Top

Article Categories Archives: Insightful Talk

Decisions, Decisions, Decisions

Time to Decide

As the owner of a tow company you have to wear many hats. You have to be a sales person, and accountant, a computer expert, a mechanic, a tow truck driver, not to mention all the employee problems you will face. Decisions, decisions, decisions, you make them all day long.

When I ran my company I was no different than you. I faced the same decisions you had to make, but my success was based on how I handled the decisions I was faced with. My company consisted of 36 full time employees running 17 trucks to support close to 1,000 customers. My wife and I would talk about our 36 employees and how they relied on us to feed their families. That made decision making top priority.

Here are a few things that will help you make the right decision:

  1. Know Your Business – Gather all of the facts and necessary information that impacts your business. This is important, because you do not want to miss critical information that could make a difference in how you run your business.
    • Who are your best customers?
    • Who are your worst customers?
    • Who are your best employees?
    • Who are your worst employees?
    • What trucks do I repair?
    • What trucks do I replace?
    • What are my monthly expenses?
    • What is my monthly revenue?

    I knew exactly how many tows I needed each month to make my numbers, and on the beginning of each month the score card went to zero and you started all over.

  2. Results from my decision – Think about the decision you are about to make and what the results will be. Will the decision allow me to reach the goals I set for my company? If the decision is wrong, how will it affect my business? Think before you react.
  3. Ask others – I had 36 employees and I often let them help me make decisions relating to the business. I think it was because I always made them feel like a part of the company. If I had to make a decision on what type of truck to buy who better to ask than the driver of the truck. If I need to make a dispatch decision I would let my dispatcher make the decision and I would live with the results. Sometimes the wrong decision was made but we lived with it and kept on going.
  4. Relax – If it was a major decision like dealing with an employee problem I always want to make sure I was in the right frame of mind. Take a few deep breaths and try to do something that will make you feel more relaxed such as taking a 10-minute walk, listening to the radio or doing something that would help you de-stress.  You will feel better and gain a fresh perspective on your current situation.
  5. Don’t Procrastinate – Don’t put off important decisions, and don’t worry about your past mistakes just keep focusing on what is best for your company. To determine the best outcome for your business, always listen to your customer needs and have your finances and expenses organized. Customer satisfaction and making sure your company doesn’t run out of money are some of the important priorities of your business. If your business is going in the wrong direction call me and I’ll see if I can help.
  6. Learn from your mistakes – If you make the wrong decision then the next step is to learn from your mistakes and go from there. Learn what you did right and learn what you did wrong.

Remember you are not in this alone. There are many resources in the industry that would be glad to help you at no cost to you.

Even if they are just a sounding board for you to bounce ideas off of. If you do not have the expertise in a given area assign the task to someone else. I’m sure people ask you if you are a morning person or an afternoon person. It’s good to know when you are at your best. If it’s in the a.m. make your major decisions then. Do not do it when you are stressed. It’s good to know your stress level. When you hit overload take a break for 10 minutes. Allow yourself some down time to do the things you like to do like fish or hunt. When you are setting up your schedule for the day allow 25% of the day for yourself. I can’t tell you how important this was for me. I had good employees that I trusted to run my business which allowed me to do fun things with the family, the customer, or my employees. All these people were part of my decision making so I always found time for them. Decision making is easy when you have the resources to help you.

I’ve talked about things that help you make decisions, now let me point out a few things that will keep you from making good decisions:

  • Being Lazy – This is where you don’t check the facts or gather input necessary to make the right decision.
  • Unexpected Events – Think about things that can happen that you did not count on such as a death in the family, a key employee quitting, or an accident with one of your trucks. Always think ahead and anticipate things that could happen.
  • Can’t decide – You try and gather to much information or analyze the problem too much and the decision never gets made. Your fear of making the wrong decision will have a big effect on the business so you don’t make any decision.
  • Living in the past – Some people make poor decisions because they’re using the same old data or processes they always used. Such people get used to approaches that worked in the past and tend not to look for approaches that will work better.
  • Rely on others – Some decisions are never made because one person is waiting for another, who in turn is waiting for someone else’s decision or input. Effective decision makers find a way to act independently when necessary.
  • Lack of Technology – Technology is changing and you have to be prepared to change with it. Phone apps and GPS are a big part of today’s environment and you will have to change to stay in business.
  • Lack of Knowledge – You can’t know everything in all areas.

