bringing in;
  • Where you spend your money;
  • How much profit you make;
  • Who owes you money;
  • How much you owe suppliers;
  • How much cash you have;
  • The amount of debt you have (loans, notes, etc)

Financial statements can identify challenges that you have in your business as well as assist you with knowing when and how to grow your business.  It is one tool that you cannot afford to go without.

So here is my suggestion:  Go to your Yellow Pages, or online, and look under bookkeeping service.  Find someone who you can outsource your bookkeeping to.  Most small businesses use QuickBooks-certified.  Make sure and ask for references and let the company know that you need to get timely information.  It will need to be able to do the following: record customer invoices and deposits made into your bank account, enter and reconcile accounts payable, reconcile your bank statement each month, and assist you with quarterly tax payments.  If they will also take care of your payroll, I highly encourage you to let them process payroll for you as well.  If they do not process payroll, look for a service such as ADP or Paychex to do it for you.  Payroll is one of the most error-prone accounting processes for small businesses.  And it can cost you thousands in penalties if you don’t process it right!

Insurance Rates Rising Each Year for Contractors

Are your insurance rates skyrocketing each year and you are wondering what you can do to get them down?  We are hearing from contractors across the country who are facing insurance sticker shock as they open up their latest statements.  Since you need insurance to run a proper business, especially in the home services trades, what can you do?  Here are a few quick suggestions:

  • Do Some Shopping – The easiest think you can do is to get on the phone and start calling around.  Get some competitive quotes from other insurers for the policy you need to protect your company.  If you find one that saves you money for the same level of coverage, don’t be afraid to make the switch.
  • Boost Your Share – The deductible is essentially the portion of the risk that you’re willing to take off the backs of the insurance company.  When you agree to take on more of the risk, they reward you with lower rates, so see if raising your deductible is a strategy that makes sense in your company.
  • Classify Correctly – The rates for a contracting company will be determined by the classifications the insurer puts you in based on the types of work that you do.  Talk to your insurance company and make sure they have you classified in the proper section.  For example, if you used to do a lot of work that required ladders and heights but you no longer do that work, you’re likely still classified there and paying more that you need to.  Make sure you’re insured for the type of work that you actually perform currently.

Finding a lower rate for your insurance is possible, but it will likely require some leg work on your part.  However, every dollar that you save in insurance costs is another dollar that will wind up on your bottom line, so finding the best deal on the proper coverage is a valuable exercise for every business owner.

Tips for Hiring (and Retaining) the Best Employees

It is amazing the number of times I hear, “I can’t find any good employees.” It can be challenging to find good employees, but they are out there. It takes diligence to secure superstar employees from the general workforce pool. But… there is another way to add superstar employees to your team.

All it takes is the right tools and knowledge to acquire your own group of superstar employees.

Tip #1: Hire Right / Dehire Right

Everything always has to start with the right person. You can’t expect to grow a strong team with bad seeds. It all starts with proper hiring, and the first procedure is to look for a great attitude. It takes a great attitude to become a superstar in the contracting industry. Nothing will determine the success of an employee more than their ability to establish trust and rapport with clients, and that comes across in a great attitude.

Attitude is one thing that is very difficult to teach. A good attitude can and should be positively reinforced.

But a bad attitude is hard to correct — if neglected it can corrupt your entire team. Those with the right attitude are often more willing to learn. An employee who is willing to learn will be worth more to your team in the long run than the most technically or systems-educated employee with a bad attitude.

Start the search for your superstar employees by finding people with great attitudes.

Tip #2: Right Training

Once you have identified the right person, it is time to get them the right training. Let the new employee ride along with co-workers. But… BE CAREFUL… First, you should conduct ride-alongs and be sure the new rising star is not riding along with a black-hole-attitude employee.

The rising star must be given the opportunity to observe what they are supposed to be doing on each interaction with the customer and absorb what they observed. That is why it is important for you the owner/manager to conduct a ride-along with the existing employee before turning your rising star over to them.

