You Are Running Out of Time to Change Your Business!

Cut Back or Not to Cut Back?

Choose Not to Participate in Today's Economic Mess!

I recently read an article written by another consultant discussing the economy today and whether or not cutting back, or shrinking your business is a good idea. The writer mentioned that if you cut back you may potentially lose customers and this would result in your competition taking them and gaining a customer, who over a lifetime may generate $30,000 to $50,000!

I do agree that you do whatever it takes to keep customers, however, common sense has to prevail. For example . . . In my business I was able to successfully reduce annual overhead costs by almost $100,000. This was done by eliminating staff, using technology and moving back into my house rather than renting an office. Because of the reduction of overhead, I was able to increase my margins while also reducing my workshop fees to my clients by about 15 to 20% for most of my classes and only charging a premium for those resort locations that cost me more. The result in lowering price was an overall increase of my customer base and an increase of year to date revenues by over 28%. I also enjoyed a reduction of overhead of almost 35%. I am enjoying the best year I have ever had since I started business sixteen years ago. I have more money for new business ventures and I also gave myself a nice raise.

Hey, I'm all about doing everything you can to grow business and do whatever it takes to get every customer. But, things are very different today, you need to be smarter and you need to find better and faster ways to do business. For example here are some things you need to look at:

• Streamlining operations; What stupid things happen everyday in your company that add no value? What could you eliminate or change right now, today, that may save a few dollars everyday? Ask your team for cost saving ideas and reward them for the best ideas.
•Find poor performers; fix them or fire them. Look through my blogs for a 10-step process on handling this.
•Focus on a particular customer type; this means you have to decide to turn away some business. Think about this . . . Does the same customer who regularly shops at Walmart also make regular shopping trips to Bloomingdales? Most likely not. However, both places are successful. You need to decide what type of client fits your profile and focus on them.
•Is there anyway to reduce expenses enough to be able to offer reduced prices or specials for your customers? (I know, I am the guy who told you that you need to raise your price and now I tell you to lower it) I am looking at increasing margins by reducing expenses first. Once that happens you should pass along some of the savings to your customers. That's what I did.
•You are not Walmart and never will be! Occasionally either during one of my classes or one of the online forums, I'll get someone saying something like "Walmart is the cheapest and look how succesful they are" Walmart has the luxury of being the biggest and they tell their vendors what to do and how to price their products. There is only one Walmart. When you get big enough to tell General Electric, Carrier, Lennox, Trane, Watsco, American Standard, etc. what to do, call me and I'll help you write a book on how you did it.
•Don't be afraid to raise prices for premier services.
You're probably wondering what this means. Well, if there is anything special that you offer, IAQ surveys, moisture migration analysis, load calculations, building envelope analysis, etc. etc. that no one else does in your area, you should be paid more. You are the expert, they are not.

Decide today to not participate in this slow economy. Make changes within your business and the way you do business to make your organization more streamlined, more efficient and the best and fastest in your market. Let your competition decide to sit and try and wait it out while you take advantage of this time to be the best you can be by adjusting to change and re-engineering for the future. There is no better time to start than right now. Bigger does not necessarily mean better.

So you think your team needs training?

This morning while going through my emails I happened to read a request for help on the Service Roundtable. (By the way, if you want some great information and help in your contracting business, check them out at serviceroundtable.com, I highly recommend joining and tell them I sent you) The request came from an HVAC Contractor asking if anyone could recommend some customer service and sales training for his people. Naturally some folks responded with some recommendations for training available.

Since I have a training management and training development background, a bunch of questions developed in my head.
Why do you think you need training?
What event caused you to realize you need help?
Did you determine the root cause of the event that made you believe you needed training?

Is there another solution that could resolve the issue without having to do training?
Is it a lack of knowledge and training that is the culprit?

When I managed the training department at GE I regularly had managers from around the country call and say "I need someone to come here and train my people on _____" I would either send one of my people or visit the location myself to attempt and make an assessment of the situation. Most of the time I found that the problem was really not a result of lack of knowledge or training.


So many people, especially managers look at training as the cure for a problem. Keep in mind, training, education, learning or the communication of information is done solely to provide an employee with the knowledge to do their job. You would provide training based on the idea that they did not have the information or knowledge to do the job. So, if you had an employee that had a lack of motivation, training can not solve your problem.

There are five reasons why employees do not perform well and only one of them is a lack of knowledge or training. The other four are:
The employee has no idea what you expect from them
A non-work related problem is distracting them
The employee is not suited for the job
The employee doesn't care

Before you go buying a training program or having someone like me come in and charge you thousands of dollars, take a look at the other options and really focus on what brought you to the point of believing you need help.

One of things that I always ask clients before I start developing a training program for them is "What specifically do you want your people to do differently after going through the training?" Even if it is a list of things, I'm okay with that. Now we can look at the root cause of the problem and go from there.

I look at it this way, let's say you get headaches everyday and you take tylenol several times a day to eliminate the pain. Does this mean your headache is a result of the lack of tylenol? This is what I mean by getting to the root cause.