As the owner of the business you will always be faced with making decisions. Some will be big and some small. In a lot of cases there will not be a right or wrong answers. Learn to get other people involved with what you are doing so the decisions you face will be easy to make. Use your employees, your family, your friends, or call me. Use your resources and decision making will become easy.

Continue Reading

New Technology Gets You Tows

New Technology Gets You Tows
I was reading an article from a towing magazine recently and a tower, who has been in the business for over 40 years, was talking about what tow companies will have to do in the future to stay in business. He talked about the industry changing and small tow company’s better change or they will be taken over by the big companies. In today’s world you have companies entering the market with suite cases full of money and getting city contracts without owning a tow truck, and there are other new companies that want put the motor clubs out of business.
I have been in towing for over 20 years and not much has changed until now. As the article stated I believe companies will have to change to stay in the business, but I don’t think you are going to go out of business. I am working a product that tow companies can use that will provide the following:

  1. Get you tows you don’t have today
  2. Identify your truck location
  3. Create your invoice
  4. In some states create your tow ticket
  5. Provide a fair price for every tow
  6. Provide reporting for your accounting dept

This product will be free to the tow company, but your drivers must have a smart phone in order to use it. Most drivers have smart phones and they use them all the time to communicate with dispatch on tows they are trying to find. I got together with a group of people with technology experience, and people who have been in the industry a long time. We developed a product that will benefit:

Tow Companies

  1. We’ll find you tows you never had
  2. We’ll get you a fair price
  3. You don’t have to take every tow we send you
  4. No negotiating the price
  5. Don’t keep lowering price to compete
  6. Saves you money by replacing your GPS system
  7. Could be used as a dispatch system if you don’t have one
  8. Interfaces with quick books
  9. If you are using the product to run a motor club calls
    1. The motor club sends you the call
    2. We bill the motor club for you
    3. You get paid faster
    4. No arguing with the motor club

We also have the ability to interface with some of the larger dispatch systems. We are not replacing you current dispatch system. We are downloading tows from the phone into their dispatch system. If you don’t have a dispatch system we will provide you with a dash board so you can monitor all your truck activity. How many times have you run a tow and came back empty. Our product will look for tows for you on your drive back to the shop.
We advertise and market for you to help get you tows you never had. We will get tows all you need to do is have your phone ready to accept a tow. We will negotiate with the consumer or customer for you and send you the agreed upon price for the service. If we assign you a tow we will give you the price you will make for the tow. If you don’t like the price don’t accept the tow. The call will roll to the next nearest tow truck until someone accepts the call. The consumer will benefit by getting the closest truck to the tow and the tow company will save money by getting tows close to you.

Once you accept a tow we can now put you in direct contact with the customer. This will cut down on the number of GOA’s you have. The dispatch will see the driver accepting a tow but they don’t have to act as a go between with the customer. Our product captures all the information you need for the tow like location and car information. We can provide a report that gives you information by company name and driver. You can keep track of all the tows each driver is doing. We can also provide you with dollar amounts that can be down loaded to QuickBooks.

Our goal is to provide the tow company with more tows, at a fair price while cutting cost for each tow.

The Consumer

  1. Fair pricing
  2. Better ETA’s
  3. Consumer can watch truck coming to them
  4. Feels safe knowing where the truck is
  5. Finds a tow truck in the middle of the night in the middle of nowhere

In your life time it will happen at least once when you are in the middle of nowhere and often in the middle of the night and you have car trouble. What do you do? Where is a tow truck when you need one? Our product is the answer. The towing business provides a service to the consumer. Often times we get a bat rap by the consumer for a variety of reasons. Our product will eliminate some of the bad rap we have been getting while providing a better service to the consumer. The biggest complaint you here from the consumer is ETA. Our product sends the closest truck to the customer providing a quick response to each tow. The consumer will have the ability to watch the tow truck come to them. If it’s the middle of the night and a set of headlights stops, the consumer will know if it’s the tow truck or not. This will help provide safety for the consumer broke down on the side of the road.

Our goal is to provide the consumer with fast response at a fair price when they are broke down in the middle of the night in the middle of nowhere.

The Motor Club

  1. Larger network of tow trucks to meet their customer needs.
  2. Little or no communication necessary with the tow truck
  3. Better ETA’s for their customers
  4. Less fighting with tow company over price
  5. They save money internally.
  6. Improves Billing.

