The Pete Rose Principle

The Pete Rose PrincipleFor those of you who do not know who Pete Rose is or who never saw him play, I am only sorry that you did not get a chance to watch this icon of American baseball in action.  Unfortunately, today he is best known for the accusations of gambling that led major league baseball to ban him from the sport in 1989.  Regardless however, when you watched Pete Rose play baseball, you knew you were watching someone who truly enjoyed the game.  If Rose drew a walk at the plate, he didn’t saunter to first – he ran.  His aggressive baserunning style included distinctive headfirst slides.  He played in the major leagues for 23 years, amassing 4256 hits, still a record in MLB.  His lifetime batting average was .303.  All this earned Pete Rose the nickname, “Charlie Hustle.”

 

That’s interesting, you say, but what does that have to do with anything?  It is relevant because The Pete Rose Principle is one we can learn from and apply to our work life, regardless of what that work is.  Success does not always go to the smartest, the most highly pedigreed, or the most polished.  History is full of such examples.  People like Harry Truman, Ulysses S Grant, Steve Jobs, Vincent van Gogh, the list is virtually endless.  Like Pete Rose, these individuals had flaws.  However, they also had an overarching passion for achievement, rising to the top of their chosen field of endeavor.

 

What are some of the lessons we can take away from these individuals to benefit our own lives?  I believe the following five items are key elements of The Pete Rose Principle.

  1. Lifelong learning. So, you graduated from technical school, college etc., now what?  That’s not the end of your learning, that’s just the beginning.  Technology is revolutionizing the world we live in, and that is certainly true of the HVAC industry.  Embrace the concept of continuous learning, lifelong  This will keep you moving along in your career when others have stalled, because they did not embrace this concept.
  2. Passion for what you’re doing ~loving it. During a game in the 1970s, Pete Rose was running in to the dugout at the end of an inning.  Astroturf was a new phenomena in baseball, and Pete was practicing his skill at dribbling a baseball all the way in to the infield.  Passion is something you feel, and something others can see.
  3. Willingness to work hard. This is one of the major traits that tends to cull the herd over time.  People who are willing to work hard go further than people who are not.  You cannot force people to work harder, and you can only incentivize them to do so for a short period of time.  Ultimately, people either want to work hard or they don’t, and it can be a main differentiator for success.
  4. Flexibility and adaptability. We live in a global society, and the pace of change is accelerating at an increasing rate.  What worked yesterday won’t necessarily work today.  Hierarchical organizational structures are giving way to collaborative work teams.  If you are not flexible and willing to adapt to change, you will most certainly be left behind.
  5. Persistence – don’t quit. “Colonel” Sanders submitted his fried chicken recipe to 1009 restaurants before finding a buyer.  Henry Ford was bankrupted, and left penniless five times before founding the Ford Motor Company.  Thomas Edison discovered over 1000 ways he could not build a lightbulb, before he found success.  After high school, Steven Spielberg was rejected from the University of Southern California’s School of Theater, Film and Television – not once, but three times!  After attending another university, he dropped out and pursued directing without a degree.  Persistence is an attitude, one that is born out of the first four characteristics listed above.

 

Your career may never land you in the Hall of Fame, but the Pete Rose Principle embodies traits that bode well for individuals throughout a lifetime.


Attention golfers in Minneapolis and Chicago

Members Of The Callahan Roach Team From The First Foundation Golf Tournament In 2010

Members Of The Callahan Roach Team From The First Foundation Golf Tournament In 2010

If you love playing golf and you love helping people, we have the perfect opportunity for you!  As you may or may not know, Callahan Roach Business Solutions is an avid supporter of the Joseph Groh Foundation, and has been for many years.  Who is the Joseph Groh Foundation, you ask?  This foundation is a 501©(3) organization that was founded in 2009.  The founder, Joseph Groh, was a 35 year veteran of the HVAC industry prior to being paralyzed from the shoulders down due to a bicycle accident in 2008.  He started the foundation to provide financial assistance to those who had worked in the construction trades, and who are now living with a life altering disability.  Four generations of Groh’s family either have, or currently are making their living in the HVAC and construction trades.  They are one of the few, and perhaps the only foundation that is dedicated exclusively to helping people who have a connection with the construction trades.  To date, they have provided $500,000 in grants to 54 people in 26 states.  Grants typically take the form of wheelchair accessible vans, home & bath remodels or rehabilitative and assistive technology equipment.  For more information about this foundation, please visit http://josephgrohfoundation.org/.

