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Committing to the Sales Process During the Hunt

In sales, it’s critical to commit to your sales process and see it all the way through to the end. This commitment will not only increase your effectiveness and efficiency in your everyday sales activities, but also result in the most important part—more sales!

Many sales reps (for the sake of this discussion, we are referring to full-time business development reps) fail because of their lack of commitment to their sales process at one or multiple steps, from prospecting to the actual sale itself and so on.

In fact, many reps fail right from the start, lacking an actual sales process to work from. Typically, 90% of reps have absolutely no defined approach to their sales approach and spend each day feeling around in the dark through low-impact sales activities, lack of planning and not performing to their maximum potential, which is highly inefficient and at the same time, highly ineffective. A few will have a process, but will keep repeating the same methodology that leads them to little or no sales, leading further to overall subpar sales performance (Sounding like the definition of insanity? That’s because it is!)

Fully committing to a sales process actually has several components:

  • Developing and implementing a sales methodology
  • Setting goals, both short-term and long-term
  • Consistently executing that process
  • Getting to the decision maker
  • And, getting them to make a commitment to you!

In hunting, the lack of commitment varies from rep to rep, but one common example is giving up too early in their attempts to reach the prospect. During the sale, there are many ways to veer off the course of the sales process, exampled by a rep finally reaching the prospect, but not using their skills to navigate the sale all the way through to a definitive “yes” or “no”.

By not fully committing to the sales process, you could be leaving money on the table! By working an established prospecting plan and knowing where you’re going from the initial prospecting step, all the way through the final commitment step, you should begin to see different and more profitable results due to your commitment to your sales process, both in hunting and during the sale itself.  Let’s look at what it means to commit to your sales process “During the Hunt.”

Committing to Your Goals

A great starting place for your newly found commitment to implementing and executing a well-oiled sales process is to establish daily sales metrics for yourself, and of course, long-term goals such as how much sales volume you want to bring in. This includes the number of sales activities you will make today in order to reach a decision maker so you can begin the actual sale itself.

This daily commitment can be particularly challenging, as we get pulled into several directions, become distracted by other (usually less important) tasks or might be experiencing days where banging your head into a wall sounds more enticing than calling or seeing a prospect.

But, by committing to all your sales activity each day, you’ll be pushing more activity into your sales funnel. And what happens at the other end of the funnel? More activity equals more sales of course!

To further ensure your new dedication to performing your daily sales activities is carried out, think about when you “peak” during your day. This will be the time period when you are at peak performance, meaning you have the most energy and focus during your day—this is the time you should be feeling the mental mindset of “game on!”, and you can conquer tasks that are particularly difficult or undesirable.

Save your most challenging or highly focused sales activities for your peak time. Don’t particularly enjoy making phone calls? Make the calls during your peak time—they will become that much easier to do given the right energy and mind frame. Save the easier tasks, such as database management and sending emails for the times when you know you’ll feel more sluggish or don’t require a higher level of energy and concentration.

During the hunt, you must also make sure you are reaching out to your prospect on a regular, frequent basis. If you’re going to call them once a week, stick to that frequency and set your tasks to reach out to that prospect in your calendar. If you’re an owner or have to wear another hat in the organization, finding and setting aside time consistently every day is difficult. But, devoting even one or two mornings a week where your sole focus is sales can start to yield some more favorable results.

Committing to your sales activity metrics every day in order to keep your commitment to your overall sales process is critical to keeping a healthy sales pipeline full of activity and the sales momentum charging forward.

Hearing Crickets?

Many times, you won’t be able to make it to the decision maker. You call, you visit, you send emails, but never get a response from them. You’ve even done your part in committing to your sales process and contacted them on a regular basis.

Their response to you? Silence. Crickets chirping. A mental image of tumbleweed blowing down a dusty road start to form in your mind. Now what? There’s a couple of ways to approach this.

The first choice is to throw up your hands and say “well that was a waste of time.” Many reps go this route, essentially giving up too quickly on their first go-around, and usually on the first sales “touch” to that prospect, let alone multiple touches. Is giving up this easy committing to your sales process of seeing it through all the way to the end?

Remember, you have NOT gotten to a decision maker, and you have definitely not gotten to a definitive answer one way or the other of whether they will use your services or not.  You still have a ways to go in your efforts to fully committing to your sales process. Here’s choice two in the situation of “crickets chirping” after reaching out to a prospect.

Instead of giving up, you should continue to pursue the lead until you get in front of them and put them through your entire sales process all the way to the end. How much sales activity you continue to put into place on a particular prospect will depend on a number of things and their importance in your sales funnel.

Remember, just because you feel like your prospecting attempts are going into the netherworld of email inboxes and voicemail doesn’t mean the hunt is over. People are busy! And, they are getting bombarded by thousands of messages and multiple people a day. Stay true to your process, and don’t give up after your first attempts!

So, what if you did you end up reaching the decision maker? In our next article we’ll discuss how to better commit to your sales process “During the Sale.”

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What Is a Strategic Plan and Why Does Your Business Need One?

News flash – a plan of action that resides only in your head may work for a little while, but being a profitable and growing company involves collaborating with others. You must do so if you want to bring your business growth strategy to reality as you grow you will see the rewards of becoming a strategic thinker.

