Demand is up, winter is coming and there is limited time left to maximize opportunity and make more money. This is the time of year to review where you stand and identify what you need to do by year-end to ensure a profitable year.
1. Fix your targets. Reset and raise your gross margin targets: at least 51 percent for companies over $1 million and 61 percent for companies under a million. Your enhancement sales should bring in at least 56 percent. Aim higher by removing the self-doubt that is holding you back, and do the same for your salespeople. Give salespeople weekly feedback on their selling and estimating.
2. Refresh your people. If you (or your key employees) have skipped taking breaks, do it now. Turn off your cell on weekends and learn to decompress. Get home in time for dinner and reconnect. Go on that weekend fishing or canoe trip with your family or friends. Make sure your staff is refreshed and ready to hit the ground running.
3. Amp up incentives. Reaffirm existing incentive plans: Put the data out there and make sure your people know how they are doing and what they need to do to hit their incentive goals. Give frequent feedback on data (goals vs. actuals) as you head into fall — weekly and monthly for maximum impact.
4. Reforecast the budget. Reforecast your budget so you know how you are doing. Take January through September actuals and plug them into your 12-month budget: The resulting year-end number will show you where you are heading. If you are heading in the wrong direction, reforecasting will tell you by how much so you can focus on corrective action. For those making money, this will help you keep the profits you have made thus far, and not give them back through year-end.
5. Finish mid-year reviews. Do mid-year reviews at the foreman level and above. Feedback equals attention equals motivation. Give feedback on what you want them to focus on through the end of the year. Tell them what they should keep doing, stop doing and start doing. Ask them where they see areas for increased efficiency in the company. Engage them even more, and you will get even more.
6. Reset upsale goals. If outside sales are slacking, spend more time with existing clients to improve sales and margins immediately. Focus on both existing install and maintenance clients. I never experienced a year that couldn’t be improved by going back to the trough (your current client base).
7. Reduce cash drags. Cash is king — any outstanding accounts receivable need to be dealt with immediately and brought up to date now before you get busy again. Improve cash flow by bringing accounts payable levels in line with accounts receivable levels. Just as critical is to ensure you are not upside down on your maintenance and enhancements work; don’t spend more on the job than your client has paid you.
8. Reposition C players. Assess your staff by putting them into four categories: A, B, C and D. Make sure your As and Bs feel appreciated. (Not sure how? Ask them.) Make decisions on your C players: If you are not getting enough productivity and passion from them, repositioning them may breathe new life into their performance. Deal with your D players, too, but spend most of your precious time investing in your A and B players.
9. Keep the balloon pumped up. Companies are like balloons with tiny holes — they slowly lose their form and focus if they are not kept pumped up. Meet with your employees as a group and regularly share with them how the company is doing and what needs to be done to end the year on target. Keep them apprised. Only you can keep the balloon pumped up.
Pick one or two of these areas to implement immediately this fall. Don’t try to execute all of these at once; tackle one at a time.