April ♦ 2019
In This Issue...
Start Your New Employees Off Right [Bill Kinnard]
If Anything Has Changed In Your Business [Tom Grandy]
Mistakes and Solutions [Dave Ramsey]
Reward Performance You Wante Repeated [Tom Grandy]
Planning For Profit: Spring/Fall Workshop schedule and locations announced [Grandy & Associates]
Profit University Audio Series: Loving, Engaging, Understanding and Motivating Your Millennial Workforce [Susan Frew]
Managing Your Business
Start Your New Employees Off Right
by Bill Kinnard
Because of the challenge of getting new employees up to speed in your company, we are pleased to announce we are offering HVAC Onboarding through our Grandy Live online instructor lead classroom. The program is 8 hours and specifically designed to help you prepare your new personnel for the job. And better yet, there is no travel. They will attend right from your office. This isn’t a webinar. It’s a real class led by one of the Grandy instructors. Students will be engaged, can ask questions, and will need to pass a quiz to be sure they learned the concepts we are teaching.
We will focus on:
- Understanding major and minor system components: What are the parts and pieces that work together to make a comfort system function.
- The importance of proper system design and installation.
- Efficiency requirements and their role in our industry.
- Why IAQ is such a big part of HVAC?
- Comfort controls: Let’s face it, they do a lot more than just read temperature.
- We will also explore why there are so many system options, and the benefits of offering higher efficient choices to your clients.
Sessions will be conducted over a consecutive two-day period. Session 1 will be on Monday afternoons from 12:00 PM - 4:00 PM Central time, and Session 2 will be the next day, Tuesday morning from 9:00 AM - 1:00 PM Central time. Whether your new team member will be working the service counter, answering the phones, or is an aspiring installer or comfort consultant; this class will be a spring board to a successful career in HVAC.
Hear what past attendees have said:
"Very to the point. I am new to this field, so this is a really solid foundation of the basics of what is going on in the HVAC industry. It gives me the basic understand to build my future career upon. I really enjoyed it."
"I thought the entire seminar/webinar was worth every minute I spent watching it. I was in the HVAC industry 25 years ago and have only been working as a Home Comfort Advisor for 3 months so this was very intuitive. Thank you."
For more information regarding this training, please visit our web site HERE.
If Anything Has Changed in Your Business, Your Pricing Needs to be Adjusted
When it comes to business, little things mean a lot. You are not the same company you were last year or even a month ago and things will definitely be different this time next year. As time goes on, the cost of doing business change. Changing costs are a fact of life, the question is "How will the company respond to the change?". When all is said and done, one of two choices will be made whether you are aware of it or not.
Choice Number 1 (unconscious)
When small changes in the cost of doing business take place most companies simply ignore them. The thinking is "It's a small change, no big deal. Sales are up so any change in the cost of doing business will easily be absorbed." That kind of thinking might be ok for small changes like stamps going from 48 cents to 50 cents or property taxes increasing $150 per year. It doesn't make sense when workman's compensation goes up $3,000 per year or the office manager gets a $2,400 annual raise.
Choice Number 2 (conscience)
Wise business owners and/or managers understand the foundational law of doing business. "If any cost of doing business changes, it is going to affect our bottom line profitability." What's the bottom-line effect of workman's compensation going up $3,000 and/or the office manager getting a $2,400 annual raise? If pricing is not adjusted, the bottom-line profit of the company is going to DECREASE by a total of $5,400. Yes, those changes do affect the company’s bottom line profit.
Let's think about a few common annual cost increases that most companies experience every year. To keep it simple, we are going to limit our thinking to the three-man service department. Keep in mind the principles apply to every department within your company.
- Salary Increases - The service manager and dispatcher each receive a $150/month annual raise. That totals $3,600 per year.
- Drug Testing - The company decides to begin random drug testing throughout the year. Cost to the Service Department is $300/year.
