Four Wishes for You in 2018 –
I love a new year! Every event on the calendar is a new opportunity. Every item on the “to do” list is the chance to get it right. Every employee represents a fresh slate and another chance to motivate. Every customer is a new experience to learn from and improve with. Every goal says possibilities.
And with the optimistic perspective a new year brings, here are my four wishes for your 2018.
1) May you understand and analyze your business financials.
The most successful, profitable business owners understand and know how to use the basic financial statements of their companies. Every month carve out two to four hours to study your income statement and balance sheet at a minimum. Calculate and manage monthly or even weekly break-even point. Adjust your customer promotions, marketing efforts, and employee incentives based on what the financials tell you.
If you are already a financial expert for the business, ask your accountant or book-keeper for new financial measures: gross margin per service vehicle/service technician, profitability per customer, and dollars of revenue generated by maintenance agreement customers.
If you are not a financial expert, make this the year to become one. Register at a community college, attend industry training, hire your accountant for two hours a month to explain the significance of the numbers on the income statement and balance sheet, and join Service Roundtable and participate in the training that is offered.
2) May you macro-manage not micro-manage.
No matter how many articles, columns, and books are written on this subject, I still see this as one of the biggest issues the HVAC industry faces. Companies can’t grow; middle management can’t manage; profits suffer. This is because the owner must be involved in every day-to-day decision, job, and difference of opinion whether between employees or between customers and the company. In the mean-time, the most strategic issues - improving profits, increasing sales, setting direction - go un-managed.
Make this your new year’s resolution: Establish the goals, communicate the goals, leave managers and employees to work out the details of how the goals are achieved, measure the results through your financial statements, and take corrective action only when the financials dictate. Manage systems, procedures and standards – not people.
3) May you incorporate social media in your business.
Social media is here and it is staying. Whether you like it or not, the future belongs to those businesses that figure out how to capture customers using this communication venue. As Matt Michel in Social Media for the Service Contractor writes: “Why should you get involved with social media? Because that’s where your customers are!” Currently, an astounding 78% of U.S. population has a social network profile. And it will be higher tomorrow and the day after.
Yes, you may have to hire someone to manage social media for the company. For many of us, social media and all it represents is a convoluted, tangled, incomprehensible language. You don’t have to understand it, just hire someone who does.
4) May you learn to love your business again.
The Righteous Brothers sang it best: “Have you lost that lovin’ feeling?” Think back on the early days of buying or starting your business. Remember the thrill of ownership and the power of realizing that you could make all the decisions.
The owner of a company we worked with this year said, “I never knew owning and running a HVAC business could be like this!” Certainly, it made me feel great that we had provided him the means to be successful, but it also made me sad that he had been suffering through hardships and heartaches for seven long years before he fell in love again.
How did he do it? By following the four pieces of advice, outlined above. He understands his financials for the first time and uses them to make decisions. He now sets strategic direction and removes himself more often than not from daily decisions, sets strategic direction, and is beginning to embrace new avenues of marketing, including social media.
I hope my wishes for you come true in 2018!