As a business coach and advisor serving the disaster restoration industry for several decades, I have found from working with small to medium-size companies that the owners that have some sort of formalized strategic plan in place, and are implementing it well, usually perform at a higher level than companies that do not have a plan.

Many business owners do not know where they are going and do not spend much time planning for their company’s success. They are running as fast as they can and are “fire fighters” trying to fix problems that occur daily. The biggest reason is that they are not aware of how easy it can be to successfully guide their businesses to success. Most owners, when they hear the words “Strategic Planning or Business Planning”, get a glazed-eyed look on their faces.

If you are familiar with the Alice in Wonderland books written by Lewis Carroll you may recognize this conversation between Alice and the Cat:

“Would you tell me, please, which way I ought to go from here?” – said Alice.

“That depends a good deal on where you want to get to,” said the Cat.

“I don’t much care where” – said Alice.

“Then it doesn’t matter which way you go,” said the Cat.

“–so long as I get SOMEWHERE,” Alice added as an explanation.

“Oh, you’re sure to do that,” said the Cat, “if you only walk long enough.”

All roads lead somewhere – sometimes somewhere is just another kind of nowhere. In business, clear vision and goals matter.

What Is a Strategic Plan?

Your strategic plan is more than just a lens to look through into the future. It does more than just focus your attention. It’s also essential for communicating your vision to your customers, insurance companies, suppliers, managers, and employees. It illustrates the process by which your vision will be made real.

The strategic planning process lights the way, and it’s easy to see why. A clear set of goals, when combined with an honest assessment of the company’s strengths and weaknesses, shows you what’s important, what’s relevant, and what’s actionable in your business environment.

You need to constantly be looking forward into the near future to make educated and informed strategic moves to stay relevant and memorable. The disaster restoration industry is constantly changing, and faster than ever before. New government regulations, changing workforce demographics, insurance carriers reinventing themselves, rise of TPAs and franchises, advancing technology, and economic uncertainty are continually causing chaos.

What’s In It For you?

There are 5 major problems or symptoms that suggest that there is a need for strategic planning. If your company shows one or more of these symptoms, then it is time to consider strategic planning:

  1. you are stressed and working longer hours and not seeing results you want
  2. employees are working independently and not as a team
  3. management and front-line employees are stressed
  4. work is no longer fun, exciting, or inspiring
  5. customers are complaining that problems are not getting resolved.

You might ask, “What should I do if my team displays any of the above symptoms”? It has been my experience that you cannot just use pre-designed templates and forms that are generally designed for large corporations to solve these types of problems. What you need is a powerful and simple yet practical strategic planning process that is built on a participative approach to developing a common vision and set of values. You can accomplish this by using a team-based strategic planning process, one that strips away jargon and creates a picture of the future that everyone in your company can relate and implement.

  • one that excites your team about their common future
  • one that encourages them to support one another on an inspiring journey
  • one that provides direction, meaning, and success.

How Is It Done?

Through the strategic planning process, you’ll create a written document that clearly details the future and goals of your company. Your employees and customers won’t have questions about how they fit in, and they won’t be confused about how they can help you achieve your vision. The strategic planning process ensures that everyone is on the same page.

Why Is a Strategic Plan Important?

I have found that restoration businesses that struggle usually have no plan in place and seem to flounder in their attempts to be successful. Arguably, the leading cause of business failure is not having a strategic plan in place that is implemented effectively. If your company has little idea where it is headed, it will wander aimlessly with priorities changing constantly and employees confused about the purpose of their jobs

For your company to be successful, there needs to be a road map for success. Without that road map provided by a solid strategic plan, decisions are made in a vacuum and/or there is considerable confusion and inconsistency evident within your company.

At a minimum, a well-developed strategic plan:

  • establishes clear and specific goals, objectives, strategies, and tactics
  • defines strategy that allows the company to gain competitive advantages and enhance sales and profits
  • provides clear direction and focus for all employees
  • allows the company to align employees, teams, departments, divisions, etc. with a common plan and focus so that everyone can be working toward the same goals and objectives
  • enhances productivity, morale, communication, efficiency, sales, and profits
  • defines specific tasks and establishes an action plan for effective implementation.

At BDA, we believe that every restoration business owner has the right to expect that their business can deliver for them what they want out of life and to create wealth. A written strategic plan, when done well, is both the forward path and the map itself. It’s the basis for any business owner to achieve their vision.

Call me and give me some feedback. Make it a prosperous month! See you on the next blog.

John Capponi, CR

Business Development Associates, Inc.

Operations and Management Consultant

john@gobda.com

Cell: 407-745-7698

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How to Improve Sales Communication with Stories

At the heart of it, sales (and marketing) are about effective communication. I have long said that sales technique is about lowering barriers to effective communication. That’s it.

That’s because modern sales is about determining whether or not your prospect has a problem that you can solve. And the only way to do that is to get people to lower their natural defensiveness in a sales situation and have an effective communication, which ought to look a lot like a conversation (even if a presentation is involved.)

Another way of saying this is that the sales process is about determining whether or not there is a mutually beneficial reason for you and your company to do business with the prospect and their organization.

Now, this sounds easy! Just communicate effectively. As anyone who has ever been in a relationship knows, that’s easier said than done.

In this article I want to explore one of the most important elements of effective communication: storytelling.

Human beings are first and foremost story-telling and story loving creatures. If you have kids you can see that one of their earliest joys is being read to and then (hopefully!) reading themselves.