Motor clubs have millions of customers that need a towing service when they are in trouble. The biggest problem they have is finding a towing service that can meet their needs. I don’t want to get into the problems between motor clubs and tow companies. Instead, I want to fix some of these problems. Our product could double the network of tow companies available to the motor clubs. Our product when used by a motor club will improve communications between the clubs and the tow companies. It will provide accurate billing with a quick pay back to the tow company.

Our goal is to provide the best ETA possible for their customers.

We hope to be rolling out our new product sometime in August. Like everything new on the market people will be reluctant or afraid to try it. We will be there to help them implement this product when they are ready. No one product today will have such an impact on Tow Companies, Consumers, and Motor Clubs.

Continue Reading

Where is our Industry Heading?

I recently made a trip to the Florida Tow Show to gather Intel on a variety of topics that pertain to the towing industry. I was curious to see how tow operators were responding to the industry change, or if they even knew some of the changes that were taking place.

The show appeared to be successful and vendors selling products went home happy. There was a golf tournament with great weather and a chance to make new friends, but let’s look behind the surface of our industry and see what is really going on.

State Regulation:

Several years ago when I owned and operated a business in Texas there were laws passed that had a major effect on the industry. One association wrote a law requiring:

  1. All tow operators be certified
  2. All employees be drug tested
  3. Criminal background checks on employees
  4. Required certain size lettering on trucks
  5. Required signs posted at your storage yard
  6. Surface requirements at the storage had to meet certain standards

There were financial penalties if you did not meet the requirements. These changes cost the tow company thousands of dollars in licensing their company, their employees, and their trucks. Not to mention the thousands of dollars in fines that was issued by the state for not meeting the standards of the law.

Now let’s fast forward seven years and see where we are now. Many companies sold their business or just closed the doors. It’s tough for the tow company to constantly fighting with the state day in and day out over how to operate their business. The association I belong to hire a lobbyist to constantly watch the new laws that are trying to be implemented every session. Not every association can afford a lobbyist so they are stuck with the laws that get passed for our industry.

This just happened in Ohio where legislation passed laws that had a major effect on the industry in Ohio. The association was not aware of the laws and now has to live with the results. This will become the norm when other states start passing legislation effecting our industry.

In Texas the two associations worked together during this legislation period to make sure there would be no surprises with new laws. Unfortunately this is the only time the two associations work together.

Investors Taking Over

It did not take long for outside investors to see the money that could be made in our industry. Outside operators are coming into cities with a suite cases full of money and offering deals that are hard for cities to turn down. They look at our industry and see the expense side;

  1. Owning trucks
  2. Truck Ins.
  3. Fuel for the trucks
  4. Truck Operators

Then they look at the revenue side of the industry:

  1. Vehicle disposal
  2. Vehicle release
  3. The tow fee

The investor takes the expense side of the industry and passes it on to the tow company. Then they take over the storage yard and dispose of the vehicles while contracting with local towers to perform the tow. They pay the tow fee to the tow company and they make their money on vehicle release or disposal.

I know of at least two other outside companies ready to get into this type of business, and I’m sure more will follow when investors see the money. I am working on a solution that will help the tow company save part of their business.

Tow Companies Selling Out

If I had a pocket full of money I could have purchased no less than four tow companies while I was in Florida. It was sad because they were in the business for over 25 years and now they wanted to give it all up. I asked them what the problems were and why they wanted out. Here are a few of the reasons:

  1. The cost for equipment is going up and the tow fee is going down
  2. Technology is taking over, they are now good with computers
  3. Laws and regulations at a local level are impacting their business
  4. Cut-throat competition
  5. It’s not fun anymore

In the April issue of Tow Times an interview was conducted with the president of one of Michigan’s largest tow companies. The company has been around for over 50 years.

The following questions were asked:

What are the problems does our industry face today? Outside investors are going to take over the industry.

What role does the government play in the future? The government is influenced by insurance companies, and insurance companies don’t like tow companies. Need I say more?

What can an owner do now to save their business? Get educated on the business; learn more about the financial side of the business. The owner cannot continue to do what they are doing today and surviving.

What will the industry look like in 10 years? The big guy will buy out the little guy.

This is one person’s opinion. The answers given I think are correct, however I don’t see the little guy going away. I will tell you how to save your business in next month’s article.

