Ideas are the lifeblood of progressive companies. Here are some you may want to consider:
1. Deal with enabled employees: Make sure your employees understand the realities of the new economy and have bought into your plan. If you have a long term employee who resists, have a heart-to-heart talk with the employee. Clearly communicate his or her importance to the company and current behavior cannot continue to be tolerated. Consider sending him or her home for the rest of the day with pay — not termination — to think about whether he or she wants to continue working for you. Remember, your goal is improved behavior, not termination. Paying for someone to think about continued employment can be an awakening.
2. Reach out to customers: Activity breeds activity. Capitalize on your name brand and aggressively pursue past relationships. For years, I had a cartoon on my office wall that showed two buzzards conversing. One buzzard replied to the other, “Patience, *#?*! — I am going to go out and kill something.” Do at least one thing every day to make something happen rather than waiting for it to happen. Call a past customer, call a potential customer, stop by a business and hand out a business card. Make it happen.
3. Search your company on the Internet: The Internet is fast becoming the Yellow Pages of the world. Make a regular practice of searching the web to find when and where your company appears. Consider hiring a web expert to make sure you are getting the most possible hits. Keeping up with web technology yourself can be an almost impossible task. Merely having an attractive website does not mean you are taking advantage of sending the most traffic to your site.
4. Buy insurance intelligently: As your business grew, you may not have grown your insurance coverage. Remember, insurance is for disasters, not to cover day-to-day expenses. Make sure you use a professional agent who is accustomed to dealing with business owners. Just remember, cheap insurance is expensive insurance if you do not have adequate coverage.
6. Know the regulations covering overtime and workers’ compensation: If your crews work overtime, check your state regulations regarding workers’ compensation costs on the premium portion of that pay. You may not have to pay workers’ compensation on the accelerated portion of their normal hourly rate. Also, make sure your workers are categorized in the correct work category. One of our customers saved thousands of dollars by reclassifying interior from exterior work. Again, each state has different rules and regulations.
6. Take advantage of material discounts: If you pay your bills on time or within the 10-day discount period, you are not a typical contractor and your financial prudence should be rewarded. With current interest rates, borrowing the money is cheaper than not taking the discount.
7. Track non-billable field time:Non-billable field time can become lost in your accounting data. Non-billable field time is employee wages for shop time, training, safety meetings, warranty work, etc. — anything that cannot be charged to a current job. Tracking non-billable payroll allows you to budget and control such expenses.
8. Set up a collection policy: Have a set procedure for collections and stick to it. Outline the procedure and have one person in charge of following it. This probably should not be a salesperson or project manager as they are afraid that pursuing collections will hurt their client relationship.
9. Control supervisory expenses:As businesses get busier, it can be tempting to merely add more managers to help manage jobs. In smaller companies, these positions can be hard to make efficient. Consider having this person bill some of his time by running warranty calls, selling and doing small jobs, etc.
10. Mix it up: Employee wages tend to rise over time. One way to offset this is to make sure you have adequate apprentices and helpers to offset the higher, more skilled workers. Look at your overall crew wage mix, not just individual hourly wages.
11. Job cost large equipment:Many accounting programs are available for tracking vehicle and equipment maintenance, but most job costing systems can do the same thing. Simply make each piece of equipment a job and track costs against it as cost occurs.
12. Join the club:Many states allow rebate programs. Try to join a program that will reward safe companies with a rebate. Also, educate your employees regarding workers’ compensation costs. Many field employees mistakenly think workers’ comp is a government entitlement program and do not fully understand that it is insurance and rated much like their own auto premiums.
13. Excel at time management:As business slows either due to a slowing economy or season issues, time can expand the amount of activities that need to be done. At the end of the day or week, review your calendar and grade yourself on which activities created the most profit for the company. Stay focused on the things that bring the most to your bottom line.
14. Increase jobsite productivity:Research shows that jobsite productivity often has little to do with how hard people work but rather what percentage of the day they spend actually installing product and moving the job towards completion. Material handling, layout, scaffolding, and other non-installing activities are important but none of them actually move the job closer to completion. Don’t think it is an issue? The next time you drive by a construction site, count the number of employees who are actually installing something versus engaging in other activities.