After over 30 years in large corporation Business Consulting (IBM, Caterpillar, etc.), and then also in many small to mid-sized organizations, Dawn realized that one of the biggest differences in business practices between the large and small is the Tracking and Analysis (T & A) – knowing what to track, how to analyze and put that into practice. (I know what you were thinking!).
So many small to mid-sized businesses fly by the seat of their pants where it comes to business decisions – instead of gathering the facts, tracking all the essential elements of their business, and using the analysis to base their decisions on.
This occurs in both their business and their marketing, but I’m addressing the business aspect in this article. My premise (if you’ve read my previous articles) is that people start a business to do what they love to do and very seldom know, or have the time to learn, how to run a business.
It was Albert Einstein who said that the definition (loosely) of insanity was doing the same thing over and over again and expecting different results – that’s always stuck with me.
Example 1
My friend, the plumber has a good business – he guesses he grosses around $1.5 million a year. He actually doesn’t know how much he’s made over the last few years, because there are several critical areas he does not track.
When he sends a team out to a job, they have inventory in their truck and they may buy more inventory if they need it on the job (and they always buy extra), which they charge to the company on the company credit card. He knew they were selling his parts outside of work because it was reported at one time and too much came up missing, yet he did nothing to control this situation. He never really checked the credit card statements until my husband (bookkeeper) and I came in as consultants.
He strongly suspects that they are using their company credit card to buy gas for their personal vehicles because he doesn’t require any written logs or accountability. We looked at the receipts and there were too many charges and for a smaller amount than the trucks would hold – pretty clear indications.
Here’s the worst part – when a customer paid cash, the plumbers were seldom turning it in and even more disconcerting was that the bookkeeper seemed to be in on it – the books were so bad, there was no way to tell who had paid or not. We suggested that he have us to call every job that did not have a full payment recorded in the books, but he insisted that he didn’t want his customers “bothered”. He refuses to use a bank that records images of deposits, so no help there either.
The worst part is, now he owes the IRS over $40,000 just for last year because he didn’t implement simple tracking solutions and I suspect he will lose his business by the end of the year, at least in its current form.
Here’s the final caveat – he still insists that he does not need any tracking systems implemented. Are you laughing or crying at this moment ? Because I’m doing a little of both at the total absurdity of the situation – he says he can’t afford them! He can’t affordnot to implement the tracking that would save his company.
Some owners stay so busy from day to day doing what they know how to do that they can’t imagine it going any other way. They never step back and ask themselves “What can I do different that would make my business better and my life easier?”
Example 2
I worked with a roofing company and boy, did they do a bang-up business. There was hail in this area every spring for years and this company was honest and did good work, so they got good referrals.
They were doing everything manually – from paper contracts to the workers taking before and after pictures for the insurance claims and keeping them on their own phones. Both contracts and pictures ended up lost or destroyed at times, and both were hard if not impossible to replace.
They were also entering things two or three times in different systems – Microsoft Project for one, then their business system, then their marketing system.
The owner realized he had grown to the point that they needed a better way of doing things, so I set them up on OneBox Web Technology (http://oneboxweb.com) with the customizations they needed – it was a large system, and they worked with me to design it.
When a lead was entered (or mass leads imported) by the office and they assigned a salesman to each one (or a group of them), this salesman got a text message. If he was available, he could go immediately and close the deal, taking his pad with him for downloading the contract, having the customer sign it on the pad, then uploading that and the “before” pictures into the customer’s folder.
This provided them an 80% better chance of closing a deal, especially before another door-to-door salesman stopped and convinced them otherwise. Plus no chance of losing the paperwork and pictures!
Since all the options they needed for their business were in OneBox, they no longer had to do multiple entries. I knew this company could increase their profits by at least 30% from what I had seen. They got it, or so I thought.
But at the very beginning, they made 3 Big Mistakes and sabotaged themselves without understanding why.
First Mistake – Equipment
They invested in cheap pads the owner got from a friend instead of the ones I had arranged. They kept breaking down.
This is so often the case – good equipment is critical in business. Read the reviews, ask the techs in the stores which ones come back the most , search on the internet – take the time to do this and you won’t waste the time later dealing with a mistake.
Go for quality infrastructure – computers, phones, cell service, IT support, software tools, etc. Don’t scrimp there or it may come back to bite you!
Second Mistake – Education and Communication
They put a brand new secretary in charge of implementing the system who had no training or understanding of either their business or of technology. She kept calling me and saying “Nothing works!” and I kept going in and showing her how to use the system.
Every client should know that the only way you’re going to keep getting good customer service is to document what you are doing and each step you took – then the problem can get fixed right away. There is not a more dreaded phrase in software than “it doesn’t work”. What doesn’t work? Where? When? How?
Communication is everything – and everything can be solved with communication. We know, in the tech world, how an implementation is going to go from the questions we get, or don’t get.
Third Mistake – The Salesmen (or techs in the field)
They didn’t want to change how they were doing things and the owner didn’t back the system – he didn’t really “get it”. He was making so much money that he didn’t care – plus he was also in the process of buying a new house and moving his offices, so too many things at once and no focus.
Short-range thinking is keeping him from being one of the Big Players in the area, but he either didn’t understand or just didn’t care, but as my own saying goes “You can lead a client to success but if he’s not focused, he just goes in circles.”
So now, we pick our clients – we weed out those that we know aren’t ready to open their eyes and drink in the profits that are there for them. That’s another thing all companies should learn – you learn after a few trials which customers are going to be good for your business (or not) and you should learn to say “No thank you!”.
Processes in Place – with help
Here’s the kicker – once you get the processes in place and it becomes a habit for you and your staff, the tracking you do can bring in a big payoff, if you use it to adjust your business practices.
One of the main reasons I’ve found, in doing surveys, is that people assume that the companies they see as successful had a lot of cash to start up, or they had an advantage over them in some way. That is not always the case and I’ll tell you why: they knew they had to have help and they got it. They did their research and found out enough about business and marketing that they could hire the right company for them.
These examples are why it pays to hire a Business Analyst – you may not make this much or have this large a business, but there are always hidden pockets of profits that an experienced business analyst can help you find. It’s not even that it may save you a lot of money now, but in the long run it may save you not only money, but your time and ultimately your business later.
The most abused and misused budget in most companies is their business/tracking software. Please read my two previous articles to gain more understanding of what you should be tracking and why!
Dawn is a small business expert with a 30+ year background in business consulting. She and her team of business, marketing, financial and tax strategists can help you solve your business problems with a FREE consultation.
Go to OneBoxWeb.com, read about the tracking systems we’ve developed just for you, and give us a time to call you and get started on Growing and Saving Your Business!
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What Dawn is passionate about and speaks on:
– How to Run Your SMB like a Large Corporation
– TIP – the Time Invested Principal
– Why Your Website is Not Working!
(Is it just a poster or is it a big, bright LED sign on the highway?)
FEATURED POSTS:
– Tracking and Analysis – the Difference Between SUCCESS and FAILURE
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– The Perfect Web Site – Does it Exist?
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– Google and Facebook are the Bait – YOU are the product!