Nationwide Regulations

Several years ago I attended a national association meeting and there were discussions about national certifications for our industry. As a person who lived through it in Texas we do not want that to happen. When Texas implemented the driver certification program; the test to be used in Texas was the national association test. When our association asked if we could use their test for our members we were told no. The national association had an exclusive agreement with the other state association that only they could use the national association test. FYI there were over 17,000 tow operators in Texas who paid $125 for the test. That money was going somewhere.

At the meeting in Florida a national association held a meeting to discuss testing nationwide. I was told there were several state associations that were not happy with that meeting. I hate to see where this might go, but my experience tells me that all testing should be done at a state level and if there is money to be made let the state associations make it. State associations should keep an eye on what is trying nationwide and how it will affect their business.

So here is my trip report and there was a lot more details but I didn’t want to use up the entire magazine on this trip. Watch for the solutions to the future in next month’s magazine.

With the economy the way it is all small businesses are struggling to survive. As I travel around the U.S. I talk to towers that get creative and come up with additional ways to generate revenue.

Continue Reading

Revenue Streams

Additional Revenue Streams With the economy the way it is all small businesses are struggling to survive. As I travel around the U.S. I talk to towers that get creative and come up with additional ways to generate revenue.

1.One company got rid of his heavy duty business. This cut down on expenses, and he opened up a convenience store.
2.Another tower from Alabama also open up a convenience sore.
3.There was a tower in Shepard Texas whose wife had a nail salon and tanning salon in the front office of their storage lot.
4.Another company did a u-haul rental from his storage lot.
5.Towing junk cars and running them across the scales.
6.RV and boat storage.
7.New car storage for car dealers.
8.Store cars for other tow companies.
9.Storage units at your storage yard.
10.Overnight parking for tractor trailers as they pass through town.

If you have room on your storage yard there are ways to make money with it. Go to car dealers and ask them if they want to store new cars on your lot. You will be their inventory lot. If you think about it, your storage yard is fenced, some are staffed 24/7, some have security cameras, that has to be of value to someone.

I recently talked with a large company that was going into the grocery delivery business. People would e-mail their orders in and this company would deliver the groceries. They asked me if they could contract tow companies to be their delivery service. They are going nationwide with this service and they knew I knew tow companies all over the U.S. I was very much interested in the concept and this would be a great way for tow companies to add additional revenue when they are not towing. The pay was actually more than some tow fees the tow companies were getting for some of their tow contracts.

When people ask me what they should do I tell them to start holding their own auctions. Check your local laws but where I Am if you have your own storage lot you can hold your own auction. There is a little more to it than that, but it is easy and you can make some good money. Then you grow the auctions where you auction off other peoples cars and charge a small buyers fee and the next thing you know you have an extra ten thousand a month. I’m going to start working the local body shops and help them dispose of vehicles they get stuck with. You split the revenue with the body shop and you both make some money on cars the body shop would have lost money on. Over a 7 year period my tow company auctioned off over 20,000 cars at an average of about $500 a car, do the math. Anyone interested or needing help feel free to call.

Here are a few guide lines to follow to help you increase revenue;

  1. Write down where you are making money, and where you think you are losing money. If you need help call me.
  2. Develop a clear vision of where your industry is heading to begin to project where things may need to change as the industry evolves. Again, write it down so that the vision can be reviewed and verified by others.
  3. Thoroughly research the competition to harvest their better ideas. Yes, those talented people hard at work for your competition do have very good ideas too.
  4. Listen to your existing customers and identify what they want.
  5. Identify opportunities that your company could fulfill. Many companies desire the so-called “low hanging fruit” but you should also look for the opportunities that require a ladder to harvest some richer opportunities that might be shunned by competitors. Evaluate the cost and see if it’s worth it to go after the new business.
  6. Objectively evaluate your marketing and sales, If it’s still running pretty much the same as it was a few years ago, you’re missing opportunities. The phrase “We’ve always done it that way” doesn’t work anymore. You have to start keeping up with an ever-evolving business world.
  7. Listen to your employees, by drawing upon your own people to help imagine your next big thing. Especially listen to those closest to your customers even if they are at the lowest tier on your organization chart.
  8. Consider how your service could be evolved to exploit a new market. Sometimes little changes can yield big new product successes.
  9. Assemble the above into an action plan. Write it down, because an actionable plan in someone’s head is understood by only that one person. Your team can’t even tell if it’s the best plan if they can’t see it.