On their birthdays they relish the story of their birth.

Our entertainment is essentially story telling. News is in a way telling the story of what is going on in the world. And before there was electricity, we sat around the fire telling stories that transferred our tribe’s body of knowledge, mythology and culture from one generation to the next.

We are uniquely wired to tell and listen to and respond to and learn from stories.

Now, the types of stories you tell are also incredibly important. Some ham handed salespeople feel that they should make the prospect the star of the story. This comes across as “in their face” and confrontational and shuts down communication rather than lowering barriers.

The most powerful stories are “other guy stories” about people like them, people in jobs like theirs, people that they can relate to. This allows them to process the information without feeling the need to protect their ego by being defensive and pushing back.

For example, if you say to an insurance agent, “So, Pete how are you dealing with your policyholder retention problems?” you may get strong pushback along the lines of, “I’m not sure what you’re talking about. We’re doing just fine.”

The other guys story sounds like this: “Pete, we work with a lot of agents in this market and one of the things they tell us that they are challenged by is policyholder retention. They’re seeing their retention numbers fall off and are very concerned about finding ways to reverse that trend. Is any of that going on for you?”

At this point Pete may tentatively acknowledge that his agency is facing this issue: “Well, retention is an area we’re focused on.”

Now, if you have good sales stories here is the perfect place to tell one: “I was talking to the principle of a State Farm agency the other day and he told me that he has been tracking his retention for the past ten years and that over the past three years his numbers have fallen off a cliff. He’s got two kids in college and is working harder than he has in years to generate new business to replace what he’s losing.

“He thinks that it’s the Internet insurance providers that are hurting him and that selling insurance has become all about price these days. What are your thoughts?”

This kind of a sales story is non-threatening because it’s about somebody else! It also allows Pete to feel a little better about owning up to the problem and opening up to you because there is safety in numbers but also because if you, as the salesperson, are talking about this issue, maybe you have some ideas for how to help.

Another important aspect of human nature is that we learn new information best in terms of information we already know. The best example of this that I have seen is the way they pitch movies to studio executives. “It’s like a combination of “Pretty Woman” and “E.T.”.” What you immediately know is there’s going to be a hooker with a heart of gold and aliens, right?

This is another argument for using “other guy” stories but even more powerfully for using analogies to communicate. Given that I spend a huge amount of my time training and coaching salespeople I use dating metaphors all the time.

These are powerful because everyone has dating experiences and these tend to be seared into our memory and consciousness. People can usually instantly relate.

For example, if I am talking about maintaining momentum during the prospecting sequence I tell a salesperson I’m coaching, “It’s like if you go out on a date and things go well but then you don’t call her for two weeks. You can forget about date number two, right?” (This is easily modified if speaking to a female salesperson.)

The point I am trying to make is much more easily made when it connects to something that they already know—their dating experience.

One of the great advantages of working in an industry for a long period of time is that you get to collect a huge amount of sales stories! But this starts early on in a rep’s tenure is they listen carefully, ask good questions and understand the power of these stories and therefore collect them!

Start thinking in terms of sales stories and see if your results don’t improve!

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Warning: Plan Next Year’s Budget Before It’s Too Late!

Have you ever played a game of darts, hoping to hit the bullseye and set the dart off sailing, hoping to hit the right mark? Even worse, why not try it blindfolded? Instead, a better strategy would be to plan where you want the dart to land, figure out what it will take to get there, and acquire some experienced coaching to improve your form and likelihood of success.

The anecdote mentioned above is the same path some restoration business owners take during the budgeting planning process. The single most important document you can create and maintain is your company’s budget.

In the academic world, a budget is viewed as management’s quantitative expression of plans for a forthcoming period. Budgeting, when done properly, can serve as a planning and controlling system. The company’s goals and performance objectives are documented in financial terms and can be used throughout the year.

A properly maintained budget allows you to determine how much revenue you need to generate to be profitable—or just stay afloat.  With a properly maintained budget:

  • it forces you to track your expenses carefully, ensuring that you notice problems and rein in your expenses before it is too late
  • if you are looking for capital to grow your business, most investors and banks want to see a budget before they cough up a loan, to ensure that your financials are on track.

A budget protects your business because it forces you to be a better decision-maker and planner. When you have an accurate financial picture, you are less likely to allow impulses to dictate your decisions. For example, your budget will tell you quickly if you should invest in that new vehicle, equipment, software, or that next shiny object you just got to have!

One of the consequences of poor planning and poor control is a loss of financial reward for the restorer and the stakeholders. Planning is at the core of business operations and absent a measured strategy, your bottom line will be adversely affected.

You must know what it takes to successfully operate your company. Without a plan on how to intelligently operate and grow your restoration business, you are almost sure to fail or, at the very least, not grow your company year-over-year.

How will you use your budget?

A budget can serve several purposes. It can help you determine whether your business meets your profit requirements, given reasonable assumptions.

Tracking actual-to-budget provides visibility into whether you are meeting your revenue and expense goals. Reviewing this monthly allows you to course-correct mid-year.

Lastly, updating the budget and reforecasting throughout the year provides a projection of year-end profitability and this is great for tax planning.

What is different this year?

There is no better time than now to look at this current year (2016) and assess how well your company performed against beginning year expectations.

