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April ♦ 2018


 In This Issue...

The Price Is Right...Or Is It!  [Tom Grandy]

Your Team's Financial Health [Dave Ramsey]

Get Your Techs Started Off on the Right Foot [Tom Grandy]

Planning For Profit: Workshop locations available  [Grandy & Associates]

Profit University Audio Series: The Power of Listening [Tony Alessandra]  




The Price Is Right...Or Is It?

by Tom Grandy

Sales up, profits down?  It’s frustrating to work hard all year while watching sales increase, and then at the end of the year find out you didn’t make any money!  Yes, that is frustrating.

Decreased profit can be caused by a variety of things but more times than not the root problem is improper labor pricing…from a cash flow perspective.  It’s not necessarily that management didn’t re-evaluate costs and increase pricing.  The foundational problem is often overlooking significant but forgotten about “real” costs of doing business.

Just to be sure your pricing in correct, let’s review a few key areas that are sometimes overlooked. 

  • Depreciation vs. Equipment Replacement Costs – Depreciation is an accounting term that takes the purchase price of a piece of equipment and allows the company to write off typically 20% of that value each year.  Is that enough to replace your equipment when the time comes?  Absolutely not.  Equipment replacement cost needs to take the place of deprecation in your pricing model.  Equipment replacement looks at how many more years a piece of equipment will last and then estimates the replacement cost at that point in time.  The future cost is than divided by the remaining number of years BEFORE replacement.  The resulting number takes the place of depreciation in your pricing model.  Equipment replacement dollars are typically 30%-50% HIGHER than depreciation.  Is that eating your profits?
  • Non-Billable Time – Non-billable time is time the technician is paid for that cannot be directly charged to the customer.  Non-billable time is AM/PM shop time, travel between jobs, trips to the parts house, vacation, holiday, and sick time.  It also includes callbacks, company meetings and warranty work.  For a typical service tech non-billable time is about 50% of what they are paid.  Installers normally have non-billable time in the 20-35% range.  This is normally the company’s single highest cost of doing business.  Have you included that cost in your overhead pricing model?  If not, it’s eating your profits!
  • Loan Payments – If you have a $500 loan payment of which $400 is principle and $100 is interest, do you know what shows up as a cost on your P/L statement?  Only the interest is shown as an expense.  The other $400 when into never-never land.   If your company has a lot of loans, this situation may help explain why sales are up but profits are down.  Be sure the full amount of the loan payment (principle and interest) is in your pricing model, not just the interest.  If you don’t include the principle payment in your pricing mode it too will eat up your profits!
  • Debt Repayment – Do you owe money on your line of credit to a supplier or to Uncle Sam?  Are you paying back borrowed money to friends, family, or an investor?  If you are paying off past debt, 100% of that money comes straight out of your profit…one of which is shown as an expense on the P/L statement.  If you are paying back debt be sure to include that debt repayment, dollar for dollar, in your cash flow pricing model as an expense.  Failure to include debt repayment will result in paying off debt from current profits.  That will eat up your profit.

These are just a couple things to think about in your pricing model.  If you include them, you will be priced to actually SEE a profit at the end of the year.  Failure to include the above items will result in having a really great sales year…with little profit to show for it.

Need help with proper pricing?  Grandy & Associates’ industry acclaimed Labor Pricing for A Profit software can help.  Simply enter the data (including the items we just talked about) and the software will create profitable pricing by department.  It also creates month-by-month cash flow budgets for tracking, sets proper residential/commercial maintenance agreement pricing, and let’s the user price a job in a matter of minutes based on your costs of doing business. 

 Website Special

The Why Do We Need To Charge So Much? is this month's Website Special and has two versions: 

CD Version which is identical to the online version, with interactions, quizzes and a certificate of completion.  This CD is perfect for companies that want multiple employees to take the program without the need to use the internet. OR the DVD version: 

DVD version is designed for group discussions.  It leaves out the interactions and quizzes to make it ideal for group training in your company. You can view any section of the program in whatever order you choose.  It is perfect for company meetings or weekly tech breifings as each section takes only 10 minutes or so to review.  The DVD also includes an Instructor's Guide to assist you in conducting the training.  This handy guide contains ideas and questions to help direct the discussion and engage the audience. The software normally costs $99.95 but this month it’s 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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Your Team's Financial HealthDave Ramsey Headshot

By Dave Ramsey

Seminars that teach employees how to handle money are a dime a dozen. The problem is if you rely on most of them to meet the needs of your employees, you will get dime-a-dozen results.

A successful financial wellness program should have several key attributes. It must be easy to follow, and it should serve your employees over time in order to create lasting behavior change. A quality program will also have a proven track record for sustained success, plus it will provide you and your leadership team with statistics showing the real, practical difference it makes in people’s lives.

