Nearly 80 lawmakers have signed onto a bill that would require public schools in Massachusetts to test their water pipes for lead. The bill also...
The most profitable things you can do for your company are recruiting, training and managing great salespeople.
As I work with dealers around the country, I find many dealers really are not running their companies. They're actually doing work they allocated to other employees. Falling prey to this problem is costing them thousands of dollars and eventually may seriously hamper the profitability of their companies.
In his book The E-myth, Michael Gerber describes a problem that happens to many small business owners: they often do not actually run their companies. You know what it's like--you have problems to look after that take you away from the really important things you should be doing.
For example, let's say your company pays you $50,000 in salary per year plus benefits and a company car. This means that you actually cost the company approximately $75,000 per year or approximately $38 per hour. So, when you spend an hour going to the bank, you spend at least $38 to do that. If you spend two hours per day doing non-productive tasks, that costs your company almost $20,000. What's worse, those unproductive tasks take you away from top level income-producing tasks that may cost your company $200,000 or more.
The fact is that if you want to earn $100,000 per year, you should never be doing work that you wouldn't pay a person $100,000 per year to perform.
Easy to say, but tough to implement. When I call my clients who own water equipment dealerships, they often answer from their cell phones and say things such as, "I'm just here digging a trench for an installation today," "I'm on my way out to fix a leak that my installation guys messed up yesterday," or "I'm just mailing out my rental statements today." While all these jobs have to be done, should they really be done by the highest paid member of the team? Not only does this cost the company a lot, but it means that for that period of time, your company had no leader.
Through seminars, I teach that the most profitable things you can do for your company are recruiting, training and managing great salespeople. That salesperson you never had time to train should be contributing about $10,000 per month in profit to your bottom line. That's about $120,000 per year. Many dealers don't have time to recruit, train or supervise their team because they are out fixing a leak. I realize that leaks have to be fixed, but there is no fixed leak that will add $120,000 in profit to your bottom line.
That's not the worst thing about failing to actually manage your company. Many dealers in our industry do not have budgets, books, a monthly review or accountability meetings with key employees. When I ask why, they tell me they don't have time. Why not? Because instead of running their company, they are working for it--often at the most menial jobs. If the owner abdicates his responsibility to make policy and enforce it, who fills this vacuum? The employee you actually are paying to carry out orders and not to make policy decisions.Here's what you can do to improve the situation.
You may feel you just don't have enough time to get to the important things. Remember that we all have the exact same amount of time--24 hours each day. If you constantly are late, putting out fires and doing jobs that will never make you rich, it isn't that you don't have time. Successful dealers have the same amount of time as unsuccessful dealers. The difference is all in how they spend it. Remember that if you are not making a conscious effort to spend your time wisely, the possibility of it happening through chance alone is slim.
If you found a company on the stock market that had no system to check the books, no people planning for the future, no one auditing the results, budgeting and making plans for the future and a president who went out to dig holes and fix leaks instead of running the company, would you invest in it? If your company is run that way, you have invested your future and life savings in just such a company.