 

The foundation relies primarily on the three golf tournaments they host every year for their financial support.  It is these golf tournaments that provide the funds for grants given out by the foundation.  One tournament is held every spring in Dallas, Texas.  The other two are held in late summer/early fall in Chicago and Minneapolis.  Upcoming dates for these two tournaments are:

Minneapolis: Monday, September 10 at The Links at North Fork in Ramsey, Minnesota.

Chicago: Monday, September 24 at The Highlands of Elgin in Elgin, Illinois

 

If you live in the Chicago or Minneapolis area, and work in one of the construction trades, (HVAC, plumbing, roofing, electrical etc.) you should really consider playing in one of these events, although you do not have to work in the industry in order to play.  Either way, you can sign up to play in these tournaments by going online to the foundation website listed above.  If you work for a company and have budget responsibility, the foundation invites you to become a tournament sponsor.  Many levels of sponsorship are available, you can see them on the foundation website by looking at the tournament brochure shown on the golf page tabs for each city.

 

Callahan Roach Business Solutions has been an enthusiastic supporter of the Joseph Groh Foundation since its’ inception.  Together with the foundation, they invite you to come on out for a fun day of golf in order to support a great cause!


What Do You Do When Someone Doesn’t Do

A manager who fails to address sub-par performance becomes the problem, not the employee

What is a manager or business owner to do when someone on your payroll is not doing their job?  Of all the aspects of a managers job, this can be one of the most difficult to handle.

 

If the individual is in a performance base role such as a service technician or salesperson, the issue of underperformance will surface fairly quickly.  In the case of a salesperson for example, it could show up as revenue which doesn’t meet plan, a closing ratio that is lower than it should be, underperforming on accessory sales such as smart thermostat/humidifier/air cleaners etc.  For a service technician it could be running fewer service calls than the average for other techs, excessive callback rates, underperforming on ancillary sales such as smart thermostats, duct cleaning, high-efficiency filtration, etc.  For office staff, it may take a little longer to identify underperformance, because their jobs are not as quantifiable.  In either case, the underlying causes – as well as ultimate solutions – are essentially the same.  Regular performance reviews based on empirical measurements are key to properly correcting underperformance issues in the workplace.  Casual and intermittent observation coupled with managerial opinion is not an acceptable substitute for a properly designed and executed performance evaluation system.

 

The first step with an underperforming employee is to figure out why they are underperforming.  That involves sitting down with the employee, and having a conversation about the performance, letting them know it is sub-par.  The manager needs to ask the employee for their assessment of why performance is sub-par, and what they think is needed to improve it.  For many managers, this is the toughest thing to do.  They do not want to confront an employee, and they may even feel inadequate about having a performance related discussion with the employee.  If a manager shirks their duty in this regard, then they become the problem, not the employee.  For the basis of this column, assume that is not the problem.  If the manager determines that the employee need training, it should be scheduled as soon as is reasonably possible.  Following the training, post training measurements should improve.  If not, training may not have been the main problem all along.  The manager may determine through observation as well as conversation with their employee that the individual whose performance is not meeting the mark is in the wrong job, either because of skill, temperament or other form of suitability.  The manager should determine if there is another job which the employee is better suited for.  Before making the change in responsibilities however, the manager needs to make sure the employee is able and willing to do what it takes to be successful in the new job.  It is critical to understand causality for underperformance by an employee.  If an employee is not motivated in their present job, you won’t see an improvement in their performance until you get at the underlying reasons as to why.  The same is true if they are not happy in their job.  Remember the character Hermey the elf in the show, Rudolph the Red Nose Reindeer?  He was not happy in his work at Santa’s workshop, so he ran off to be a dentist.  As a manager, you may have to help the Hermey’s in your business become happy in their work, whether that is in your firm – or somewhere else.