- Parts Cost increase 10% - The average service tech sells roughly $20,000 in parts cost per year. That cost increase alone is going to total $6,000 ($20,000 X three techs X 10% = $6,000).
- Maintenance on Vehicles - The three service vehicles are getting older. Average maintenance costs are estimated to go up $200/vehicle or $600 per year.
- Miscellaneous Increases - Now think about increases in workman's compensation insurance, office supplies, gasoline, uniforms, tech wage increases, bad debt, interest on your line of credit, and a whole host of other costs that go up on a pretty regular basis each year!
A New Way of Thinking!
Begin to think in terms of dollars per hour charged the customer. Force yourself to think about how every extra dollar you spend is going to affect the hourly rate you charge the customer. Your three service techs are going to bill out roughly half their hours each year or roughly a 1,000 hours each. Your company has three service techs, which means you will bill out roughly 3,000 hours per year. The increase in parts costs alone was $6,000 per year. That increase will REQUIRE the company to increase the hourly rate by $2.00/hour ($6,000 / 3,000 billed hours = $2.00/hour) assuming the company wants to maintain current profitability.
Try to go through this simple exercise BEFORE you take on any additional costs. Grab a calculator and divide the potential new cost, or cost increase, by the current number of annual billed hours you have in the department.
For example, let's say you are considering purchasing a new truck for one of your service techs. That new truck will create an additional monthly loan payment of $734/month or $8,808/year. Now, divide the additional $8,808 by the 3,000 billed hours per year. That means if you are going to purchase that new vehicle you better be ready to increase your hourly rate by $2.94/hour in order to cover the cost and maintain profitability. This simple process will apply to any additional cost, of any amount, that occurs during the year.
This process explains why all companies need to create a projected annual budget for the coming year. This process will capture "all" projected additional costs and be the foundation stone for setting proper hourly rates in each department.
If you, as the owner or manager, have difficulty understanding what to charge the customer that means your techs are likely in the dark when it comes to understanding why you charge what you charge. There is good news! This month’s Website Special is our industry acclaimed DVD entitled “Why Do We Need To Charge So Much?”. This simple DVD (comes with a workbook to lead the class) explains in simple language the basic costs of doing business and therefore why the company needs to charge what it charges. The DVD/workbook normally sells for $99.95 but this month it’s yours for only $79.95. Order today!
Like all our products, if you are not 100% happy, simply return it for a full refund no questions asked.
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Mistakes and Solutions
by Dave Ramsey
Being a leader is a lot like writing a novel. Everyone thinks they can do it, but few do it well. Fortunately, leadership is a skill that can be learned. And the most common way to learn and gain that necessary experience is by making big, whopping mistakes. Earning a Ph.D. in mess-uppery is an essential part of your business education.
Many of the lessons I teach are culled from mistakes. We made a mistake, that mistake caused us pain, and we vowed to never make that mistake again. Believe me, mistakes are painful in the business world. Learning from them is crucial to winning.
Less painful is learning from the mistakes of others. With that spirit in mind, let’s look at a few of the most common leadership mistakes and problems, along with solutions for fixing them.
Fear of failure
A small amount of fear is a healthy thing. It motivates you to leave the cave, kill something, and bring it home. But when it paralyzes you, it's a huge problem.
The solution: First, recognize that you are fearful and your concerns may be well-founded. A bad decision could cause you to be sued, or lose money, customers, and team members. But you can't let that possibility control you. The best way to kick fear right where it hurts is to come up with a system to deal with it. Setting deadlines, gathering facts and options, and working out the worst-case scenario are just a few examples of steps you can take to get over your fear.
Get it right, not right now
One of the biggest mistakes business owners make is hiring too quickly. Often, they’re desperate because they need someone, but quick hires usually do nothing but create more problems down the road.
The solution: Take the time to find the perfect person for the job. Get the right people on the bus. At my office, people are run through the gauntlet before they’re hired. This includes at least four interviews, a personality test, and a meet-the-spouse session. The result of all that scrutiny is a company full of rock stars, and an incredibly low turnover rate.