Tip # 3: Positive Behavior Reinforcement

You have to reinforce the strengths, positive attitudes, and performance with your entire team to continually get the best results. This comes with providing your entire team with external training. Nothing says “I am willing to invest in you and your future” more to employees than investing in their continued success. Allow them to grow their knowledge base and meet other professionals that perform the same job function in a different city or state.

Tip #4: Accountability

Hold all employees accountable for performance. Let your employees know what you expect and want them to do. Make sure they are doing what they’re supposed to do. Put up goal board and update them DAILY at minimum.

Let your employees know about upcoming external training opportunities and show them the way to further their success. Conduct ride- alongs to allow your employees to demonstrate they know how to perform the job (let them show you how bright their star really is).

The way to grow a championship team year after year is to invest in the proper tools, employees, and knowledge to ensure you, your business, and your team will enjoy success in the coming years.

See Success with Your Mind’s Eye

 

In an industry that is so active and requires physical action on a daily basis, the psychology of success can often be overlooked. That’s a critical error. To achieve goals, there must first be goals in place.  Unfortunately, long-term aspirations don’t always make themselves abundantly clear in the form of tangible targets or specific numbers. To endure the ups and downs that come along the journey to achieving inexact goals, the proper attitude and perspective is a must. For many reading this, the dream is attainable, making this discussion more than just cheerleading. It’s important and should be continually reinforced, especially in the dog-eat-dog world of small business.

In order for you and your company to become the means of providing everyone involved in it the lifestyle they desire, you must, “Dream It, Perceive It, Believe It and Conceive It.” What does that even mean? We may know the dictionary definitions, but how does it apply to a contractor?

Dream It

If you’ve been in business for years or are just starting out, it’s never too early or too late to dream. In fact, regardless of where you are in your career, as an SGI member, you have a head start because of the support. It’s also clear that you have the desire to be better.

Do you know specifically what being better and succeeding means to you? So that you never have to rely on anyone else for motivation, you need to establish it. Envision what it is you’re looking to build through your business. In other words, you have to know what the company is going to look like before you get to the point of success. So, first things first, you must dream it.

Perceive It

Now you have to start to see it clearly in your mind’s eye. What does your shop look like? What does your training facility look like? How much business are you going to do? How dominant are you going to be? What’s it going to provide for you and your family? All of these things you start to make concrete.

Someone once told us a story about how they took a Dale Carnegie class many years ago, and one of the suggestions to the class was to actually put together a binder of the things they envisioned life to look like in the future. Another guy in the class had done the exercise ten years earlier and he shared his binder with the class. At the time he made the binder, he was single, but he had a picture from a catalog of a guy with a woman and two children. Lo and behold, ten years later he was married with two kids.

There was also a picture of a house. And boy, did the house that he lived in ever look like the picture that he put into a book ten years ago. Next in the binder were pictures of the cars he dreamed of owning. Surprise, he was driving the cars that he had back in that picture.

The point is, the clearer your vision, the more likely you are to succeed at what you are attempting to do.

Sit back some day, this day, tonight, tomorrow, this weekend, turn everything off and just dream a little bit and then start to make it very, very clear.

Believe It

You’ve got to believe you can do what you dream and perceive. You’ve got to believe it can be accomplished. This is your attitude; this is the thing that you have to be able to control. You have to be able to say, I know I can do this. Then, start down the path.

Don’t be mistaken however, it’s not going to be an easy path just because you dreamt it and have a clear perception of it. You’re going to have to work to make those dreams become reality. Some people might get very lucky and be born with the right name and inherit a great deal of wealth. Somebody else might get lucky and get a lottery ticket that’s going to pay off. But for those who succeed and get what they dream of in life, they work hard to be able to accomplish it. When you do that, you’re going to find out how quickly you can achieve it.

Conceive It

So now you see it in your mind’s eye. You know you can, but before you get to achieving, you have to conceive it. Now is the time to put it on paper.

You have to make a plan and say, “Here’s how I’m going to get it done. This is what I’m going to do to get this dream to become my reality.” Get it down so that you can share it with your support structure and tell them, “This is what we’re going to do. This is how exciting this is going to be.”