I talk to tow companies that have been in business for over 25 years and have not changed anything. It’s time to take a good look at what you are doing and start making changes if you want to stay competitive. Sit down with all your employees and ask the following questions:

  • How can existing products or services be repackaged into a new source of revenue?
  • How much- if at all- can the Internet impact our revenues?
  • How much market share do we have now and how much more can you realistically take?
  • How can we realize new revenue from what we are already doing? What specific growth skills, knowledge, talent, and resources will be necessary to enter a new market?

Once you have identified changes to be made, you need to focus on a plan to get from here to there. The plan is used to maintain progress toward tapping into that new revenue stream. If you need help developing your plan I will be glad to help.

There are many opportunities to change your business and generate new revenue streams. Be creative and use as many resources that are available to you to make 2015 your best year ever.

Continue Reading

Your Business in 2015

As an owner of the business it’s up to you to stay in tune with all the changes taking place in the industry. It’s hard for you to do it all and that’s why I encourage all tow companies to join their state towing association. I know you may not like them based on past experience, but as changes take place you will need them more than ever. If you want to stay ahead, invest in your skills as regularly as you can. Invest in materials that will help you with personal growth. Invest in materials that arespecific to your industry and keep yourself up to date with industry news and look for the patterns and trends.

Too many businesses fail because they don’t adapt to the changes in their market. In our industry we must continue to improve, learn, and change. The world is changing at an incredible pace, and in order to stay ahead we have be committed to learning new things, upgrading our skills, and being aware of our surroundings. In order to be consistently effective in our industry we must observe the changes going on in our industry, and market on a daily basis. When you can change faster than those changes that impact our industry, you can stay ahead of the game.

Things that have a direct impact on changing our business:

1.Our customer – Our customers are changing their business and they expect us to keep up with the changes. Remember we are a service business and we have to make sure we have the equipment necessary to provide that service. Our customers are more demanding. They want your services faster and cheaper and if you don’t provide what they need they will find someone who will.

2.Regulatory change – Several years ago the state of Texas passed laws that required all drivers to be certified, drug tested, and criminal background checks run on every employee. Then they started enforcing all the other laws that already existed. I can’t begin to tell you all the changes we made just to keep our doors opened. I read just recently that the state of Ohio is passing laws that will have an impact on how towers will do business in the future. Other states will soon follow making it harder and harder to survive. In most cases these changes do not benefit the tower. When you are hiring new employees there are laws that tell us what we can or can not ask. All these changes will have an impact on how you do business. If minimum wage is raised to $15 we will have additional expenses we did not have before.

3.Healthcare – When the new healthcare laws take effect we will have to provide healthcare for all employees or pay the penalties. There are so many laws in that bill that no one even knows what affect it will have on your business. The government keeps delaying the implementation but new expenses are coming.

4.Cost of living increases – Insurance rates are higher, the price of a truck continues to increase, and you never know what the price of gas is from day to day.

5.Industry Change – We now have companies that bid on your business and don’t own trucks. I think impound yards are the future and will be separate from towing. There are companies now designing phone applications that promise you tows. Most of the owners I talk to have been in towing for a long time and it’s difficult for them to change. I’m not sure what the new generation of tower will look like but I do know they will be running their business from their phone.

6.Your Employees – Everyone is in survival mode including your employees. They need to provide for their families and they will go where ever the money is, so you will have to be competitive with employee salaries.

That’s the bad news. There are some things you can do as an owner that will help you get through these changing times and prepare you for 2015. They are things you never had to do before, but as you do them it will only make your business better. I talked to a lot of towers that would sell their business tomorrow if they could. That is not the answer. I love the industry and that’s why I stay close since I sold my business. I sold my business only because two different people during a two week period walked into my office and asked to buy my business.

Here are a few things you can do to make 2015 a successful year.

1.Educate employees and other individuals affected by the changes. Take the time and resources to educate employees during times of change. Keep them informed and confident in your company’s efforts to remain successful and strong. Understanding what is causing the changes in an industry will allow for better preparation and adaptation.

2.Maintain consistent service levels. Just because the industry is changing doesn’t mean your brand should; consistent service levels implies a sense of stability during these changing times. The quality of the services a company provides should also never diminish, no matter what obstacles are encountered.