 

You may have an employee who is underperforming, yet is an individual who has excellent formal education and can articulately explain reasons for their underperformance.  Red flags should go up if their reasoning is explained in terms of someone else’s or the system’s fault.  They may have let it be known that they do not like, or do not have confidence in their manager.  These type of employees may be the toughest of all to deal with when it comes to underperformance related discussions.  As their manager, you must not back away from your responsibility, even if you lack self-confidence in having that discussion or it makes you unpopular.  You may have an employee who just doesn’t want to do the job, even though they are clearly capable.  Irrespective of the reasons why, you ultimately have to terminate an underperforming employee, so they can go elsewhere and find a place where they will be happy in their work.


Bad Mouthing the Competition

Should you ever badmouth your competitor?  Of course, everyone says no, and this is backed by virtually all of the business research on the subject.  Okay then, done deal.  Wait, not so fast.  It’s not that easy.  Anyone who has been in sales for any length of time will tell you that there is always a particular competitor or two that just gets under their skin.  Perhaps that competitor is cheaper, perhaps they are larger and seem to have so many more advantages, and perhaps they even badmouth you.  So, how should you handle these situations and what disciplines do you need to bring to the task?

 

Bad Mouthing the Competition

 

First, the disciplines.  Bad mouthing the competition arises from frustration, an emotion that, while understandable, is under your control.  You have to decide who is going to be the adult in the room.  If you decide that you are only going to talk about your competition in a professional manner, you have to communicate that to everyone of your sales people, service people, office staff… in essence, everyone in your company who talks to the public.  Now for the hard part.  You have to demonstrate that in your behavior every single day.  As we said above, it’s not that easy, but you can establish a culture to this effect as long as you demonstrate leadership, fortitude and persistence – even in the face of potentially outrageous behavior by your competitor and their salespeople.  “That’s fine,” you say… perhaps a bit sarcastically.  So just how do you do this?

 

First, realize that this consumer has contacted you because they have a problem that is, as of yet, unresolved in their mind.  If they had full faith in the competitor that was bad mouthing you, they would have already made the purchase.  That sets the table for you to show the consumer how you have solved this/similar problems for other customers in the past.  Second, don’t merely be dismissive of your competitor.  If you are, you are being dismissive of this customer.…  which does not help to build trust in their mind with your organization.  In addition, you are losing a great opportunity to create an image of your competitor built in the likeness of your choosing.  Your company’s marketing people, with the involvement and approval of senior management, should put together and regularly update a narrative about each of your major competitors that helps potential customers better understand the differences in a way that clearly differentiates your company.  Anyone in your firm who touches the public in any way needs to be thoroughly familiar with these narratives.  What are the elements of this narrative?

  • When your customer tells you about your competition and/or about what they have said about you, first take a deep breath. Then, instead of responding directly, talk about your company on a philosophical level.  Tell the customer why your organization went into business and how you view customers in general.  For example, you could tell a customer that the owners of your firm were frustrated by what they saw as a lack of problem-solving/professionalism/whatever it might be in the geography served, and they went into business in order to understand every single customer’s needs so they could respond professionally and appropriately to those needs.  This is a critical step.  It is much more important for all your customers to understand what your organization stands for, rather than see how you will respond to a tit-for-tat bad mouthing game.  In a manner that is as honest as you understand it, explain how this contrasts with what you understand to be your competitors focus.  For example, your philosophy might be to first understand your customer’s situation in its entirety before you begin to apply solutions.  That would include understanding the health of their duct system, the integrity of the building envelope, the operating effectiveness and efficiency of all mechanical equipment, the health of the indoor environment etc.  Explain how your philosophy is to keep a customer for life, working with them over time to make their home as efficient and comfortable as possible.  Your competitors focus for example, might be to respond to demand service calls, fix the customer’s immediate problem and move on.  There is nothing inherently wrong with either approach, but it sets the table for you to differentiate your firm.
  • Next, provide general examples of why your approach is superior. For example, talk about customers whom you first came into contact with because of a problem they were having, and how your relationship over the years has benefited this customer by solving problems the customer never knew they had, which led to a big improvement in their overall satisfaction.
  • Finally, pivot to this customer situation. Demonstrate not only how you can solve the immediate problem, (which is likely the only one your competitor talked about) but also show the customer some things they can do to improve their environment/efficiency etc. now as well as some things you can work with them on over time to mitigate future problems/improve their indoor environment/reduce their operating costs etc. down the road.  Done correctly, your customer likely won’t even be thinking about your competitor at this point.

