Every industry seems to go through stages where it is fashionable to hire consultants -- whether they are needed or not. Now it’s the service and repair industry’s turn to see an influx of individuals and companies offering consulting services.
Some offer advice on the fundamentals, others are ready to revamp your entire organization. Some have never worked in the business and others have been in the business for years. Many have formidable marketing efforts to convince you it’s time to get help.
There is nothing inherently wrong with using consultants. What I want you to think about is: 1) What do I need help with in my business?; and 2) How much is it worth to get the help I need?
Rarely does a business need help with everything under the sun, nor can it afford it. I suggest using a little caution before opening up your business to an outside consulting firm. First, it often appears more economical than it later turns out to be to have an initial assessment of your business.
It may seem attractive to “fix” everything that may be wrong with your business for a $2,000-$2,500 fee. But what sometimes occurs is the initial assessment results conclude that you still need the “full package,” lots more consulting that may cost as much as $50,000 or more.
When a contractor is facing reduced revenues and profits, with no positive trend in sight, he will sacrifice his personal assets to do what he believes is necessary to save his business. Some contractors have taken out mortgages on their homes or borrowed heavily to finance the (supposedly) desperately needed consulting.
In fact, what can easily happen from such hasty decisions is a reduced level of cash in the business -- cash that would have helped weather the temporary downturn, instead of wiping out any safety margin.
Let’s review some tips that will assist you in applying your business’ resources to productive contributions.
Your ResponsibilityToo many contractors want to hand the responsibility for their success over to someone else. It’s not that easy. Despite the substantial fees or extravagant promises, you cannot remove yourself from the business.
No matter what shape your business is in, you can’t benefit from any assistance until you have a plan. Part of the plan you’ll need includes examining the systems you have in place and determining which are working and which are not, and at what cost. For example, you need to have a simple but complete system in place to account for all jobs, for cash flow projections and for employee paychecks. The same is true for your inventory control -- even the operation of your trucks.
I am frequently disappointed to see a service and repair organization with top technical talent, providing the best quality service work the community has to offer, and yet they are barely making money because of inefficient back-office systems (or lack of them).
Management is more than sending a technician to the right address. It has to include a thorough understanding of the costs of doing business and the value that the customer perceives he/she is receiving. If those basic elements are missing, no consultant can replace them with an expensive program.
The DetailsGoing beyond your plan, you need to begin to focus on what you need to make the plan work. Instead of techniques from Fortune 500 companies, you need proven practices from companies in the industry. For example, using service agreements, house branding and certainly flat rate pricing are going to be more beneficial to you than a complete revamp of your financial reporting.
In the hundreds of companies that I have worked with over the last decade, I find that only a few have identified the techniques that the industry leaders use to generate more revenues. Besides the companies that have not yet switched to flat rate pricing, there are companies who have not trained their technicians in customer service.
It may surprise you what you pay for in most consulting firms. One of the most expensive aspects of the services provided are for the efforts spent getting you to follow their advice. That’s right, not for the advice itself -- often back-to-the-basics guidelines -- but for insuring that you actually put the suggestions to use.
There is nothing wrong with sound advice on systems and business practices, but how much are you willing to pay for a consulting firm to watch over you to be sure your follow its system?
Using proven approaches that service and repair companies have found valuable seems to be a better investment. Simple (less costly) solutions will most likely be a better investment for you. Let me be specific about the kinds of services that you should be willing to pay for:
- Professional Services -- The professional services that can help you make a difference in your business are often directly related to the firm’s knowledge of the business. For instance, how does a firm that has not been in the business know how to find and keep the right people?
- Training -- Other services you may need help with would include producing in-house training programs for everyone who has contact with a customer -- whether by phone or in person. Do consultants train dispatchers? Probably not. Yet, they often need tips to do their jobs more efficiently.
- Fleet Management -- Selecting the right truck, the layout in the truck and integrating that with the layout in the warehouse are other illustrations of techniques developed directly from years of experience in the business.
- Marketing -- Professionally marketing your company (creating value in customers’ eyes) also requires familiarity with the service and repair business.
Integrating all these “hands-on” techniques are what makes the difference in pointing most contractors in the right direction. And they are best delivered and implemented by people in the industry.
How Much Should You Pay?Despite the approach the big firms may use in getting in the door with a token fee then selling the larger group of services, it seems there are available services from training to comprehensive analyses of service businesses that don’t cost more than about $15,000 -- for everything. If you are committing to huge sums of money, regardless of what you are told the benefits might be, examine closely what you really need, and what you can afford.
You are welcome to see the services that we offer at maiosuccess.com to help you determine what you may need.
Ultimately, the decision to improve the profits in your business cannot be left to someone else. You need to step up and take a good look at your business. Modern techniques used by those in the service and repair business do work. And they can work for you. See what you really need before committing precious resources to consulting firms.