3.Uphold your company’s mission. A company’s mission should never deviate from its original goal. When adapting to any changes, refer to your mission, and let that guide your decisions. I learned the term mission statement back in my computer days and it is nothing more than a few paragraphs defining what you want your company to be. If you don’t know where you are going with your business you will never get there.

4.Stay true to your business plan. While you may need to make a few adjustments on thepath to your ultimate goal, a solid but flexible business plan should help your company withstand any industry changes. Most tow owners don’t have a business plan. I had two buyers interested in my company because I built a successful company by following the business plan I had in place. Don’t be afraid of the term business plan. It’s nothing more than steps you will take to perform your services. Write it down on a piece of paper and look at it every day. It will help to keep you focused.

5.Focus on what you can control. Understand how the legislation will affect your company, and then try to control what you can. Focusing on impacts that are out of your hands is a waste of time. By narrowing in on what you can control, including your business proposition and high-quality customer service, you allow yourself the opportunity to succeed.

6.Budget accordingly. Plan for the worst, and hope for the best. It is better to be prepared for unforeseen expenses than to scramble to cover them.

You need to always go back to the basics and build off of them in order to continue growing your business. Keeping things simple essentially leads to success and increases the ability to survive while your competitors drop off and look for other ways to make money.

Continue Reading

What are your plans for 2015

The New Year has kicked off and this is a good time to take a look at your business and make changes or adjustments to your business operates. You know the saying “ the definition of insanity is doing the same thing over and over and expecting different results” Well, that’s how a lot of businesses operate when going into a new year. When my wife and me ran our business
we would find a nice place to go and hide for a few days between Christmas and New Year and layout our business plan for the next year.

We would look at things like:

1. Employee evaluation (Who do we hire and who do we fire)
2. Employee payroll (Who gets raises who does not)
3. Do we need new trucks or fix the old ones
4. How much money do we need to implement the changes
5. Who are our best customers and which ones do we want to give to our competitor
6. What additional services can we offer to our customers
7. What new revenue streams can we implement

You get the idea. I can’t tell you how helpful this get away time was for us. When the New Year started we hit the road running because we knew exactly what we wanted to do. So far this year I have four business owners I am working with to help make their business successful this year. Two of them are new startups and we know how hard it will be for them. We are sharing ideas
so we don’t reinvent the wheel as we go.

You‘ve heard the old saying “If you don’t know where you are going, how will you get there?” Too many business owners start their business without a plan. They simply “open their doors” for business and then expect to succeed. I know it’s hard to find time to make a plan for the year, but I assure you it’s the most important thing you will do this year. Simply write down a few
things you want to accomplish this year and put them where you can look at them every day. Here are a few things to help you get started:

Your Money

Many businesses will have problems in the first few months because the owner runs out of money. That’s why it’s important to know what you want to accomplish before you start, so you know how much money you will need to accomplish your goal. It’s important to know how much money you are spending each month, and how much money you are going to make each month. If you’re a big company you probably use some sort of accounting system to keep track of this for you. The question is how often do you look at your books and make changes necessary to increase your profits. Running out of money is a result of poor planning.

Goals and Objectives

In your planning process create goals and objectives for your business. Break down goals and objectives by quarter – in other words, identify all of the things that must be done during the first quarter, the second quarter, the third quarter and the fourth. Look at the things I listed above and make them some of your goals.

Measure Goals and Objectives

All too often, once a business starts operating, the owner becomes too busy in the daily operations to take the necessary time to assess the progress of the business. It is fine to establish operational goals and objectives, but you also have to measure how well your business is performing against those goals and objectives. Measuring against the identified goals and objectives will tell the owner whether or not changes are necessary. Keep in mind that you goals can change based on business activity. That’s ok, that’s why it’s important to monitor your business operations monthly.

Watch Your Cash Flow

There is an old saying in business “Cash is King”. None holds truer than in towing. It’s important to know where you are making your money and where you are spending your money. That’s why monitoring cash flow is extremely important. It is really as simple as this: if you continue to spend more money than you bring in, you will soon be out of business.

Cash flow is all of the money that you take in each month minus all of your expenses.

Cash inflow is cash sales and accounts receivables collected.

Cash outflow is all monies paid for inventory purchases and operating expenses (rent, heat, hydro, salaries, marketing expenditures, etc.). Watch your money.