  • did you achieve all of your goals and objectives you set out at the beginning of the year?
  • if not, what kept you from making these goals?
    • were they one-time events, or has the underlying fundamentals of the industry and your business changed?

What Is Your Plan?

First, make sure all accounting data and financial reports for the current year are up to date. Then, consider the changes you anticipate for your company in the coming year.

  • what will it take to implement these changes (both in time and money) and have you adequately accounted for them?
    • For example, perhaps you plan to increase sales. If so, how much incremental revenue do you expect and what is the incremental cost for generating those sales?
    • similarly, you need to plan for any anticipated capital expenditures
      • will these costs be funded through a line of credit, loan, or working capital?

What level of detail is right for your budget?

Budgeting and business planning can be as detailed as you want. If you are a hands-on business owner and there are no big growth initiatives for your business, then you can probably live with less detail.

However, if you are watching costs and/or are making changes to your business, then you will want more detail to track progress against target(s).  Your budget can be very powerful, both in managing expenses as well as in planning and forecasting business performance.

The budgeting process is a great opportunity to reassess your operations and develop a realistic roadmap for the coming year. Like any good roadmap, your budget should be referred to often and your route revised for unanticipated detours.

There is no better time than NOW to develop your company’s financial budget for 2017. Your budget is your roadmap and takes into consideration where you have been and can help guide you to the desired destination for next year.

If you stay on the current course, where will you end up?  Alternatively, if you change the route, where will you be at the end of 2017?  It is up to you to decide which path is the most profitable and most likely to be achieved.

Should you need additional help and insight in preparing your budget for 2017, I am available to help you in the process.

My mission is to serve business owners and corporate executives that suffer from sleepless nights, making little to no money, and having people problems. I help them increase year-over-year performance and profits, build high-performing teams, and get some time back for themselves.

Make it a prosperous month!  See you on the next blog.

John Capponi, CR

Operations and Management Consultant

Business Development Associates, Inc.

john@gobda.com

Cell: 407-745-7698

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Lack of Effective Billing and Collection Processes Cause Cash Flow Issues

Have you ever arrived at the office on Monday morning and greeted by the bookkeeper who comes to you with a frantic look on her face, wondering how the company is going to pay the bills and make payroll this week? This is a common scenario that occurs too frequently in many restoration businesses across the country.

Cash flow has always been a top concern for restorers and is one of the most devastating problems due to the increasing time it takes to collect outstanding money after completing a job. The customer is satisfied, the adjuster has received the invoice and Xactimate® estimate, and money has not arrived! Now, the adjuster has gone silent and does not return your calls causing you to get more frustrated as the days pass. After all, don’t they understand that you have payroll to meet and you need to pay your subcontractors and suppliers.

Many restoration companies focus on signing up the job and completing it on time and on budget, while eagerly trying to meet the needs of the stakeholders – customers, adjusters, and employees. In the life cycle of the job most companies focus on producing an acceptable level of service and while this is admirable, it does not guarantee that they will get paid in full or in a timely basis. It is critical for survival that an effective billing and collections process be an integral part of your business to increase revenue and incrementally increase your bottom line profit.

When a restoration contract is signed, the contractor expends a good amount of time, effort and money getting workers and subcontractors lined up, materials ordered, and executing other operational tasks. During this early flurry of activity, however, they pay little attention to the process of getting paid. The problem with this scenario of waiting until a project is well under way to address cash flow is risky. A single job that is significantly unpaid can ruin your entire year – or even put your company out of business.

Poor cash flow doesn’t need to jeopardize your livelihood and the health of your company. With a bit of proactive planning using the advice below, you can eliminate most barriers to receiving timely payment. These are a vital few tactics:

  • Gather complete information during the lead intake process to get an effective workflow initiated.
  • Contact the insurance company immediately and collect all the claim information to effectively process the claim and determine what adjuster will be assigned to the loss. Make every effort possible to meet the adjuster on the loss site and agree on the scope of work to be performed.
  • Develop a Scope of Work quickly to establish a workflow process and establish the job requirements.
  • Customer involvement from the beginning – it never ceases to amaze me when working with restorers that they are reluctant to get the insured involved in collecting their money in a timely basis. The policyholder is the insurance company’s customer and they are the only person who has influence over them.
  • Contact the mortgage company immediately after the contract/authorization has been signed to determine what their requirements and policies are to release the funds. Make sure you have negotiated partial payment for percentage of completion or phase completion so they can release funds to you at specified times throughout the reconstruction process.
  • Create proper draw schedules and prepare change orders immediately when negotiated with the customer, as they are both critical to better cash flow management.
  • Manage your receivables – establish a weekly rhythm to review all of your accounts receivable aging report and assign a responsible person to oversee the status of all outstanding invoices. Identify the best person in your company to manage the collections process- they should have the right temperament and diligence to manage the process. Be friendly, fair, firm, and frank and do not be afraid to ask about your money.
  • Cash flow is everyone’s responsibility – engage all employees that are involved in production, project management, and the administration processes. Collecting money is not just the task of the accounting department. Instead, it calls for a company-wide effort and all hands on deck, because collections can be improved before an invoice is ever issued to customers.
  • Accurate, timely, and complete documentation of all decisions and conversations involving the customer, mortgage company, and insurance adjuster are critical.
  • Thorough and complete job close out to make sure that all customer expectations have been met and all documents have been signed and are in the job file.
  • Develop a standard billing packet to include, but not be limited to: lead intake information, contact/authorization Xactimate® scope of work, payment schedules, invoice, change orders, photos, documentation, sketch, relevant communication, certificate of satisfaction, and any additional information required.
  • Understand your lien rights in your state and execute the required steps and documentation to preserve your rights to collect your money that you have worked so hard to earn. Protect your company when submitting a signed waiver with a draw request, be clear that you’re only releasing the lien up to the amount of payment received. In addition, consider adding a footnote stating that the waiver only becomes effective upon receipt of payment.
  • Keep your accounting records and restoration management system up to date and accurate so you can track your money through the construction process.
  • Develop and execute an effective Cash Flow Management System with all the milestones in clear sight so you can make sure you are managing the job effectively and will be able to collect your money when the job is completed. It is critical for the health of your company to consistently decrease the average collection days to allow your company to meet its obligations in a timely manner and increase profitability.
  • Have your attorney review your contracts and authorizations to make sure you are covering your risks and include the legal language to protect your ability to collect your money.