 

In the end, all the consumer really wants is to have their problem solved at a price they can afford, (notice I did not say the cheapest price) by a company they feel they can trust.


Undermining Your Leadership

Undermining Your Leadership

This Is How Your Employees Feel When You Engage in These Types of Behaviors

Have you ever found yourself engaging in behaviors which, upon reflection, you believe might be undermining your leadership in the minds of those who work for you?  Undoubtedly you have, most of us would admit to doing this at one time or another.  What are some of the most egregious of these?  Consider the following common examples.

 

Upon asking for or receiving the suggestion of an employee, immediately shut down further discussion by stating that it won’t work and going on to give your opinion as to why it won’t work and why your ideas are better.  This behavior will cause some of your group to be intimidated, and from then on they will tell you either what you want to hear or nothing at all.  Employees who consider themselves knowledgeable will be angered by this approach, and they may decide you are not worthy of further suggestions.  Either way, credibility in your leadership is weakened.

 

Using humor in an inappropriate way.  Sometimes, those interested in a leadership position might try to use humor to better bond with their employees.  When used genuinely and appropriately, humor can be an excellent way to help build positive relationships with those who work for you.  If you constantly use humor however to show how clever you are, it may have the opposite effect with some employees.  The use of inappropriate (off-color etc.) humor is always, of course, inappropriate.  The use of acerbic humor, especially when it is seen as ridiculing, teasing or even bullying, will have the effect of leaving employees drained and disheartened.  If such humor leaves employees believing you’re trying to be mean, it can them lead to discount your leadership entirely.

 

Asking for input and then doing nothing with it.  This signals to individuals that their ideas are really not valuable and it won’t be long before they quit providing meaningful and heartfelt feedback.  This is different than not using every suggestion that is solicited, as no leader is obligated to use every suggestion they receive.  Not using sought after input might the your employees to believe you are unable to make decisions.  This can quickly cause your employers to lose their respect for as well as their confidence in you.

 

Providing feedback or being critical of your employees in public.  This should not even have to be mentioned, yet you see examples of it all the time.  I knew one such manager who would wait until he heard the suggestion of an employee he wanted to make a public example of, then he would leap upon that individuals suggestion as an example of what was wrong in the organization or with that particular employee.  Today they would call such behavior bullying, and there is no place for that in a workplace worthy of your participation.  Similar to this is keeping your composure.  The same manager I mentioned above would come into a meeting and sit as far away as possible from the rest of the group.  He would immerse himself in the Wall Street Journal and wait until he heard something he didn’t like.  He would then slam his paper on the table, march to the front of the room and take over the meeting.  Losing your temper, calling people names and using negative emotion to make a point not only sabotages your credibility, it also causes your employees to not trust or respect you.  Furthermore, employers who tolerate this type of behavior are not worthy of your employment.  In today’s environment, there are simply too many companies who are looking for dedicated and talented employees to continue working for an organization that tacitly supports such perverse behavior.