This is the step where the work begins. You’re going to begin executing your plan and make certain that you achieve what it is that you’re after.

Stop Bailing & Start Fixing!

“I’m too busy to get anything done!” It’s a line that I hear too often from members. It’s also a thought process that can cripple a company. That one simple sentence indicates to me that you’re likely spending too much time bailing water out of a sinking ship, rather figuring out how to stop the leak.

I know there are times when you’re spending as much as 70 or 80 hours as week in your office. You start the day with a plan. You have a to-do list filled with important tasks that need to get accomplished. Yet even at the end of a long workweek, you rarely get anything checked off that list! Why is that?

Too often the items on your to-do list get pushed to the side so that you can “put out fires” throughout each day. Instead of getting things accomplished that need to be done, you’re beating yourself up to handle constant problems. Instead of fixing your company (fixing the leak), you’re trying to keep things running (you’re bailing water on a sinking ship). So, how do you reverse that trend and start fixing, rather than bailing? Here are a few critical steps:

Start Training

Most of the time when business owners are forced to deal with constant issues it’s due to the fact that their people are not trained. The phone isn’t getting answered properly, and technicians aren’t communicating well with homeowners.  Stop the problems from happening in the first place!  That means mandatory training for CCRs and technicians at least once a week – I suggest twice a week. Make role-playing a constant, and get your people to understand what’s expected of them, rather than you assuming they know.

Empower Your People

Once you’re confident your people know their jobs, get out of their way.  Don’t become a crutch. There is no reason why you should be on the phone with every single technician on every single call. You’re not a baby-sitter – you’re the boss.  If your tech makes a mistake, so be it.  There’s no reason to beat him up over it – mistakes happen.  Instead, turn it into a learning exercise at you next training meeting.

Watch Your Numbers

The common denominator in profitable companies is that the owners are looking at their numbers. Your numbers will tell you if your team members are struggling and you need to address a particular issue in training. In other words, your numbers are like the gauges of a ship. Based upon what they tell you, you will know how to best steer your company.

Running a contracting business doesn’t have to feel like you’re aboard a sinking ship with no land in sight. Stop bailing water and start looking for a way to patch that hole. That means giving your people the proper training, supporting them in their decisions, and watching your numbers. You’ll be steering away from danger and toward profitability in no time!

Save money by replacing faucets with low flow faucets

When it comes to purchasing or replacing faucets in your home, why not consider “going green” and installing water efficient faucets that will save you money for years to come? Think about it. It really makes sense.
Let’s face it. Water is a resource that is in short supply all over the world. Yet, we take it for granted every single day of the year. Summers are getting hotter each year and many areas in the United States have reduced water supplies during hot summer months.

Why not invest in the future, YOUR future—and your children’s future by doing your part to preserve the water supply AND save money? You can do this with low flow faucets that are environmentally friendly. Low flow faucets save you money because they use less water without compromising the user’s quality of water flow.
Low flow water faucets have come to be very popular in the last couple of years, due to new technology which provides better delivery of water pressure, yet uses less water. This in turn saves you money over the life of your new energy efficient faucets, because you are using less water.
Choosing new faucets when building a new home or changing out your faucets in your current home for new energy efficient and low flow models is a great way to take the first step in making your home an environmentally friendly and energy efficient home.
Think of all the money you will be saving as your “green” reward.

Keeping Your Eyes on the Road

Experts say most accidents that happen on the road are the result of driver negligence. It doesn’t take an expert to figure that out. After all, you’ve seen the usual suspects on the road. There’s “Mr. Cell Phone Talker” who’s oblivious to everything not attached to his ear. There’s “Ms. Eye Shadow Applicator” who’s trying to finish that last dab of Purple Sunrise before she hits the brakes. But with all of these offenders, the worst may be the good old-fashioned “rubbernecker.”

These are the drivers that slow down…way down… to see what everyone else is doing and what’s going on. In the process, they almost cause a wreck of their own. If there is one thing you could say to these people, it would be, “Keep your eyes on the road!”

The business world is full of these rubberneckers, too. What you do in your car is one thing, but in your business, everything can fall apart if you start taking your eyes off the road.