Managing your business to optimize cash flow is an ever-evolving process. At the end of each job, ask yourself and your team what you learned and what you could have done better. Then, take action to improve and refine every aspect of your process, from contract signing to receipt of final payment.

What should you do now?

  • Perhaps now is a good time to have a meeting with your employees and map out all the roles and responsibilities, including the primary and secondary activities required to maximize your cash flow management system. Be a systems thinker!
  • Act now to save money and schedule a 60 minute complimentary call with me to discuss your business and what constraints may be holding you back. Email me to schedule a FREE call, which is a $497 value.

My mission is to serve business owners and corporate executives that suffer from sleepless nights, making little to no money, and having people problems. I help them increase year-over-year performance and profits, build high-performing teams, and get some time back for themselves.

Make it a prosperous month!
See you on the next blog.

John Capponi, CR
Business Development Associates, Inc.
Operations and Management Consultant
john@gobda.com

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Poor Organizational Structure is Hazardous to the Growth of Your Company!

In this continuing blog series titled “5 Bottlenecks to Scaling Your Business and Building True Wealth” I have been discussing the 5 simple operational constraints (bottlenecks) that hold restoration businesses back from being more productive and profitable. Now, in this post I will discuss “Poor Organizational Structure is Hazardous to the Growth of Your Company!”.

A restoration company’s organizational structure is what maintains the hierarchy in the business, facilitates communication, and keeps the organization running smoothly. Effective leadership and strong organizational structure are more important to the success of a company than technology, according to the International Institute of Management.

A company with many departments or levels that are insulated from each other ensures that the business owner knows less. Whatever the owner may be told is filtered by the level that reports it. Because a restoration company is served best with an owner-operator style of management, this removed method of management is hazardous.

In managing a business it is better to focus on two general but interrelated levels – leader managers and functional experts. Leader managers are the key management employees who have a long-term responsibility to the company.  Whether through ownership, employment contract, or family their future is the company’s future. However, leading a company is not a full time job so this frees up time for leaders to also perform management tasks and whatever other tasks that are calling for immediate action, i.e., estimating, supervision, or production.

Functional experts are the employees who are experts at some particular function. They provide restoration and remediation services, install work, estimate damage, manage jobs, do accounting/bookkeeping. They know the most about the area on which they focus and we know these employees as estimators, project managers, construction supervisors, lead technicians, office managers, and bookkeepers/accountants. In my experience as a business advisor I like to see no more than eight employees reporting directly to the owner. I have found that eight is the typical upper limit for effectiveness; having fewer allows for greater focus on each employee.

Because a majority of the company’s cost is at the job/project level, it is well advised to have one person manage the total field operations. Two people are never a good idea. There can be supervisors for different service lines/departments; however, one person should manage the operational function of the company.

As a simple guide to help understand the problem of profitably growing a company, as the number of employees and levels of management in the organizational structure increases the communication system becomes less efficient and inaccuracies increase, all because more filtering occurs. Keeping your organization flatter – fewer levels – tends to be more efficient.

Without a formal organizational structure, employees may find it difficult to know who they officially report to in different situations, and it may become unclear exactly who has the final responsibility for what. Organizational structure improves operational efficiency by providing clarity to employees at all levels of a company. By being clear on the organizational structure, departments can work more like well-oiled machines, focusing time and energy on productive tasks. A thoroughly outlined structure can also provide a roadmap for internal promotions, allowing companies to create solid employee advancement tracks for entry-level employees.

Designing an organization structure helps management identify talent that needs to be added to the company. Planning the structure ensures there are enough human resources within the company to accomplish the goals set forth in the company’s annual strategic plan. It is also important that responsibilities are clearly defined. Each person has a job description that outlines duties, and each job occupies its own position on the company organization chart.

All restoration companies should be concerned about its bench strength (talent) in the event that the owner leaves the company for a short period, a key manager leaves the company, or if a catastrophic event hits the region.

What should you do now?