The “nobody does it better” syndrome
Yes, I know. It's your baby, and no one can treat it as well as you. But micromanaged employees are unhappy employees. They will often leave, simply because they don’t want to endure the constant, intense scrutiny. In order for your team members to grow and become stronger, you have to let go.
The solution: Step back and let your team fly, no matter how nervous it makes you. Trust them! You were impressed by these people, and you hired them for a reason. Stop micromanaging, and allow them to perform to their full potential.
There is an exception to this rule, however. When someone first joins my team, they are heavily micromanaged until they prove their competency and integrity. I call this “training.”
The mistakes above are just a few of the most common. But there are many, many more you'll discover on your own. Just remember to learn from your miscues, and never let mistakes hold you back. George Bernard Shaw once said, "A life spent making mistakes is not only more honorable, but more useful than a life spent doing nothing."
* Small business expert Dave Ramsey is CEO of Ramsey Solutions. He has authored numerous best-selling books, including EntreLeadership. The Dave Ramsey Show is heard by 15 million listeners each week on more than 600 radio stations and multiple digital platforms. Follow Dave at entreleadership.com on the web.
Reward Performance You Wante Repeated
by Tom Grandy
Johnny simply will not make his bed each day. The parents has three options.
Yell at little Johnny again tomorrow until hopefully he catches on.
Give up! Johnny will never make his bed so stop trying and hope his future wife can get through to him.
Reward performance you want repeated. Mom and Dad could provide some kind of positive incentive for making his bed. That can be anything from a pat on the back to a monetary reward. When I was growing up a spanking worked pretty well! That may not be a positive incentive but it worked.
Incentivizing techs is a similar process to little Johnny's parents. Reward performance you want repeated. In the world of technicians, base rewards on performance. Setting specific goals is Step One. A tech will never hit a goal that was not set, so set a goal. When the tech meets or exceeds the goal, reward them. That can be extra pay, time off, a tool allowance, or anything that might be of specific interest to that particular technician.
Children are all different and so are technicians. What is an incentive to one may not be to another. Get to know each tech and find out what their likes and dislikes are and customize the reward to that specific individual.
Web Site Special
If your technicians do not believe in your pricing, they will tend to under charge the customer. There is good news when it comes to solving that problem. This month’s Website Special is our industry acclaimed DVD entitled “Why Do We Need to Charge So Much?”. This simple DVD (comes with a workbook to lead the class) explains in simple language the basic costs of doing business and therefore why the company needs to charge what it charges. The DVD/workbook normally sells for $99.95 but this month it’s yours for only $79.95. Order today!
Like all our products, if you are not 100% happy, simply return it for a full refund no questions asked.
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Planning For Profit: Spring/Fall Workshop Schedule and Locations Announced
Planning For Profit seminars are two-day workshops held around the country and are in-depth training on how to significantly increase profitability.
You will learn exactly what you have to charge per hour to cover costs while generating the profits you want. The program will also create month-by-month, department-by-department cash flow budgets, set proper residential and commercial maintenance agreement pricing, and let you bid jobs for profit (based on your cost of doing business).
Attendence to these events are limited and space is still available. Learn more and register today!
If a workshop isn't scheduled for your area, we encourage you to talk to your Distributor to see if they will be sponsoring a workshop in your city!
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Loving, Engaging, Understanding and Motivating Your Millennial Workforce
By Susan Frew
Short Presentation Description:
Millennials are the workforce of the future. Over a million baby boomers will leave the workforce over the next 3-5 years and millennials will take their place. With that in mind, we best find a way to understand and motivate them in the workplace. That is what this presentation is all about.
Listen to a sample of this months' program! The Profit University Audio Series features a new trade focused audio presentation every month. These programs are designed to provide the trades contractor relevant information that can help their business immediately. Get more information on this program or sign up for a monthly subscription today.
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