In Search of the “Magic Pill”
Written by John and Vicki LaPlant
This topic makes me think of Indiana Jones played by the great Harrison Ford…you know, Han Solo of Star Wars. Indiana Jones is a professor always looking for the challenge of what no one else had discovered. He survives a lot of difficulties from Nazis to snakes, always in search of the coveted prize.
A number of HVAC, Plumbing, and Electrical contractors are also in search of the prize….it could be sales volume, profitability, industry recognition, selling the company for “BIG BUCKS” as an exit strategy, or creating a family legacy company. Regardless of the desired goal, we consistently hear, “I have done all I know how to do and the needle just does not move. Tell me what to do, just fix it. It is wearing me down so just fix it and make the pain go away.
Just fix it with no more angry customer, employees that actually show up for work, employees that do not whine, employees that do not look like they have been dumpster diving, vehicles that keep running, money in the checking account so I can get a night’s sleep and make payroll, some real time with my family, and suppliers that are not hounding me for payments. Just Fix It!!!”
Make no mistake about it, the contracting industry can beat a person up to the point of being black and blue and gasping for air but….only if you let it. Now, the operative phrase is “If you let it.” It is time to take a stand. Join the movement of professionals. This is not for the timid or unprepared. It is not for those unwilling to ask for assistance from available resources. And, those resources are out there. It is OK to ask for help.
If help is not sought, the vicious circle continues with little or no planning, budgeting, branding, no culture building, no prioritization, and no energy for pushing change in the existing business model. And, let’s face it; if a business is not moving forward then, it is going backward. There is no neutral position because cost structures, employees, customers, and products are constantly changing.
You might ask, “So what about that ‘Magic Pill?” Where can you get the prescription? Fortunately, it is readily available, and it is not comprised of some new expensive formula. In fact, it is not even experimental, because it has been successfully taken by numerous successful HVAC, Plumbing, and Electrical contractors everywhere. It boils down to three actionable items:
- The cost recognition system must be right. The chart of accounts must be management focused, departmentalized with allocated overhead to produce an income statement that management can use for making profitable decisions. This is concerning pricing decisions and implementing processes that increase efficiency and reduce costs. The purpose of a management income statement is to provide the information management needs to maximize the profits of the company. It is the tax account’s responsibility to figure out how to legally reduce the amount of taxes paid.
- Pricing must be profit maximizing for the company and allow for different gross margins by department and different overhead recovery for each department.
- Lead generation must be the primary focus of everyone in the company. Marketing must be planned and implemented for 52 weeks a year. Everyone in the company needs to understand who the customer is and constantly be looking for that customer. The marketing must target that same customer through digital marketing, direct mail, outbound calling, and neighborhood marketing. Trucks must be wrapped and stand out in the market. The branding used in the marketing must be consistent so everything associated with the company has the same look and feel. A set of emergency marketing campaigns must be on the shelf, ready to go when inevitably sales do slow down. The key is to own the address, own the neighbors, own the block, own the neighborhood, own the subdivision, and own the zip code.
This is the 1 – 2 – 3 step prescription to making a significant difference in the success of your business. If these three pills are swallowed, it will cure and be the “fix it” of a good number of business ills. You will be able to positively focus on future growth and profitability. And the best thing about these three pills; they actually encourage the spread of an infectious disease throughout your company and employees. And that disease is called: SUCCESS.
Service Roundtable is dedicated to growing your bottom line and helping your business maximize its full potential. These group of contractors work together to assist you with marketing, sales, business, and so much more. Twice a month, seminars around the United States and Canada are held to network and further assist your business. Visit Service Roundtable.com to see if there are Success Days in your area!
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