  • Develop Job Descriptions to help the business owner  account for all the tasks and functions required to operate the company and determine whether workloads are reasonable.
  • Analyze current employees to consider the company’s projected growth and expansion plans. Determine what skills and knowledge will be required for each position in the company, particularly management positions. Decide whether your current employees have the capacity to grow with the company and assume greater responsibilities or if you will need to recruit additional talent.
  • Define positions to be added and determine the gaps between your current employees’ capabilities and the skill sets required in the future that will be filled with new hires.
  • Create an Organizational Chart to indicate the reporting relationships for each position -who reports to each manager. Depicting the organizational structure in chart form helps you to determine if the organization is balanced – ensuring that no managers have an unreasonable number of employees to supervise and each manager has the support personnel needed to complete the tasks assigned by the business owner.
  • Present the New Structure and the changes to managers, supervisors, and employees. Be candid about why the changes in structure are necessary to accommodate growth and to allow the company to run more efficiently. If employees understand the logic behind the structure, they are more likely to support it.
  • Register for our next webinar in October 2016 to learn more about growing and sustaining a healthy and robust business.
  • Act now to save money and schedule a 60 minute complimentary call to discuss your business and what constraints may be holding you back. Email me to schedule a coaching demonstration, and SAVE $497, any time during the upcoming blog posts.

My mission is to serve business owners and corporate executives that suffer from sleepless nights, making little to no money, and having people problems. I help them increase year-over-year performance and profits, build high-performing teams, and get some time back for themselves.

Make it a prosperous month!  See you on the next blog.

John Capponi, CR

Operations and Management Consultant
Business Development Associates, Inc.
john@gobda.com

Cell: 407-745-7698

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Understanding the correlation between a computer and a brain will help you sell more.

We all know that “sales” is about getting people to change. Without dissatisfaction, people are unlikely to change.

So why do the people you talk to about working with your restoration company say that their current contractors are doing “fine”?

In any selling situation the buyer is defensive, their walls are up and their BS indicator is set to its most sensitive. An important nuance about the normally defensive selling situation is that buyers sometimes don’t want to discuss or admit their problems because they feel that it puts them at a disadvantage in the selling process or they’re afraid that it will make them look stupid or incompetent.

But an important and often overlooked reason that people say things are “fine” (even when you are certain that they aren’t) comes down to a “brain issue.”

In order to discuss this, let’s use the analogy of a computer. Computers have a hard drive where all the information is stored. There can be gigabyte upon gigabyte of data. But when you start working on a file, the smaller amounts of data you need is pulled into RAM so that it can be effectively worked on because navigating the giant hard drive is way too cumbersome and slow.

The human brain operates in much the same way. Our “hard drive” contains amazing amounts of information. Probably every experience we’ve ever had, every thought, every feeling is stored in there somewhere.

But we also utilize RAM in the sense that we pull data from our hard drive and bring it to the forefront of our consciousness in order to work on a problem.

So, we could consider information stored in our brain’s hard drive as “latent memory.” It’s there if we need it. But the stuff that we are working on is in our RAM or “active memory.”

Here’s the really important point: The brain hates unsolvable problems. If it determines that a problem cannot be resolved it is tagged as “just the way it is and can’t do anything about it” and the issue goes into latent memory.

Now the fact that the person has made this determination doesn’t mean that the problem is truly unsolvable, just that they think it is. For example, if you ask an agent how his current contractors are doing he might say “fine”. But if you said, “a lot of the agents we work with tell us that lack of communication from their contractor is a big issue for them” the agent would immediately start searching his latent memory and find that, sure enough, he’s had lots of communication problems with his contractors. He’s tried to improve the situation over the years, even changing the contractors that he worked with, and just decided that contractors are lousy communicators and that’s just the way it is and there’s nothing that can be done about it.

Now you’ve moved this issue from latent memory into the target’s RAM, just where you want it. Now he’s starting to think about these problems again and when you ask, “Is communication from your contractor something you’d like to see improved or are there other services that might enhance communication?” you’ve now got your target thinking.

Once you understand these concepts, you will start to think about the kind of questions you are asking and the way you ask them. You will start to be careful about directly asking “How are the contractors you refer doing?” because you will understand the hidden land mine you just created for yourself when they say, “Fine!”

Let us know if you have ever experienced a similar situation, or if you found this helpful!

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Bookkeeping Inadequacies That Can Ruin Your Business

In this continuing blog series titled “5 Bottlenecks to Scaling Your Business and Building True Wealth” I have been discussing the 5 simple operational constraints (bottlenecks) that hold restoration businesses back from being more productive and profitable.

Now, in this post I will I will identify the Bookkeeping Inadequacies That Can Ruin Your Business”

When it comes to a restoration company’s bookkeeping practices, the business will only operate as efficiently as the processes that are in place. Proper bookkeeping is essential to the health of any company. If it’s done poorly, it can ruin a business gradually through higher costs; suppliers, subcontractors, and other vendor services that become reluctant to work with a company; and most importantly- lost profits. A reliable bookkeeping system is the basis on which all of a company’s vital financial data is built.

During peak periods caused by microbursts, surge events, and catastrophic events your jobs are coming in on a rapid basis and money should be flowing at the same pace to meet the demand. This is a time when many restorers let their bookkeeping process get behind with the intent to catch up when things slow down. This is a bad decision that will have major consequences when lean times come, and they certainly will! An effective accounting system will keep you alive and provide the necessary financial data, i.e., cost containment, profitability, and the cash flow necessary to continue to provide services to your clients and customers.

