Management Principles

What is the purpose of your business ?  We certainly can't define this for you, but you should have your specific goals that you wish to accomplish.  Without goals, all businesses fail, and 85 % of new companies fail in the first three years.  You may find it helpful to create a business plan which is a blueprint for how you wish to build your enterprise.  Even if you take over an existing operation, it is now your business, and how well you do depends on how well you work toward your specific interests.  There are excellent books on writing a plan, and you can even buy software that will help you format and prepare a written document detailing your goals and strategies.

You wouldn't build a new house without a blueprint, and you won't be successful with your new business if you operate without a clear design !

Working with employees

In most businesses it is not possible to do all of the work yourself.  You will need employees who share your vision and contribute to the success of your company. Here are some thoughts about employees that may be helpful.

•        Your best employees will always be those who identify with the company as active contributors

•        Employees give their best performance when the stress is lighter.  Programs you provide to help employees, ie. health insurance, paid vacations, company outings all build a less stressful environment

•        Employees work better with good tools.  This applies to the setting in which they work also.  If it is clean, bright and professional it will show in the quality of work

•        Employees contribute more when it is in their best interest.  Incentive programs really do help

•        Employees respond to fairness

•        Employees respond to honest praise.  Remember to thank someone for a particularly hard task goes a long way

•        Have people perform tasks that match their ability level.  Working below ones capability is just as difficult as working above ones skill level.

•        Technology advances and skills will only keep pace through continuing education.

Working with clients

Here are some thoughts about clients.

•        You need to define the type of client you are seeking and reflect that in the manner you run your business.

•        Quality always costs

•        There is no such thing as a discount, only a reduction of services which results in a reduction of fees

•        The key to resolving a customer concern is listening so you truly understand their viewpoint

•        Never be afraid to make a business decision and say NO to a customer

•        A person who won't pay for services is not a customer

•        Competition is not always about price

•        You are a solution provider but you can't resolve the concern if you don't take time to understand it

•        Not all problems can be resolved and not all clients can be satisfied

•        People rarely share their good experiences with a business but can be counted on to vent their frustrations

•        Sometimes clients simply have a bad day !

•        Mistakes can be corrected

•        Comfortable clients are more satisfied when waiting

Controlling Inventory

How about some ideas on inventory control

•        Stocking often used parts will increase profits by cutting your cost

•        Waiting for parts is expensive because often your service area ( bay ) is not producing while a vehicle sits awaiting part delivery

•        Stocking seldom used parts may tie up money in inventory that could be better used elsewhere

•        Parts don't disappear.  They are either placed on workorders, and not billed ( a loss ), or they are removed from the shop by employees ( a loss ).

•        When employees are accountable for missing parts, fewer tend to stray.  ( Some shops give their employees a quarterly profit sharing, but the amount shared is directly reduced by the cost of missing parts.  Employees are not likely to allow their peers to take items that reduce their income )

•        Location codes allow you to find parts quickly.  Not finding a part that is on the shelf may mean buying another one to save time ... and that increases costs.

•        It may be cheaper to pay a restocking fee than to stick a rarely used part on the shelf.

Staffing Ratios

Too few employees means overwork, and a loss of efficiency, which adversely affects employee satisfaction and performance.  It also places stress on the staff, making the workplace a negative setting.  Too many employees usually cuts the amount of work available to each.  Since most employees are on a commission structure, their income is adversely affected by overstaffing.  Balance may be hard to attain, but it is essential that you carefully consider the staffing needs of your business and plan accordingly.

Profitability

Every business wants to be profitable.  However, to many owners, this means taking home a big paycheck from the very beginning.  Most analysts indicate businesses are underfunded.  This means they start with too much debt, fail to reinvest during the early years in growing the enterprise, and do not maintain reserve funds.

The most profitable businesses are the ones that can compete through "thick and thin", or "lean times and abundance."  Be sure to plan for the long term and stick money aside.  Then when your competition is short on funds, you can continue to shine in your operations, and this will show professionalism to your clients.

The most profitable clients are those who return.  Invest in communicating with them, and providing quality service, and your profits will soar.