The Ultimate in Indoor Comfort

When your business receives a call for service, what does your technician do?  Do they just go out and make the repair that the homeowner needs, or do they also make note of conditions needing attention?  Do you see your company as being in the HVAC business or the indoor climate business?  If you’re in the HVAC business, you typically make the required repairs during the service call and check out the system to make sure it is operating correctly in all other areas.  If you’re in the indoor climate business you do this as well, and you also take note of conditions relating to filtration, energy efficiency, temperature, control systems and humidity.  Note that this involves more than just the heating and cooling system, it also involves the building itself.  An acronym to remind yourself of this is FETCH.  (Filtration; Energy efficiency; Temperature; Control Systems; Humidity)  “But I don’t want my service technician to be a salesperson,” you say.  Well, that’s the thing.  They don’t need to be.  All they need to be is observant, and make note of all of the items contained in the acronym.  Let’s look at each of these in a little detail.

 

Indoor Comfort Involves A Lot More Than Just HVAC

Indoor Comfort Involves A Lot More Than Just HVAC

 

Filtration: Ask the homeowner if they have allergies.  Note if they have any animals, if there are lingering odors or if it looks dusty in the home.  Make note of what type of filter they have on their system, and what condition it is in.  Also make note of the condition of their evaporator and condenser coil, to make sure they are not blocked by debris.

 

Energy Efficiency: Capture the model and serial number of the furnace, evaporator coil and condensing unit.  From that you can determine equipment size and age, matching compatibility and energy efficiency ratings.  Also make note of basic envelope issues affecting thermal efficiency such as the amount of insulation in the walls and attic, whether or not a radiant barrier is present, general condition of the windows, the square footage of the home’s footprint and the home’s age and geographic orientation.  (North/South/East/West)

 

Temperature: Ask the homeowner if there are any areas of the house which are hot or cold during winter or summer.  Also asked them if they are typically comfortable where the thermostat is currently set, and make note of that temperature setting.  If they complain of inadequate cooling, make note of the load conditions that might be causing that.

 

Control Systems: Make note of the brand and model of thermostat they have in their home.  If it is a setback type thermostat, ask the homeowners if they make use of the program in the thermostat to save energy.  Also asked them about their general occupancy schedules.  Keep in mind that according to one recent study, only 30% of the people who have a programmable thermostat actually use them and 23% don’t have a programmable thermostat at all.

 

Humidity: Take a humidity reading in the home, and make sure that the device you’re using is regularly calibrated.  Ask the homeowner if they feel comfortable when the air conditioner is running or if they get shocked during the winter, knowing that humidity levels can be a factor in home comfort during both winter and summer weather.

 

Just think of the powerful information you can gather about a homeowners needs just by making notes and asking a few basic questions.  This only takes a few minutes of the technicians time, but the information gathered is invaluable in helping your company build a relationship with that consumer based upon their specific situation and needs.  In the future when you contact the consumer through your marketing efforts, you will be helping them open their eyes about targeted solutions for needs they may not have consciously recognized.  The consistent application of this process will help you FETCH more lifelong consumers for your business, and all of it starts with the technician simply paying attention during a routine service call.


Does Your Business Stand out?

Does Your Business Stand out?

 

Stop me if any of this represents a shocking revelation.

1. People are not overjoyed to spend money on HVAC systems or repairs

2. Oftentimes, consumers focus on price because they don’t value this purchase

3. Most people don’t know who to call or trust for HVAC related purchases

 

These three facts can make life as an HVAC contractor difficult, especially if your business does not stand out from dozens of others in your trade area.  “We have great people,” you say.  Get in line, everyone else says that as well, whether it is true or not.  When is the last time you heard a contractor say, “Our people are iffy?”  Most likely, never.  This article is not about marketing channels.  You know you need to market your business through your website, through social media, through your service department, through targeted media etc.  This article is more about the message.  If you were to ask 100 consumers to name an HVAC contractor and state in one sentence what they stand for, I’ll bet less than 5% can do so.  Consumers are not tuned in to messages from our industry, so you need to find, for lack of a better word, a “hook” for your message.