Knowledge is Power

Knowing where the industry is going will determine how you meet your goals and make money. Join an association, attend a trade show, or subscribe to “Tow Professional Magazine”. These are great ways to know what is going on in the industry. Its changing and you better be prepared to change with it.

What are the trends in your industry – is it growing or declining? What are new opportunities that can help you grow? Where can you position your business in this industry in order for your business to succeed? Will new technologies have an impact on your industry? I’m always surprised how many companies don’t know where they are making their money. Know who your best customer are and reward them. Know who your worse customers are and give them to your competitor.

Understand your industry will determine where you are going in 2015

Be Different

Customers need a reason to come to, or to want to do business with your company. If your products or services are the same quality and prices as your competitor(s), why will people use your service? They already have an existing service. If you can offer a different or better service, better quality, lower prices, broader selection, faster delivery, better location, etc.), prospective customers will want to do business with your company.

Every business owner must objectively ask this question “If I were a customer, why would I want to do business with this (my) company?” If you cannot identify two good reasons, then rethink your positioning and your strategies.

Know Your Competition

Some business owners underestimate the competition. When I ran my business I always knew who my competition was and what they were offering. I never copied anything they did but it was important to know what they were doing.

The best way to get new business is to offer something new. Don’t ever let price determine your business. If you compete in price you will be out of business soon. You are a service provider and the best service wins all the time regardless of price. Make one of your goals to provide a new or improved service. Simply wearing uniforms, or driving clean trucks or improving
customer service will put you ahead of the competition.

Increase profit

If one of your goals is to increase your profit margins it’s a simple formula. Lower you expenses and raise your revenue. Don’t spend more than you make. You would be surprised how many business owners don’t know their expenses or their revenue it’s hard when you are running calls all day. One of your goals for this year should be to increase profits. The first thing you want to
do is identify all your expenses. I have some forms you can use to do this just give me a call. Once you know your expenses you will know how much money you need to cover your expenses. I will be happy to help you with this.

Pricing your services will determine your profit. Remember you are a service provider and if your services are good your customers will pay for it. Don’t compete with your competitor concentrate on providing the best service in the industry. If your selling prices are the same as your competitors and their operating costs are lower, their margins will be higher. If that is the case and you get into a price war with a competitor, you will not survive. You will have to find ways to reduce the cost if you plan to last in this industry. The lowest cost producer will always win a price war.

Poor Management Skills

I teach this in all my seminars, your employees are you biggest asset. If you plan on meeting your goals your employees are the one to make it happen. Frequently customers do business with companies because they like the people that they deal with in that company. If you do not treat your people fairly and with respect, you may have a constant turnover of employees. After a while, due to constant turnover, customers may become wary about dealing with your company.

I fine managing employees is the hardest job for most business owners because they never got educated in the skills necessary to manage. My website could be a good solution to improve your management skills. Treat your employees well and they will enthusiastically help to grow your business.

I hope this helps you know what you want to be in 2015.

Continue Reading

Dealing with Bad Employees

I can remember when I first got into the towing business. I was in the computer industry for 35 years dealing with white collar computer professionals who thought they knew everything. My first exposure in towing was operating a private property towing company and dealing with drivers who thought they knew everything. I can remember screaming at them and them screaming right back at me. All the employees in the company would hear me arguing. I knew this was not good for the company and I would have to change. It seems like every company has that one or two employees that just give them fits.

I can remember teaching a class at the Baltimore tow show and a manager coming up after the class and telling me that he hates his drivers and they hate him. That’s a bad position to be in because it creates a problem for your entire company. We had a long discussion and I tried to make him realize it’s the drivers that make him money and he would have to change not them in order to make it work. As an owner it’s sometimes hard to give in to employees but you have to look at what is good for everyone working there. A good employee with a bad attitude can hold your entire company hostage.

Let’s look at a few things we can do when dealing with that troubled employee:

1. Listen. Often, when an employee is difficult we stop paying attention to what’s actually going on. We’re irritated and we think that employee is hopeless, so we ignore the problem and hope it corrects itself. The best shot at improving bad situation lies in having the clear understanding of the situation. This includes knowing the tough employee’s point of view. In most cases, simply listening can save the day. You may hear about a real problem that’s not the employee’s fault that you can solve. The tough employee may start acting very differently once he or she feels heard, you may discover legitimate issues he or she has that need to be addressed.

