SBM #56 Delegate not Abdicate

Delegate not Abdicate

 

Every business has lots of moving parts. By default, an owner must have a wide ranging skill set if they hope to achieve any success with their enterprise. Those skills include, but not limited to, sales, marketing, human resources, bookkeeping, production and administration.

Of course, at the onset, we as owners tend to do all these activities. But as your company evolves, and demands on your time increase, you need to seriously consider getting out from under all of those responsibilities. Doing so, would free you up to focus on what you do best as an individual and allow the company to grow.

Fortunately, for many of these areas mentioned, you have choices on how to free yourself from these tasks. You can either hire someone or, outsource those activities to a freelancer. Either way, the end result would be to unburden yourself.

What to give up

What to give up or delegate varies with each entrepreneur. But be aware, there is a fine line between delegate and abdicate. Let’s face it, your enthusiasm for the various roles in your company range from, enjoyment to sheer torture.

What I have found is that we tend to keep doing the things that we’re comfortable with, regardless if it’s a good use of our time, and eschew those things that we don’t like, or have little knowledge.

One of the very first areas that entrepreneurs can’t wait to get rid of is bookkeeping. Heck, some don’t ever do it. They just outsource it right from the beginning and are glad to be rid of the responsibility. Too be fair, it can be a little tedious and many of us just don’t have the patience for administration.

Ignoring powerful information

This is also a great example where delegation turns into abdication. When questioned, most owners simply answer that they don’t understand it, or it’s too complicated. Although it is primarily a record keeping function, what I find absolutely amazing is how little attention some owners pay to this area. For many, they are quite content to run their businesses blissfully ignorant of the powerful information contained within the available reports.

Far too often it takes a crisis to get the entrepreneur to take notice and by that time it may be too late to save the company. These crisis usually take the form of missed government remittances, seriously overdue account payables or worse, a nasty case of fraud. But more often than not, it’s simply a matter of inattention that’s built up over an extended period of time.

Maintain oversight

Delegating doesn’t mean never having to deal with it again. It simply means letting someone else take care of the day-to-day activities. For instance, if you used to spend eight hours a week on something, you can now reduce your time to an hour a week simply reviewing the other person’s activity. You still must maintain oversight and ultimately remain accountable for the results.

All areas of a business can be delegated but successful entrepreneurs stay sufficiently engaged to know exactly what’s going and avoid surprises

Delegating is mandatory if you want to grow your enterprise. It frees you to rise above and plan for the future. Just remember though, delegate not abdicate.

You may also enjoy Delegating is easier than you think

Copyright © Greg Weatherdon 2017

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SBM #55 – Are You Ready?

Are You Ready?

 

 

 

 

 

 

 

 

 

The economy is humming along and your sales are doing just fine. As a matter of fact, things are actually pretty good. That’s why this is exactly the time you should heed that famous Boy Scout motto to “Always be Prepared”. Great advice, but be prepared for what?

Every seven years

On average, there is an economic downturn of some sorts every seven years. Sometimes a little longer, sometimes a little sooner, but seven years on average. Yet when they do happen, most owners seem to get caught totally off guard.

A slowdown, a recession, a depression, each one a little more serious than the other and each one can hurt your business. The trick to minimizing it’s impact, is to do a quick walkaround of your business. Much like every pilot does before takeoff. Why? Because when business is reasonably good, we tend to get a little too comfortable and take our eye off the some of the details.

We stop paying attention to the regular everyday expenses like the wireless phone bills, the internet or the various insurances policies. Or maybe we’ve let our receivables stretch out a little longer than we used to. What about overtime? Is anybody paying attention to it? Is it justified?

What would you cut?

What would happen if your revenue dropped by 20% -30% tomorrow? What expenses would you need to cut? How quickly could you do so? Most individuals can’t answer these questions because they just don’t know.

Making time now to review all your expenses is time well spent. It allows to rationally think things through, instead of being in crisis mode. Doing so now gives you time to explore all the alternatives available to you. For instance, can you use the postal service instead or a courier service? Does that package really need to get there the next day? Can you email invoices instead of mailing them?

If you have delivery or company vehicles, are you getting discounts on fuel by using a corporate fuel card? These cards give you a discount on every litre or gallon of fuel purchased. Over the course of the year this can really add up. If you haven’t been using them, now is the time to get them. Just remember, it’s easier to get credit when things are good?