 

Like many people, I have the TV on in the background as I am getting ready for work in the morning.  I normally have it programmed for the CBS morning news in order to try and keep up with what’s going on in the world.  There are two HVAC contractors who regularly advertise on this program.  The only reason I even pay attention to this is because I work in the industry.  One of the contractors makes it very clear that their business is all about good service.  The theme of the commercial, the visual images and their tagline all emphasize the same thing – that they deliver great service.  In all honesty, I cannot tell you what the other contractor stands for.  I see pictures of their warehouse with rows of furnaces and air conditioners stacked high, but that’s really the only take away I have from this commercial.  Perhaps their message is that they can respond to your needs very quickly because of their inventory, or perhaps that’s an image trying to reinforce some other message.  The point is, I don’t really know.  I catch these ads like other typical consumers, in bits and pieces, and I do not stop to watch more intently when they come on.  If that is the quick take away from someone who is in the business, imagine the impact on the typical consumer who is not really interested in spending money on our products in the first place.

 

The point here is to consciously think about whether or not your business stands out from all the other choices available to consumers.  What is your vision, your passion for your business?  How can you clearly and succinctly communicate that through the various channels your message travels in?  Solicit ideas from people in your company, your service techs, your installers, your office staff.  Look at other consumer related businesses for ideas, it is not necessary that you reinvent the wheel here.  Once you have defined that hook, make sure everyone in your business is aware of it – and delivers on it.  Every single time.


Inappropriate Communication

Inappropriate CommunicationGiven the title of this article, let’s first be clear about what we are writing about.  We do not speak here of communicating inappropriate things, rather we are talking about using a form of communication which is inappropriate for its purpose.  Once upon a time and not that long ago, there were two primary forms of communication.  You could either talk with someone face-to-face, or you could write them a letter if they were far away.  It is pretty easy to assess nonverbal cues and emotions when you are speaking with someone face-to-face, but it is more difficult when you are writing.  Perhaps that is why that letters were pages long back in the day, because people wanted to make sure their meaning was completely communicated.  There was typically no inappropriate communication, you either spoke to someone or wrote them.  One form was not substituted when the other was appropriate.  When the telegraph came along in 1844, it dramatically sped up long distance communication, but due to its expense, was not a substitute for a letter.

 

Perhaps the first electronic device that allowed for inappropriate communication was the telephone.  Invented in 1876, there were literally millions of American homes that had a telephone by 1910.  With the telephone, you could deliver unpleasant news in a way that allowed you from having to actually see that individual, while simultaneously making it easier to terminate the conversation at a time of your choosing.  The addition of voicemail made accomplishing that task easier yet.  In the past 30 years, numerous additional forms of communication have been added to our arsenal.  Email came first, and by making phones smart we made them ubiquitous.  Throw in videoconferencing and social media and you have a virtual communications cornucopia!

 

Why is it now that we have more ways to communicate than ever, communication has become more difficult than ever?  There is certainly no shortage of communication going on, go to any restaurant and observe families gathered around a table where all of them have their heads buried in their phones.  I have heard people say that their millennial offspring only communicate on Facebook or text, that it is pointless to send them an email or try to call them.  I even know one individual who is completely paralyzed, with no use of his hands.  Yet people who know he is paralyzed still send him texts!  Perhaps what is needed is a communications primer.

 

Such a primer would start by distinguishing between when to use verbal and when to use written communication.  Verbal communication is typically best used when you need to convey context associated with a message.  Verbal communication allows you to use elements of nonverbal communication, tone and intonation in order to strengthen elements of your message in a way that written communication cannot.  Additionally, verbal communication is the only method to use when you need immediate feedback from the person to whom a message is being sent.  Never substitute a text or an email when what is needed is a conversation.