2. Give clear, behavioral feedback. Most Owners or managers will go a long time complaining about bad employees and not ever giving them actual feedback about what they need to be doing differently. Giving feedback is one of the most uncomfortable things a manager has to do, but it’s a important part of addressing the problem. When you are giving feedback try not to put them in a defensive position and give them specific information they need in order to improve.

3. Document. Whenever you’re having significant problems with an employee, WRITE DOWN THE KEY POINTS. I can’t stress this strongly enough. If you are planning on firing someone it’s good to have documentation about their bad behavior. This helps them understand why you are letting them go and it also protects you. Remember, if you’re able to solve the problem, you can just breathe a sigh of relief and put your documentation back in the drawer.

4. Be consistent. If you say you’re not OK with a behavior, don’t sometimes be OK with it. Employees look to see what you do more than what you say. If, for instance, you tell a driver they need to inspect the truck before they get in it and they don’t and you let them drive you will never correct the problem. I had a driver that I would argue with all the time. Finally I would send him home. I would lose his tows but he had to see that there were consequences if he did not listen. Pick the standards you’re actually willing to hold to – and then hold to them.

5. Set consequences if things don’t change. If things still aren’t improving at this point get specific. Let them know that you still think they can turn it around but here is what they have to do and give them a date to do it by. If problem employees don’t believe their behavior will have any real negative impact on them – why would they change?

6. Work through the company’s processes. Good managers hold out hope for improvement until the point when they actually decide to let the person go. At this point you will have documentation to protect yourself. The employee will not be surprised when you let them good because they know you tried to resolve the problem.

7. Don’t poison the well. All too often, poor managers substitute bad-mouthing the problem employee to others rather than taking the steps needed to resolve the problem. No matter how difficult an employee may be, good managers don’t trash- talk to other employees. It creates an environment of distrust and back-stabbing, it pollutes others’ perception of the person, and it makes you look weak and unprofessional.

8. Manage your self-talk. Throughout this process, make sure your self-talk is neither positive nor negative. Thinking to yourself, “This guy’s an idiot and will never change,” isn’t useful, nor is thinking, “Everything will turn out fine, he’s great, there’s no problem.” making sure that what they say to themselves about the situation is as accurate as possible. For example, “His behavior is creating real problems for the team. I’m doing what I can to support him to change. If he does, great, and if he doesn’t, I’ll do what I’ve said I’ll do.”

9. Be courageous. Firing someone is the hardest thing you can do. If it gets to that point, do it right. Don’t make excuses, don’t put it off, don’t make someone else do it. If you learn to use these ‘good manager’ approaches when you have a difficult employee, then no matter how things turn out, you’ll end up knowing that you’ve done your best in a tough situation. And that may be the best stress reducer of all.

It may be impossible to change an employee’s bad attitude, but it’s not impossible to correct the problems bad attitudes cause.

Make the distinction between bad attitudes and bad behaviors. What seems like an attitude problem to one person may not seem all that bad to another. Complicating the matter even more is the fact that it’s nearly impossible to document an attitude, and documenting instances of employee behaviors is the key to correcting them. Instead, determine how an employee’s bad attitude is contributing to bad behaviors that are easy to describe and document.

Document the employee’s bad behavior. Include dates, times, any other employees who were present or involved, and the details of the incident, including any supporting documentation if any. If the employee’s behavior is a violation of any organizational policy, refer to that policy and limit the documentation to these details only.

Schedule a meeting with the employee to discuss documented incidences of bad behavior. If the documented instances involve one member of management specifically that is not you, sit in on the meeting. Including an uninvolved third party in the meeting can defuse a difficult situation, while also protecting you from claims of discrimination or harassment by the employee with the attitude problem.

Explain how the documented behaviors impact the organization, outline the consequences if the behaviors violated policy, and ask the employee what he or she would like to do to remedy the situation. Develop a plan for change with the assistance of the employee. Give the employee a specific amount of time to implement the plan, and set a time to reassess the situation after the time period is up. Let the employee know what the outcome will be if the plan does not work.

The last thing you want to do is let an employee go, especially a driver. It was hard at first for me to deal with some bad attitudes, but I was able to resolve the problem by working with the employees to improve their attitude and mine. Once we were on the same page we all lived happily ever after.

Continue Reading