No one noticed

One of the things I did when I first started out and continued with each startup, was to avoid lunch meetings. By scheduling client meetings before or after lunch, I avoided having to buy a prospective client lunch that I could ill afford. Later on, I would enforce this practice with my staff every time the economy took a downturn. It was easy to do and no one ever noticed. When things got better, we would selectively reinstate lunches.

Are you ready?

Using this kind of benchmark helps you focus on those extraneous expenses that have quietly crept into your business over the past few years. When, not if, a downturn comes, the last thing you want to be doing is trying to generate new business and cut expenses at the same. Doing it now, let’s you answer the question of – Are You Ready?, with a resounding yes!

Copyright © Greg Weatherdon 2017

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Creating conditions that will grow your HVAC company

Originally Published In Snips Magazine October 2017

First Aid

A common theme with HVAC sales professionals is their profitability or, more precisely,
the lack thereof.

It’s not that they’re sitting around. Most have a steady workflow, but profits are elusive. In those cases, the first place to look is their pricing model. Commonly, many don’t have a formal model or template, yet have managed to stay somewhat competitive in a highly competitive environment.

So assuming their pricing is reasonable and expenses are in line, what could be the problem?  Digging into the operational side of the organization often uncovers what can be called “profit killers.” When you consider how competitive the HVAC business can be, minimizing waste — whether in manpower, materials or service region — is tantamount to increasing profitability.

What is meant by critical mass? Critical mass, in this context, is nothing more than concentrating your service area in a tight geographic zone. Why? When you consider the operating costs of your service vehicles can range between 75 cents and $1 a mile, it doesn’t take long to appreciate the potential savings. These rates exclude labor, so every mile driven can get very expensive when you add everything up.

What’s the problem?

The genesis of the problem usually harkens back to the start of the business. When a business first opens, owners take every piece of business they can and try to generate revenue. The attitude is that every order is a good order. Owners have bills to pay, and they don’t have the luxury of being too selective.

However, as the business matures and stabilizes, too many don’t change their thinking and continue to take every piece of business that comes their way — no matter where it is. Why mess with what works, right? Unfortunately, maintaining this attitude can become quite expensive when left unchecked.

Another catalyst that compounds the problem is that countless owners often get convinced by a marketing company that for just a few dollars more they can blanket a whole city or region with their promotional message instead of focusing on a tighter geographic area. It’s a good pitch. Who wouldn’t want more exposure? But it comes at a cost.

Consider that you probably pay your technicians for seven to eight hours of work per day. How many of those hours are actually billable to customers? Probably closer to five and many times less. A disproportionate amount of the difference is lost to travel time between calls, but it doesn’t have to always be this way. What if you could increase your billable hours by just one more hour a day? This could generate upwards of $20,000 in additional revenue per technician (200 days times $100 per hour). This is where the concept of critical mass comes in.

How and why

So how do you apply the idea of creating critical mass? Start by identifying where most of your business is coming from. A simple exercise of mapping out the postal codes of your customers will show where your customers are concentrated. You’ll most likely see clusters of customers in specific areas — a critical mass. The opportunity is to further enhance your presence in these key areas. If you are spending money on promotions, now is the time to target these key areas with increased frequency. This targeted approach can result in a much higher awareness than a citywide initiative.

Here’s another simple example of how creating critical mass can help your business development. Many HVAC companies use lawn signs to advertise during installs or upgrades. Having multiple signs throughout a neighborhood creates a powerful awareness for your company. Prospective customers regularly seeing your service vehicles on their streets also sends the message that you must be good because everyone uses them. Lastly, generating critical mass in specific areas helps word-of-mouth. (For more information on word-of-mouth, check out “8 statistics you should know about word-of-mouth,” July 2016 Snips).

To be sure, every city and every business is different. Rural-based operators have different challenges than those in large metropolitan areas. However, driving long distances between calls or sitting in traffic still costs you money.

Where focusing on only one area is not feasible, an alternative way to create critical mass is to consider limiting your service to certain areas on specific days of the week. For example, service the northern suburbs Mondays, the western communities Tuesdays and so on. Of course, this excludes emergency calls.

In such a competitive environment, you need every advantage you can get. Tightening up your service area and creating critical mass will go a long way to increasing your efficiency and putting more money in your pocket at the end of the day.

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