Here’s what I mean: In the past week, I’ve gotten several calls that started with, “My competition is this and that.” While it’s a good idea to keep an eye on your competition from time to time, it should be in your rearview mirror as you zoom past them on your way to success.

Before you get too concerned with what your competitors are doing, pay attention to what you’re doing. Keep your eyes on the road.

When Business Owner Bob gets caught up in what the competition is doing, here’s what happens: Bob starts paying more and more attention to the competition. Eventually, he stops doing what made him successful in the first place and he starts mimicking the things he thinks the competition is doing to succeed. Unfortunately, what he doesn’t see is that the competition only looks successful. Behind the scenes, that competitor is probably struggling to pay the bills, attract clients, and keep his doors open. The worst part is that Bob won’t realize this until he’s in the same shape. If he’d only stuck to what was working in the first place, he’d be in the fast lane.

It’s all about balance. You should keep an eye on your competitors to see what they are up to, but don’t get stuck staring as they zoom past you.

In the end, remember that competition is like death and taxes. It’s always there. Just expect it to be there and don’t waste your productive time worrying about it. You only have the same 24 hours a day that the competition does. Make the most of them! Don’t get caught rubbernecking on the road to success.

Silent Phone Syndrome

We recently received a question from a contractor.  Here is the question and what our suggestion was for him:

Q:  My phones are colder than the winter weather has been.  How can I get my phones ringing again?

A:  Spring is right around the corner and so are better times for your phone, but you don’t have to sit around and wait for your phone to start ringing when you need calls.  Here are a few quick ways to get your phone ringing when you need it most:

  • Pick it up – The great thing about a phone if that it works both ways! Pick it up and start dialing.  If you need calls, call your current customers with a special offer.  If you haven’t seen them in a year or more, it’s probably time for an inspection to ensure their comfort and safety, so make them and offer they can’t resist.
  • Revisit the past – Chances are, your team has seen and recommended some work in the past month or two that hasn’t been given the green light by clients.  Go through your past invoices and call any homeowners that turned down recommendations.  Offer them a special incentive to take care of the work today!
  • Knock, knock – Don’t depend on the phone when you have an advertising army in the streets.  Have your technicians knock on doors and offer tune-up or inspection specials.  Leave special offers on doors.  If your phones aren’t ringing, keep your teams busy looking for additional work.
  • Send out your secret weapon – This only works if you keep track of your advertising results.  If you do, you can see what piece draws the best response.  Print that one up and mail it out.  Track your results so you know what pulls in calls when you need it most.
  • Call in the clubs – If you have maintenance agreements, the slow times are the perfect time to schedule their annual inspection or tune-up.  You give them great service and they provide work to keep your team busy.  And while your team is in the home, they might notice something else that could help that homeowner.

Those are just a few quick ways that you can combat “silent phone syndrome” and get your company hopping again.

Making Easy Money at Your Desk

It’s a slow day in your company.  Everyone is dragging as that empty callboard stares you in the face.  It’s getting close to quitting time, and everyone is just ready to put this sales-killing day behind you.

Suddenly, your best technician walks through the door.  He has a hint of a smile on his face like he knows something you don’t.  He walks right over to your desk and puts a piece of paper down on the desk.

You pick it up slowly, expecting a resignation letter after such a slow day, when you realize it’s an invoice.  And not just any invoice.  It’s a $10,000 day-saving invoice!

Your technician just made a $10,000 sale!  You jump out of your chair and give the man a huge bear hug.  Everyone cheers!  The day is saved by the $10,000 sale!

And, it is great, but just how great is it really?

If you’re like the average contractor, you’re operating at a 3 to 4 percent profit margin.  In that case, that $10,000 monster sale netted you a whopping $300 to $400.  Not so exciting now, is it?

But here is what’s exciting.  You can gain that $300 – the profit equivalent of a $10,000 sale – and more just by making some simple tweaks from the comfort of your desk.  These profit-minded tweaks don’t require you to step foot in a truck, put in any extra hours, or even take on an additional headache.