 

Written communication is best used when a one-way delivery of facts is required.  The beauty of written communication is that it does not take as much time on the part of the receiving party to get the message , and you have a record of what was communicated.  Our time is the most precious commodity we all have, so using in person communication when written is appropriate can be a waste of everyone’s time.  Written communication is also the most appropriate form to use when you are sending a lot of detail, such as a proposal or technical document.  The most difficult thing to communicate in a written document is context.  People may take your message in a completely different light than the way you intended it.  Perhaps that is the reason for the rise in the use of emoticons, although they may not be appropriate in a business setting.

 

There is obviously no one correct way of communicating with someone, but as a society we seemed to have lost some awareness of what may be appropriate in different situations.  The correct method of communication depends completely on the situation calling for its use in the first place.  Perhaps the best way to choose the appropriate form of communication is to put yourself in the shoes of the one to whom the communication is intended.  A major part of being an effective communicator is the use of good judgment regarding the type of communication utilized.


That Floating Price Point

Chances are if you are a medium to larger size business, you have defined what type of organization you strive to be and what that means relative to pricing your products in the market.  For example, you may strive to be a leading-edge provider of the best products and solutions, and your pricing is targeted to yield a specific return, regardless of the competition.  On the other hand, you may have decided that all products are essentially commodities, and you strive to be the low price leader to the point of your target margin.  If however you are like many thousands of small businesses, you have never formally defined what type of organization you want to be, nor have you determined any type of pricing strategy for your business.  You simply bid each job as it comes, using some type of pricing mechanism that you believe will yield a profit.  This column is aimed at this last group, because there are a few proven things you can do to improve the profitability of your business relative to pricing, and it doesn’t take a Harvard MBA to implement them.

1. Define Your Overall Business Strategy.

This doesn’t have to be complicated, but it sets the tone for everything else you do.  For example, you may have gone into business for yourself because you thought you could do it better than how you have seen it done, and you thought in the long run you could make more money.  You would like to someday sell your business, and have it be attractive enough that someone would want to buy it.  Other than that, you just want to be competitive and make a good profit.  So, define what is a “good profit.”  Is that 1%, 5%, 10%?  You have to answer this question.  Consider that someday when you sell your business, someone will want to know what kind of profits it generates, whereby they might be willing to pay 5-7 times earnings for that business.  If your business is only generating 1% or 2% net profit, you may end up having to sell it strictly for the assets.  It’s a good idea to talk with others in your industry before committing your answer to paper, do not shortcut this step.

2. Understand Prevailing Prices in Your Market

Who are your main competitors?  What do their prices look like relative to yours?  It is important to understand the market in which you operate relative to your overall business strategy.  If you are like the business described above and you are in a medium-sized or larger market, figure out which competitors are most similar to yours in terms of your business strategy and understand where they price their jobs.  Perhaps you plan to offer a good-better-best product strategy, so make sure you are comparing apples for apples when you look at prevailing pricing in the market.

3. Determine Your Target Market

Do you want to do jobs anywhere, or is there a specific area you want to concentrate your efforts in?  Chances are, you intrinsically know the answer to this, so define it in terms of specific ZIP Codes, and areas within those ZIP Codes.  You can base this on the age of the housing stock along with a variety of other demographics easily available.  (I.e. age of homeowners, household income etc.) Focusing your efforts on the customers most likely to fit your overall business strategy enhances your ability to be successful.  This is also an essential step toward developing a targeted marketing campaign.

4. Develop A Pricing Strategy That Fits with Your Overall Objectives

Perhaps you have decided that you essentially want to have an “everyday price” strategy as defined by margin goals by class of product.  You are willing to negotiate within reason, but you want to spend the limited amount of labor hours you have on jobs that yield your target margins.  Given that, you might plan to run occasional promotions, essentially one time deals to entice customers at certain times of the year or to throw off your competitors.  If you have a good-better-best product offering, you could price it in such a way that higher-end products or solutions deliver commensurately higher margins.  On the other hand, you could “sandwich” your pricing in such a way as to drive the consumer toward the solution in the middle category.  The point is, there are a number of ways to accomplish the same objective.

