Test Yourself: Seven Tough “Taking Stock” Questions for Business Owners
January 8, 2013
“He who asks questions cannot avoid the answers” — Cameroonian proverb
Ano Nuevo, vida nueva” is a very old Spanish proverb that translates, “a new year, a new life.” And even in our modern times, many feel that a new year on the calendar means a new start, a better life ahead. However, another old saying counters, “If you do what you have always done… you will get what you’ve always gotten!”
That’s right, just clicking off another year on its own isn’t going to change anything unless you a) take stock of where you are now and b) plan what to improve for the coming year. (Can’t we all agree that a year is a terrible thing to waste?)
So humbly submitted, here is my “Taking Stock” question list that analyzes where I see too many cleaning/restoration entrepreneurs stuck right now. For those who see their business and/or life reflected in one or more of these negative scenarios (hopefully not in all of them!), I’ll also share a few thoughts on possible solutions for the New Year:
Have I decided who I am and what I want to be?
Sure, when you started out you took every job that came in. (Desperation will do that to you!) But once established, it is time to stop trying to be all things to all people.
Solution: Focus on your top profit-producing areas and your personal/family goals. Meditate on “what you want to be when you grow up” and, most importantly, what sort of legacy you want to leave behind. Then, once you have chosen your business model/image, ask yourself…
Am I doing inconsistent “butterfly marketing?”
Too often cleaners and restoration contractors flit aimlessly from one marketing scheme to the next, vainly searching for the one sure thing. The result? Frittered away advertising funds, missed opportunities, and even worse, years lost on your growth curve.
Solution: Test, test, test. And recognize that instead of depending on only one method, your marketing should be synergistic, that is tapping into multiple avenues. Then when you find a marketing strategy that works, stick with it. (I’m always amazed at how many SFS attendees confess after class, “I used to do that. Not really sure why I stopped…”) Now here is an introspective question that doesn’t get asked nearly enough…
Have I worked alone on the truck for too long?
Sure, as we discussed above, employees can be a headache. But remember that despite your very best efforts, your body is only going one way over time. (Hint: None of us are getting better with each passing year.)
Solution(s): Seriously reflect on two things: Are you capable of running a multi-truck business and do you really want to “get big”?
If your answer is “no” that’s OK. Not everyone should “get big.” But if you crave the simple and care-free life of a lone wolf owner-operator then recognize two things: 1) Your one-person cleaning business will not sell for enough to retire on (if you can sell it at all) and 2) Your wand slinging days will probably end before your income requirements stop! So immediately start developing an alternative source of income to fill this financial gap.
What to do? Can you morph a hobby into a lucrative side job? Or consider buying distressed properties now for rental income later. But come up with something because only an insane person would depend on social security in the future!
On the other hand, if you honestly want to “get big” and are capable of doing so, then it’s better to get started now! Your body isn’t waiting for you! Don’t waste another year waffling on what to do. However, it isn’t a rosy picnic hiring employees either. For example…
Am I being held hostage by my employees?
Once an employee recognizes that you need them more than they need you, the honeymoon is over. Yep, the old law of supply and demand kicks in and even the best employee will shamelessly take advantage of the situation you have allowed to happen! (Can you blame them?)
Solution: Treat your employees with respect and dignity. Reward, recognize and praise them. But never be afraid of your workers. Rebuild your courage by constantly searching for prospective employees. Ideally, you want a list of pre-selected, quality new hires waiting on the sidelines, eager to work for you. (“Desperation hiring” was always a nightmare for me!)
Then develop step-by-step training systems that let you easily get a new employee up to speed. I found I put off firing marginal workers because of the agony of hiring/training a new one. It is incredibly liberating to have a written system that easily orients new employees. (For a free sample Value Added Service training outline that I used for my new hires, just write me at stoburen@StrategiesForSuccess.com and put the phrase “VAS training outline” in the subject line.) But first, a warning question…
Have I stalled out on “the road in-between?”
Given No. 3 above, eventually almost all cleaners hire one or more employees. Making this transition puts them in a difficult spot, what I call “too big but too small.” Huh? Adding employees/trucks means a cleaner’s business will be “too big” to enjoy the simple life of an owner-operator. But his or her growing operation is still far too small to delegate out managerial duties. Translated, this means everything crushes down on an overwhelmed business owner.
Now this “road in-between” is a necessary (and very challenging) phase you must go through if you want to grow your company. The problem is I find way too many cleaners have stalled out. So they hunker down and endure this agonizing “too big but too small” business model for their entire career!
Solution: Once you decide to go big, then work every day toward creating a “critical mass” business, one that will run with you or without you. Document, simplify and streamline every process in your company, plus find quality employees that will share this vision of a company that works. (Most don’t.) Of course this process will require funding so now ask…
Am I behind on or even ignoring my financials?
Sure, in the beginning you did the job – you spent the money and hopefully the process repeated itself! But now you have something called “overhead.” (Employees, payables, loan payments, obligations and yes, a hungry family to feed!) In today’s tough business climate, just glancing at the bottom number of your out-of-date P&L isn’t enough.
Solution: Remember Chuck Violand’s immortal words: “Every number (and percentage) tells a story.” So ferret out where your money is dribbling away in business. It is easy to gloss over seemingly small amounts. But it is much better to save $10 in repeat overhead than to book a $100 or even a $500 job. Remember to compare percentages over time – these will give a more accurate picture of your company’s financial health trends. (NOTE: Your monthly income statement is “old news” even before it hits your desk. You need a weekly one-page financial “State of the Union” report. For a free sample, just e-mail me at stoburen@StrategiesForSuccess.com and put “Flash Report” in the subject line.) And speaking of financials…
Am I paying myself first?
No, I’m not talking about drawing out your “beer and chips” money. (This priority somehow never gets overlooked!) But are you religiously and regularly funding a personal investment plan? For example, if you “sweep” just $100 per week into a tax-deferred account that averages 8% per year (which the stock market over time historically will easily do), after 30 years you’ll have over $650,000 in your retirement nest egg! Now are you really going to tell me you can’t easily set aside a measly $100 bucks a week? Really?
No matter what answers you came up with on these seven “Taking Stock” questions, I remind every SFS class, “It is always better to have money than not have money. Why? Because personal wealth allows personal freedom!” (In my next “To Your Success” article I’ll share the “3-Legged Stool” approach to wealth in this business.)
So let me end this tough introspective quiz with one more defining question for you to ponder: “When will I achieve my new life of financial and personal freedom?” You are part of a great industry where you can achieve your goals… if you stop now and “take stock!”