As a small business owner and leader, the power to select a financial wellness program – one that will bring lasting success to the financial lives of your team members – is in your hands. Take a moment, and read over a few of the other attributes I believe are crucial to consider when choosing a financial wellness program. 

Flexibility and scalability

 

A good program will meet your employees where they are. Your company may have multiple locations and different shifts. This can make facilitating classes a huge challenge. Employees need a program that is available online, any hour of the day or night. Online programs also provide a layer of privacy. It can be tough for someone to talk about a money situation when they’re surrounded by co-workers in a classroom or workplace setting.

Continuing education and review

One or two lunch-and-learn sessions a year is not enough financial education for your employees. The program should offer material that helps them learn over time so they can form good money habits.

Someone who is in the midst of paying off debt doesn’t need to worry about investing just yet. They are better served if they can go back and reference that material when they are out of debt and ready to build their nest egg.

Personalization

People have different needs depending on where they are in life. Whether they are married, having a child, nearing retirement, or just starting out, a good, comprehensive financial wellness program will have components that address each person’s specific needs.

Studies show that employees perform better, and are happier overall, when they don’t have the stress associated with financial worries hanging over their heads. A quality financial wellness program can be a huge blessing to your team members, while improving the overall health of your company! 

*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 13 million listeners each week on more than 585 radio stations and multiple digital platforms. Follow Dave at entreleadership.com on the web.

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Get Your Techs Started Off on the Right Foot

By Tom Grandy 

None of us have all the answers.  Learning from others can expedite the process and increase the learning curve.  Below are a few tips from my friend, Steve Toburen on getting techs started on the right foot.

It’s a lot of work to recruit, interview, hire, orient and train a new employee. And that’s just the beginning!  So obviously we want the very best people (VBP) to stick around.   Over time I’ve realized my truly loyal (and very best) employees had ‘bought in emotionally’ to my company. Yep, just like with your customers, it is all about ‘the relationship’!

When should you start this essential employee relationship? During, and immediately after, your hiring process when you stage manage the new hire’s first few weeks. Here’s how to do it…

During the Hiring Process - Focus on your company’s 'curb appeal' and business image. Simply put, the VBP want to work for the ‘Very Best Company’!

Before Hiring Full Time - Have your best candidates work with you for a day or two BEFORE they quit their current job. (Even better, test them out as an ‘on-call’ or part-time tech.)  This ‘Trial Hire’ can save a lot of heartaches - on both sides.

Get Their Family on Board - After formally hiring a new employee (not before!) ask, “So, do you have family? Kids?” Invite the whole bunch out to lunch with you and your family and after lunch offer, “Would your kids like a tour of where Dad will be working?” This will pay off big time in building the relationship.

Do an Immediate Meet-and-Greet – When the new worker walks in for their first day hang a big ‘Welcome Aboard’ banner, hung specially for them!  Have all your employees applaud and make introductions during a coffee and donut time! 15 minutes maximum and it is back to work!  

Now It’s Mentoring Time - Pre-assign a mentor/trainer to the new employee so they can be walked through the process of how things are done at their new home. 

Web Site Special

The Why Do We Need To Charge So Much? is this month's Website Special and has two versions: 

CD Version which is identical to the online version, with interactions, quizzes and a certificate of completion.  This CD is perfect for companies that want multiple employees to take the program without the need to use the internet. OR the DVD version: 

DVD version is designed for group discussions.  It leaves out the interactions and quizzes to make it ideal for group training in your company. You can view any section of the program in whatever order you choose.  It is perfect for company meetings or weekly tech breifings as each section takes only 10 minutes or so to review.  The DVD also includes an Instructor's Guide to assist you in conducting the training.  This handy guide contains ideas and questions to help direct the discussion and engage the audience. The software normally costs $99.95 but this month it’s 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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Planningforprofit 2 Dayworkshop

 

Planning For Profit: Workshop locations available on our web site

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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Profit University _Audio Series

 

The Power of Listening

By Tony Alessandra

Short Presentation Description:

Good listening tends to draw people to you.  Poor listening tends to cause people to drift away.  This presentation is full of dozens of tips on how to become a better listener.

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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WHY DO WE CHARGE SO MUCH?

 

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April 2018

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The Power of 

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Tom Grandy, Founder

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Self -Paced Online Training Icon -Revised 12-2016

 

Grandy & Associates offers several different products that can help train you and your staff.  We now offer Self-Paced Online Training.  Currently we have more than ten training modules available.  Each module typically takes only about an hour of time out of your day but keeps your staff current on their training.  Check back often for additional modules as our library is continually growing! 

 

 

 

Why Charge LOGO

The Why Do We Need To Charge So Much?  DVD version is designed for group discussions.  It leaves out the interactions and quizzes to make it ideal for group training in your company. You can view any section of the program in whatever order you choose.  It is perfect for company meetings or weekly tech breifings as each section takes only 10 minutes or so to review and helps explain to your team all that is involved in your pricing.  

 


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