5. Do Job Costing

It is imperative to know how much you made on each job relative to your objective, and why.  This allows you to make the necessary corrections in order to make sure you are achieving your ultimate objective.  There are many places you can go to get help putting in systems to accomplish all this, and they don’t have to be complicated.  They just require a commitment on your part to make it happen!

 

Images courtesy of egyptinnovate.com & aviationbusinessconsultant.com


Did You Fail the Interview?

Did you fail the interview?

Image courtesy of wiki how

Remember, you are not the only one who is conducting the interview. According to LinkedIn Business Solutions, 65% of candidates say a bad interview experience make them lose interest in the job.

Interviewing is one of those subjects that everyone has an opinion about, because anyone who has ever worked (which includes just about everyone) has been through one.  Most of us have been through more than one interview in our lives, which likely means we have experienced both good and bad interviews.  This refers to the quality of the interview, not to our performance in them.  Unfortunately, it seems like attention paid to the interviewing process is lacking by many of those conducting them.  For one, the interviewing process is all too often handled in too casual of a manner, and is not approached from a planned or analytical point of view.  For example, if the person conducting an interview is the one who happens to be available at that moment in time, consider your firm guilty of failing the interview!  Other cardinal sins of interviewing include the interviewer talking too much, winging it when it comes to asking questions, not writing down and keeping a record of the candidate’s responses and not being clear it when it comes to articulating next steps with the candidate.  So what should you be trying to accomplish in interview and what are some steps you should take to make sure that is accomplished?

The objective of the interview should be formally defined by the interviewer in advance, and stated to the interviewee at the beginning of the discussion.  For example, you might tell the interviewee that the objective of the interview today is to better ascertain the candidates skills and fit for the opening available, and to allow the interviewee to find out more about both the company and the position so they can better decide whether it is a good fit for them.  If this is only an initial interview, make sure that is clear at the outset.  All persons from the company who plan on interviewing the same candidate should briefly meet before hand to discuss their strategy.  There is nothing to be gained by having multiple people ask the candidate the same or similar questions.  For example, one person might drill down on the candidates education and experience, while another might probe how they have or would handle real or theoretical situations.  The point is to find out information that you cannot discern from looking at their resume.  Following that, the interviewer should keep the following in mind as the discussion progresses.

  1. Allow sufficient time for the interview. If you rush the interview because you have too many other things going on, that will send major negative vibes to the candidate.  Remember, you are not only taking time out of your day for this process, but also time that the candidate could be productively looking for a job elsewhere.  If you are not prepared to spend a sufficient amount of time on the interview, reschedule or don’t hold the interview at all.
  2. Your job is to learn more about the candidate, not to tell them all about the position and how great the company is. Generally speaking, the interviewer should talk 20% of the time and listen 80% of the time.
  3. Give serious thought to your questions before hand and have them written down. You should be asking open ended questions that will elicit conversation, not those that lend themselves to yes/no or pat answers.  Having the questions written down keeps you from straying too far off course, and it communicates that you take both the candidate and the process seriously.  On the other hand, you want to be flexible enough to pursue a line of questioning if it is merited.  If you ask a question that elicits concern or further questions in your mind, spend time following your concern until you are satisfied. Jot notes down regarding the candidates responses to them, because a week later you are not likely to remember key elements of the candidates answers.  In addition, these notes will be extremely important if they are needed for reference prior to/during a subsequent interview.
  4. Remember that you communicate not only with what you say, but with how you say it. Your inflection, eye contact and body language are sending messages to the candidate.  By the same token, be looking for both verbal and nonverbal clues from the candidate in terms of their reaction to certain questions or elements of the discussion.
  5. Following the interview, all persons from the company who spoke with the candidate should briefly get together to compare notes. If you are the hiring manager, you may hear something from one of the other interviewers that causes you to disqualify the candidate, even if you had not arrived at that conclusion from your particular line of questioning.

 

While much, much more could be (and has been) written about this topic, these tips can go a long way toward making your interviews significantly more productive – both for you and for the candidate.