These are stress-free dollars that drop right to the bottom line.  To get them, you just have to start buying right, and here are four simple ways to change your buying behavior so that you’re earning $300 to $400 in savings without lifting a finger:

  1. 1.     Grab the discount – The easiest way to grab those savings is to pay your bills in time to grab any early pay discounts your suppliers might offer you.  If you have this option, take it!  Even if it requires some extra cash flow management, it’s worth it.
  2. 2.     Work with low levels – The second strategy is to keep your stock and inventory at a low level.  This saves you the expense of the space needed to house that inventory, lessens the chance that those parts become obsolete, and limits your exposure to shrinkage.  Bottom line – it saves you money.
  3. 3.     Pass the hassle, keep the savings – The best option is to have someone else manage your inventory altogether.  If you can work with your supplier or manufacturer, you may be able to get involved in a virtual inventory management program where they manage your inventory and you only pay for parts as you use them.
  4. 4.     Buy smarter with a little help from your friends – This one is huge.  The biggest impact you can have on your bottom line is by buying smarter at the lowest prices possible.  Even if you’re a $1 million company, you can buy lower.  Chances are there is a $5 million guy buying at even lower prices.  And even if you’re a $20, $30, or $40 million dollar operation, there are $400 and $500 million dollar companies getting deals you wouldn’t believe.  It all comes down to the power of numbers.

The only way for the independent contractor to get the same power of numbers is to band together.  Roofers’ Success International® can help you do just that.

When you can consistently save $300, $400 or more by buying right in your business,  you’ll feel like you are tripping over the $10,000 sales every day because those savings will drop right to your bottom line every time you make a smart buying move.

Start buying smart and start earning the extra profits you deserve.

What’s Your Story?

Are you a good storyteller? Are you able to keep customers interested in what you have to say while presenting them with stories that drive home the points you’re trying to make?

Storytelling is a distinct skill, and it’s one that you should practice to perfect because people will forget facts and figures the moment you walk out of their home. However, if you can make the same point with a story, they’ll remember it forever.

Stories stick with us because our brains are hard wired for stories. We thrive on emotions and sensory information and that’s what stories provide and what facts lack. A list of bullet points about why your company is the best doesn’t have any emotions for the homeowner to grab onto. As a result, they won’t internalize or remember them. But if you can present a story about how your company provided outstanding service or how you backed up your guarantees, they’ll remember it. Not only will they remember it, they may tell their family and friends, too.

While stories are an important element for success when you’re selling in the home, that’s not the only place where they can have an impact in your company. As the owner or manager, it’s important that you grasp the concepts of stories and put them to work for you too.

For starters, what is the story of your company? When you are talking to members of the community at an event or simply out on the town, do you have a story prepared of what makes your company great?  Remember, facts aren’t memorable, so simply having a bullet point list of what you offer isn’t the same as having a compelling story about what makes your company great.

This is a great way that you can use a story to help your company stand apart from the rest. Create a story based around a service call where one of your team members went above and beyond the call of duty. Create a story based around a time where you stood behind your guarantees and made sure that the client was satisfied with the service you provided. That story will be much more memorable than just telling someone that you have a money back guarantee.

People buy based on emotions and knowing a story about the company they choose will make them emotionally invested in that company and its people. Get them invested in you by crafting a compelling story about your service.

But as the owner or manager, the clients aren’t the only people that you want invested in your company. You want your team to be invested too, and stories can help you sell the vision of your company to your team.

Where do you want your company to be in five years? Whatever your vision may be, you’re going to need your team to help you get there. But they have to want to get there too, and getting them to buy into your vision starts by creating a story of what that vision looks like.

Instead of just saying, we’re going to have three locations in five years, you can create a story about how their lives will change in five years when you have three locations. How will the town be different? What will people say, and what will people do? Stories have characters, dialogue, details, and a lesson, so create one that drives home your vision, and your team will be on board. Plus, they’ll have a story to remind them of the vision as the years go by.

Those are just a couple of examples of the difference that storytelling can make beyond the home. It’s an important element of sales that your team…and you…should master!