Effective bookkeeping requires your company to enter transactions on a daily basis and you must be disciplined to ensure that no items are missed or forgotten. Mistakes can cost your company money and cause issues with important financial matters, such as paying bills, receiving customer payments, and estimating and managing jobs.

Bad bookkeeping can ruin your business in a number of ways. Here are some issues relevant to inadequate bookkeeping processes:

Hiring the wrong person

  • Whether it is a family member, an inexperienced office temp or even the business owner who hires themselves to do the bookkeeping, the wrong person can create financial problems that go beyond just making uninformed decisions. In fact, trying to save money or help a loved one out can actually lead to audits or penalties. Hiring the wrong person can create issues that haunt your business for many years to come.

Lack of accountability

  • The problem with finding the right bookkeeper for a small business, even outside of cost, has to do with management of the bookkeeper, which in many situations is not done at all. As a result the bookkeeper does whatever the bookkeeper is going to do on whatever schedule the bookkeeper is going to do it. The lack of accountability and direct management in these situations leads to poorly motivated or poorly trained bookkeepers, who, to be fair, aren’t being properly guided to provide bookkeeping that helps a small business grow.

Poorly structured Chart of Accounts

  • Almost universally, troubled companies have a poorly structured chart of accounts that inhibits good financial management. The cornerstone of your restoration company’s accounting system is the Chart of Accounts no matter what service lines you offer. It serves as an information catch-all that should be designed for easy understanding and implementation by the company’s bookkeepers, estimators, project managers, supervisors, and field personnel. By segregating operating, marketing, general and administrative expenses, various performance criteria can be effectively analyzed resulting in better and more confident decision making. Without a properly structured Chart of Accounts, it is impossible to provide meaningful information for you and your management staff.

Failure to account for Work in Process (WIP)

  • Calculating the true gross profit for your company depends on your bookkeeper understanding and implementing “WIP accounting” that results in a periodic adjustment to the financial statements to accurately reflect your jobs in process.

Improperly categorizing income and expenses

  • Without knowledge of formal bookkeeping practices it will become a problem in scaling your business profitably to the next level. Accurately tracking income and expenses in the correct categories ensures proper measurement of profitability. You should use general bookkeeping guidelines for standard categorization that is relevant to the disaster restoration industry that follows generally accepted accounting practices (GAAP). Separate registers for each bank account and credit card, as well as properly classifying categories and sub-categories, make a big difference.

Making data entry errors

  • Data entry errors will happen from time to time and you cannot prevent all data entry errors so the preventative measure is to have a policy to perform various reconciliations timely to ensure that data entries are detected quickly and can be corrected. For example, you will want to perform monthly bank reconciliations, as well as accounts receivable and payable reconciliations. You can also run budget-to-actual variances to identify possible errors in classifying revenues or expenses, or run customer receipts or vendor payment reports periodically to ensure that all receipts and disbursements seem reasonable. Unusual transactions should be reviewed to ensure that no data entry mistakes were made and that the transactions are accurate.

Failure to stay current with your financial reporting

  • I recommend a weekly review of the Income Statement and Balance Sheet. Receiving your financial statements once a quarter or yearly at tax time is just not acceptable. It is so much easier to find and fix a mistake that happened in the last few days than trying to track down something strange from six months ago. Also, you can fix the mistake in the current month. That is better than having to re-open a previous month and adjust it.

Not performing basic account reconciliation

  • One of the key elements of a good bookkeeping system is to consistently reconcile the books with the bank statements, credit card statements, and any other statements each month. Many restoration businesses either fail to or improperly reconcile on a regular basis. A major benefit of reconciling the bank statement is ensuring that the cash on your company’s books equals the amount of cash shown by the bank. Reconciling your accounts every month also helps to minimize errors and identify potential issues that in many instances can be corrected in the current month.

No back-ups

  • The heavy dependence on technology brings with it the chance that something could happen to your data. Data needs to be backed-up and kept in different locations to avoid potential losses. Experts recommend that you back up your accounting data daily. This is even more important if you are operating in a paperless environment.

Mixing business and personal finances

  • One of the most common bookkeeping mistakes restoration business owners make is to mix their business and personal finances. Keep these separate and distinct to provide a more accurate track record of what was really used for business and what specifically related to personal use only.

What should you do now?

  • Your accounting team can help you and is honor-bound to help you find and fix your in-house accounting so that you oper­ate from a creditable financial position. That’s the first step and from there you can see the impact of operational, marketing, and sales behaviors.
  • Perhaps now is a good time to have a meeting with your office staff and map out all the roles and responsibilities, including the primary and secondary activities required to maximize your accounting system. Be a systems thinker.
  • Register for my webinar on July 20, 2016, “How to Develop an Effective Bookkeeping System to Generate Higher Profit”, to learn more about implementing a high-performing bookkeeping system.
  • Act now to save money and schedule a 30 minute complimentary call to discuss your business and what constraints may be holding you back. Email me to schedule a complimentary call, which is a $497 value, any time during the upcoming blog posts.

My mission is to serve business owners and corporate executives that suffer from sleepless nights, making little to no money, and having people problems. I help them increase year-over-year performance and profits, build high-performing teams, and get some time back for themselves.

Make it a prosperous month! See you on the next blog.

John Capponi, CR

Business Development Associates, Inc.

