We are all familiar with the definition of insanity: doing the same thing over and over again while expecting different results. So the question is, do you have 30 years of experience — or one year of experience repeated 30 times? Wise, profitable companies review past performance, make necessary changes, and move forward.
2016 is now behind us, and most should have a year-end profit and loss statement to review. Although profit is an important indicator of how a company is doing, there are many other areas that need at least an annual review. Evaluating performance and making changes will have a dramatic positive affect on your bottom line. Let’s create a list of items to review.
Maintenance Agreements
Total number
Do you have more, or fewer, maintenance agreements in place now than a year ago? It doesn’t matter if the number went up or down; the question is why, and what you are going to do about it.
Profitability
Are your maintenance agreements profitable? If not, what are you going to change for the coming year to correct the problem?
Who is Selling Maintenance Agreements?
Did office staff or your technicians sell most of your agreements last year? How can each group be encouraged, or trained, to increase sales?
Debt
Make a physical list of every dollar you owe. That includes payables, loans, lines of credit, supplier debt, back taxes owed, credit card debt, personal money the company owes you, etc. Total the dollars owed and see how it compares to what you owed last year. Is your total debt increasing or decreasing? This can be a real reality check.
Turnover
How long have your employees been with the company? Are they productive in their respective jobs? I love the way Dave Ramsey puts it: You need the right people on the bus AND each person needs to be in the right seat on the bus. Two questions to think about here:
If there has been a lot of turnover the past year (office or field), the team needs to ask why. If you are unaware of the source of the problem, it’s difficult to fix.
Are all staff and techs productive in what they do? Relationships tend to mess up good business decisions. Translated: Keeping unproductive employees will eventually hurt the entire company. Over the years, I have found most everyone is really good at something. Keeping an unproductive person not only hurts the company but also limits the individual’s potential. Sometimes the best thing for an unproductive employee is to be forced into another position, in another company, where their unique skills can be utilized.
Do You Have Meaningful Information to Manage With?
What information flows into your hands on a daily, weekly or monthly basis? Is the report or information helpful, or is it wasting your and others’ time? What new, productive, information would you like to receive this year?
Sales Closing Percentage
Track the close rate for your salespeople and/or yourself. Are your teams’ closing percentages higher this year than last? Why, or why not?
Review Rewards Programs
What incentive programs are provided for your staff and field labor people? Employees tend to work more productively when goals are set and rewards are provided. Rewards can come in forms of a bonus, time off, a trip, tickets, dinner out, etc. Be creative!
Training
What kind of training did you provide last year? This can be technical or customer service training for techs. What courses, seminars, webinars or conferences did you and/or your staff attend? Continuing education is important. Just being away for a few days can refresh the body as well as the spirit. What was productive in the past? What are your plans for this year?
Systems
What is the status of documenting your systems? Write down the steps for everything that takes place within your company (who answers the phone and what they say, how to process a credit card, paperwork trail when a job is sold, etc.). Have each individual employee document everything they are responsible for within their position. One day, they may be sick or absent for an extended time, and someone will have to fill in. Documenting all of your systems will take months, if not years. Have you started this process and if so, what is the status?
Receivables
What did your total receivables look like this time last year verses now? If receivables aren’t growing, find the source of the problem and correct it.
What Have You Done For Your Customers Lately?
Your current customer base needs to be touched four to five times a year. Are you doing that and if not, what will need to change for the coming year?
Community Involvement
Company image within the community is important. What has the company done this past year to get involved? Remember, the community is your current and future customer base. What plans do you have to get involved this coming year?
Changes in Marketing
Have you made changes in your marketing strategy this past year? If so, are you seeing results? What needs to change?
You might want to consider having a team meeting to answer the above questions. Chances are, new ideas will arise to benefit everyone in the company. Reviewing past performance is important as a springboard for future change. Remember: if you aren’t growing, you are dying!
