Since
1992,
NSPG has been providing the tools that allow contractors to
increase profits and minimize business hassles. With our
simple-to-use-tools, you can make being a business owner
what you always wanted to it be -
successful, profitable and rewarding.
 Think Twice before You
Make
That Cut!
Every day we see more news
telling us how bad the economy is. How no one is
making any money. How no one is spending any
money. Your response to your own local economy
needs to be based on real information about your own
business operations. Blindly cutting because
everyone else is cutting is probably not the best way to
weather the economic storm.
Last week I spoke with a client who told me how busy he
was. He had just put three more trucks on the road. His
techs are still working 50 hours a week, so he wants to
hire three more techs.
A few days later, I got a call from another client in the same
market who tells me he is really slow.
What’s the difference? Here's a first hand
example of how two businesses are dealing with current
economic conditions.
This weekend I was doing a little landscape cleanup
using my 10 year old leaf blower that
 decided to crap out. So I took a trip to my local hardware store. I prefer to
deal with the local business when I can. I look around
for a new leaf blower, but I could only find one electric model. So, I asked the customer service rep,
“Where are all the Gas models you use to carry?” He told
me that since the economy has gotten bad, their sales are
way down. They have a new policy of not keeping them in
stock, but he could order a gas model for me.
I thanked him for his help and went up the road to a
Lowe’s home center, I quickly spotted a wall of leaf
blowers with different prices and options. I decided on
the one to buy, and took it off the shelf. “Excuse me.
Can I ask you a question?” a person from behind me
called out. I turned around, and the guy asked why I
chose that model. I explained that this model has more
power so it will get the job done faster. Then he’s say what one do you think I should buy?
 Well I asked him how big his property is, how much
time he has to get the job done, and how much he wants
to spend?. Wait a minute now. I had become an unpaid
salesman for Lowe’s. What’s going on here? I
was doing what we do here every day at NSPG world
headquarters - helping people make the right choices
based on their own specific needs.
Three other people were now listening to the
conversation. A couple of them decided to buy the same
model which was, by the way, the most
expensive. So I asked them why they chose that model.
They said they wanted to get the job done faster, and
their time was worth the money. No Commission for
me, but, to Lowe’s credit, they had the product on the
shelves even in a slow sales market.
The local hardware store that I wanted to patronize
had decided that the economy was not good enough to
invest in the inventory they would normally keep in
stock in a good economy. So, bad news became a self
fulfilling prophecy - no inventory led to no sales,
hence a slow down in business. Their decision to
reduce their inventory led directly to lower sales.
Lowe’s had the product on the shelves, and got the sale.
Sales might be slowing a bit for Lowes, but they will
surely keep slowing for the hardware store without any
stock. By the way, Lowes just announced stronger
than expected sales for the quarter, but they are making
adjustments to deal with the overall slowing economy.
Going back to the beginning of my story, I had asked
my client (Service Business owner) who was busy growing
the business in this economy how he's keeping so busy. He
told me he had increased his advertising overall, but
had reduced the low performing, low return advertising.
Actually, he told me he had cut his yellow page directory
advertising by 75%, and put his advertising dollars into
more productive media like Internet and direct mail.
This allowed him to grow his client base at a
substantially lower cost. He knew he could make
this move because he tracks the performance of all of
his advertising dollars.
 I asked the client whose business had slowed down
what he thought the main reason was for the slow down.
He told me, "It’s the economy stupid. I have had
to cut back because of the economy. I
let my least productive employees go, and forwarded all
calls to my cell phone and answering service. But
it hasn’t helped. We seem to be getting fewer
calls and winning fewer jobs."
He has no idea what his cost per client is or what
advertising/marketing is or isn't working for him.
He simply decided to cut back on all of it. His
economy has slowed much like my local hardware store.
By blindly cutting across the board, he has eliminated
some of the things that had been bringing in business.
 Without benchmarking employee performance,
advertising effectiveness, telephone close rates, and
other critical business factors, he made cuts that
are probably costing him sales. Like my local
hardware store, he is virtually assuring that his sales
will slow because of his own actions.
Fortunately, we are finding that many businesses are
now scrambling to do things right. They're
starting to Crunch their Numbers based on the current
situation. They're printing new price books that
include their targeted expense cuts to be sure  that they
are as price competitive as possible while still
reaching their profit goals. In good times and bad
times, knowing your costs, and making the proper
business adjustments will pay off.
- - - - - - -
Give Mike Conroy a call to
discuss your business, your numbers, your performance
benchmarks, or your flat rate
books. Take advantage of his experience working
with hundreds of companies like yours to help you achieve your own business success.
Measure Monthly, Adjust Quarterly
& Achieve Annual Profit Goals
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Finally! Your business can be easier to
manage every day. |
On-Line
News
Bagdad Electrician.
Effikal Vent Dampers Recalled.
WarmRite Discontinued
Joe the Plumber's Book due December 1
Plumber - Firefighter
Apprentice of the Year
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In This Issue |
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Phone 800 841-8542
Numbers Cruncher
National Standard
Price Guide
Performance Dispatch Plus
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The freebie of the month is a web site or
product that we feel gives you something worth looking
at or using that costs you little or nothing.
The
Small Business Administration offers a menu of free
business related online courses. The Flash based
slide shows include courses on starting your business,
marketing, finance, e-commerce, and more.
These
courses are designed to be completed in about a half
hour, so they won't eat up too much of your valuable
time. Many of them start with a
registration form, but skipping the information section
and clicking the Submit button opens the course material
anyway.
A 30
minute course will not give you in depth knowledge about
most subjects, but it may be a good place for you to
start.
If you have
a favorite Free site, let us know.
nspginfo@nspgweb.com
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Quotations
It is
better for civilization to be going down the drain than
to be coming up it.
Henry Allen
A wise man
will make more opportunities than he finds.
Sir Francis Bacon
He's the kind of a guy who
lights up a room just by flicking a switch.
Unknown
I can picture in my mind a world without
war, a world without hate. And I can picture us
attacking that world, because they'd never expect it.
Jack Handey
When I was
a kid my parents moved a lot, but I always found them.
Rodney Dangerfield
The saying
"Getting there is half the fun" became obsolete with the
advent of commercial airlines.
Henry
J. Tillman
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