Operations and Management Consultant

john@gobda.com

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5 Bottlenecks to Scaling Your Business and Building True Wealth – Part 2

5 Bottlenecks to Scaling Your Business and Building True Wealth – Part 2

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In Part 1 of this series, I discussed the fact that generally there are 5 simple operational constraints (bottlenecks) that hold restoration businesses back from being more productive and profitable. We discussed that constraints can be the consequence of poorly designed business systems and processes, untrained or an insufficient number of workers, adverse company policies, and even owners and managers that are not systems thinkers.

Based on my coaching and consulting with numerous restorers I have found that one of the preliminary tasks in laying a solid foundation for effective project management, customer satisfaction, and profit is the lead intake process.

There are several methods of incoming leads e.g., incoming call, fax, over the internet, through a TPA, or through a claims management system such as XactAnalysis to mention a few. Yet, in many situations inadequate attention to detail is void in many busy offices. The phone is continually ringing and there are constant interruptions not to mention urgent fires (no pun intended) to put out daily.  Everyone is running as fast as they can!

Here is a list of common details frequently not gathered during many initial conversations and interactions in the lead intake process:

  • Source eliminated
  • Rooms affected
  • Number of stories/levels
  • Access to building
  • Electricity and water available
  • Property owner available to sign work authorization
  • Accurate contact information
  • Incomplete insurance company information
  • Deductible requirements
  • Source of business
  • Who is responsible for paying for the services
  • Lack of details regarding actions required

An effective process will address the following chunks of information:

  • Job-site information
  • Property owner information
  • Payee information
  • Insurance company information
  • Source of business
  • Schedule information
  • Mobilization and deployment

Inadequate lead intake is costing many companies tens of thousands of dollars in lost profit and causing unnecessary stress, anxiety, and frustration with their workers.

What should you do now? Perhaps now is a good time to have a meeting with your office staff and map out all the roles and responsibilities, including the primary and secondary activities required to maximize your lead intake process. Be a systems thinker.

Act now to save money and schedule a 30 minute complimentary call to discuss your business and what constraints may be holding you back. Email me to schedule a complimentary call, which is a $497 dollar value, any time during the upcoming blog posts.

My mission is to serve business owners and corporate executives that suffer from sleepless nights, making little to no money, and having people problems. I help them increase year-over-year performance and profits, build high-performing teams, and get some time back for themselves.

Make it a prosperous month. See you on the next blog.

John Capponi, CR

Business Development Associates, Inc.

Operations and Management Consultant

john@gobda.com


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5 Bottlenecks to Scaling Your Business and Building True Wealth – Part 1

5 Bottlenecks to Scaling Your Business and Building True Wealth – Part 1

For more than 15 years Business Development Associates, Inc. has been helping restoration business owners develop robust marketing systems that grow their companies to the next level. During that journey we have discovered a few universal truths about the process. Generally, there are 5 simple operational constraints (bottlenecks) that hold businesses back from being more productive and profitable.

I believe that every restoration business owner should be acquainted with the profound yet simple principles contained in the Theory of Constraints. This business improvement methodology is based on the premise that: “Every real system, such as a business, must have within it at least one constraint [limitation or restriction]. If this were not the case then the system could produce unlimited amounts of whatever it was striving for, profit in the case of a business. . .” (Dr. Eli Goldratt, “The Goal”).

Using the Theory of Constraints as a starting point to increase performance, every business or system has something preventing it from reaching its full potential—a weakness that limits its performance and output. This weakest point or constraint determines the maximum capacity of the entire business.

Constraints are also the consequence of poorly designed business systems, untrained or an insufficient number of workers, adverse company policies, and even owners and managers that are not systems thinkers.

Some of the constraints I have identified from working with numerous restoration companies that cause them to underperform are:
1. Failure to record complete, timely, and accurate lead intake information.
2. Inadequate accounting and bookkeeping systems and processes.
3. Ineffective project management and cost controls.
4. Non-existence of organization structure, job descriptions, and standards of performance.
5. Lack of effective billing and collection processes causing cash flow issues.

My experience from 35+ years of service to restoration businesses in the capacity as an owner, consultant, coach, and advisor has shown me that building true wealth in your business is a journey and not an event. Performance improvement requires the owner’s full commitment, focus, and engagement and without it the success of the process is marginal at best.

Look at your business as a tool for wealth creation to achieve personal success and security while enjoying the fruits of your hard work. Your goal may be to pay off debt, employ family members, fund your children’s education, take vacations, or accumulate adequate funds for an enjoyable retirement. Whatever your aspirations and goals were when you started your business, reignite them and build that business that will accomplish your dreams.

Over the next 5 operations and management posts I will explore each of the 5 Bottlenecks to Scaling Your Business and Building True Wealth. Stay tuned and watch for the next post. You will be glad you did!

Additionally, I will be available to schedule a 30 minute complimentary call to discuss your business and what constraints may be holding you back. Email me to schedule a complimentary call, which is a $497 dollar value, any time during the upcoming blog posts. Act now to save money!

My mission is to serve business owners and corporate executives that suffer from sleepless nights, making little to no money, and having people problems. I help them increase year-over-year performance and profits, build high performing teams, and get some time back for themselves.

See you on the next blog. Best wishes for a prosperous month.

John Capponi, CR
Business Development Associates, Inc.
Operations and Management Consultant
john@gobda.com

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