A trend I’ve seen within the last couple of years as been to measure performance of employees through a series of metrics, which are numerical representation of performance, service, quality, etc. A couple of thoughts have come up as I’ve spoken to a few business partners:
- You will always have a couple of people who want to have high numbers – and while that may appear good on the surface, make sure that they are not sacrificing unmeasured areas to make the measured numbers look good;
- Make sure that you’re using sound statistical calculations – when your numbers don’t appear to correlate to real life, there is a problem – don’t trust the numbers of themselves, make sure they make sense in real life;
- Have a combination of public and confidential metrics. That is, have a series of measurements which are published and discussed. These are areas where team members can strive to achieve and improve. Then hold a second set of metrics you use to measure your own management of these employees. Keep those measurements private. Do not disclose to the employees how you’re measuring in this area. Simply address problems as they occur, but kept your actual measurement system private;
- Your business goals, including customer service and profitable should be measured. Again, keep disclosed and undisclosed numbers.
Also, in the context above, everything is referencing “within the company” — an even smaller set of numbers (if any) should be published to the outside world.
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Are you looking to close your business in 2009? A quick tip: be sure to complete all of your closing paperwork with the various federal, state and local agencies. Penalties can still add up for failure to file, even in there is no dollars or information to file, your returns must be complete. Most forms have a checkbox to mark on your final quarterly/annual filing stating that you’re closing your business.
What are you doing to make your website work for you? Here is a couple of tips I’ve picked up along the way, and we’ve implemented ourselves…
1) Get a website champion – someone who is really living the website, thinking about it in the shower, staying on top of what’s out there and going on. Let them try to become the leading website for your industry.
In preparing your budgets or cost anlysis for providing services, is as an essential to calculate the cost of warranty service. This can come in the form of warranty service due to internal causes (not completing work projected, not performing the job properly, etc) or external causes (a problem with newly installed equipment). These costs exist and need to be calculated as part of your overall overhead. For example, say you sell and install a brand new piece of equipment that you sold to your client. So your capturing both your margin on the hardware, plus the labor of installation – perhaps even advanced consulting/sales services. Now, what happens when the product you receive from the distributor comes in and is broken, or isn’t really the correct item (not compatible with application) — should your client be expected to pay the labor and costs associated with the inital install and then again the reinstallation? Likely not.
We’ve been spending the last week reviewing our client which have outstanding debts from last year. We have let our collection efforts slip, primarily because we have enough capital to keep moving, and understand that not every company does. It’s sort of our laziness, we called grace to our customers. However a quick look back and we see about 5% of last year’s total revenue in uncollected debt.
One thing we utilized in the past which has resulted in excellent success has been to send collection notices by FedEx. There are several reasons for this. First, if you’re sending a collection letter, you’re probably going to send it certified, so you get that included. Second, you’re probably wanting your money soon, and this certainly ensures that you clients will receive the letter sooner. And finally, and perhaps most critical, is that your collection letter will be opened. Nobody ignores a package delivery. The simple fact that it is sent via a priority message will pique their interests and they’ll open it. It will be an unavoidable truth to them.
What have our results been? We’ll we haven’t sent letters out yet – that’s coming next week. But in the past we’ve seen about a 75% rate of return on these collection letters, which is extremely good. There have been several customers we have mentally written off who have ignored prior collection efforts, who shocked us when the remitted payment promptly after receiving our priority mail.
Give it a try next time and comment on your results.
