By Dan Messina
It’s not uncommon for towers to get in a comfort zone, especially when things are going good, and they continue to do the same thing every day. The owners love to take their trucks out and tow. That’s what they are good at and that is what they know best, but in these ever-changing times, it is time for the owners to expand their horizons and look for ways to improve their businesses.
I have developed a list of things you might want to do to improve your business.
1. Know your numbers.
Cash is the lifeblood of any business. Start improving your business by understanding your cash flows. What services generate most of your profits and therefore your cash? This does not mean what services you perform the most. Some towers tow motor clubs more than any other customer and they are not making a good profit, and in some cases are losing money, yet they continue to provide this service. You can make good money with motor clubs if you know how to do it. You must develop daily, monthly and yearly accounting forecasts. Ensure your data is timely and available in real time so you can respond to changes quickly. Charting your data is one of the seven quality tools. Chart your data to look for trends and then take action on those trends.
2. Price your products and services.
Pricing is not easy. Books are written on how to price products, but there are some simple rules of thumb. Raise prices on high quality services and lower prices on your lower quality services. The idea is to focus on customer value not your cost of service. When I hold seminars I would tell the audience that I could come into their area and raise my prices by 10% over their price and win all the contracts. Remember, we are in a service business and the quality of service will dictate the price of that service. If your service is high quality, then say it with your price. Don’t be afraid to raise your prices on those services that your customers really like and lower prices on the services they don’t like. If you are not sure what your customers value, then ask them and they will tell you.
3. Hire the “right” people.
Focus your employee hiring process on hiring great attitudes not personalities. Great people are performers that demonstrate results. Don’t be afraid to hire people smarter than you; as a matter of fact, I recommend it. Look past skills on a resume and look for great accomplishments. Remember, good is the enemy of great, so hire great people not people that are good enough. I remember when I hired my first sales person. He demanded a lot of money, and I was a startup company. I hired him and, once I realized what his functions were, he was the most valued employee in the company.
4. Fire the “wrong” people.
If you have made a mistake, then don’t be afraid to fire someone that is not working out. Know your people. I took my managers and evaluated every employee I had. It was a great learning process for me because we identified employees that I thought were average and we determined they were good, and we identified employees I thought were good and it turned out they were bad for the company. I immediately fired the people that were hurting the company. If it’s not working out, you will know it in the first 90 days, so end it now. Don’t wait for improvement in your finances or their attitudes. Firing should be done sooner rather than later. Nobody likes to fire people, but your business is more important.
5. Develop standards.
The services you provide have requirements and so does your business. Define what “great” is for every job that is critical to your business. Start with each service you provide and create policies and procedures for each job and use them. Look at your competition and benchmark what and how they provide their services. Then, set a higher standard for yourself.
6. Implement controls.
Controls start with clearly defined objectives for every job or process that link back to your accounting system and the forecast. Good controls will tell you when things are going bad and what area needs to be addressed. Take time to understand what can go wrong and work to prevent it from happening. Develop warning flags to indicate when things are going wrong.
7. Focus.
I once was in a meeting with Ross Perot, the owner of the largest computer service company in the world. He told me to pick one thing and be the best at it than anyone else. My wife and I focused on being the biggest private property company in the U.S. When I sold my company, I was second to none. A working management strategy requires focus. Focus on the one thing that will make you great. Budget your resources to grow your best opportunities while eliminating the poor performers. Basically, get everything out of the way so all you have are good opportunities.
8. Improve your sales process.
Sales is a contact sport, so make sure you are getting out in front of your customers often. Teach every employee to be a sales person. Your dispatchers and your drivers talk to your customers every day. Teach them to sell. Build relationships with customers so they continue to use your services. If your revenues are not growing, then you are not selling.
9. Understand your marketplace.
The marketplace is not static, so expect it to change. Understand what’s changing in your marketplace and either change with it or be changed by it. As your market changes, it may allow you to add new services or delete services you no longer need. Pay attention to what your marketplace needs and give it to them before your competition does. Your goal is to offer your customer solutions to their problems. Anytime you have a solution to a problem, you’ll have a new customer.
10. Build a strong brand.
Your brand will identify your business. A failing brand leads to a failing business. Your marketing, vision and strategy are key elements of building a strong brand. If you don’t have a marketing vision or an idea of what you want your company to look like, it will be hard to implement the nine other points. Once you have established a vision for your company, it will be easy to set a brand for your company and maintain it. It will also make the nine other points easy to implement. Don’t let your brand suffer or else your business will suffer, too.
These are 10 important keys to your business, and none of them requires a tow truck. When implemented, this list will allow you to be in control of your business and grow your company. I know you are thinking these are things I am not good at. If that’s the case, we can help. 2014 will offer new challenges, and you will have to go to outside resources for help. That’s a good thing; there are plenty of experts in these areas that you can use and actually make them part of your company.
See our ad in this magazine, give us a call, and we’ll help you implement these 10 steps.
Visit www.danmessina.com for more information.
