I am going to tell you a story this month, a true story about one of my clients. Normally I am very careful when I talk about clients, although I do use client examples often when coaching, but not complete stories and never names.
But these guys are special, and are an example of what to do and what not to do. They are not involved in construction which, luckily, means they won’t even know I have used them — but they are a trades-based company.
Their history is a long one — the company has been established for 30 years, and it’s always been located in a small town of 6000 with a surrounding catchment area of around another 5000.
The current owners bought the business 12 years ago. He is the tradesman, and she runs the administrative side. They have a staff of 13, and for the past six months have had record turnover. But it has not always been this way, and I want to outline how they got to this point, and whether they could they have got there sooner.
Seven years ago I got a call from their accountant asking me to see them (this, in itself, is strange as accountants think they are business coaches, but don’t get me started on that topic).
The business had slowed down due to the recession starting to bite, creditors were creeping up and so were the stress levels. So Thunderbird One lands (in the shape of a rather dated Jaguar — and driver, come to think of it!) and the rescue mission starts.
We went through all the standard stuff — cutting all unnecessary expenses, looking for new income streams and communicating with creditors to keep the business rolling and clearing old debt. Piece of cake.
Could or should their accountant have done this? Some of it maybe, but certainly not all, and I take my hat off to the foresight of their accountant for passing on the referral.
Now, I say piece of cake rather flippantly, as it was a struggle for nearly four years. There were highs and some low lows, but it is all paying off now.
So, what did they do right? They asked for help, they were willing to listen, they made changes, they were open to new ways, they stuck at it and they took criticism.
What could have been done better? A quicker response time to the changes, taking the easy road with staff rather than the necessary action, hiding from creditors (sometimes), and trying to lay blame for the situation rather than letting it go.
This list could go on, but they are all normal human emotions — and we can’t really blame them for being human.
They could have got to the point they are at now much sooner, but for some people, big changes are scary. An example of this is how they buy their materials.
They dealt with more than 50 suppliers three years ago, and for 14 months I tried to get them to join a buying group. This group offered small discounts and a very nice rewards programme.
Why the procrastination? Because they had to pay the bill by the 30th of every month or no parts, whereas with 50 invoices they could be creative about who to pay and when.
Within six months of joining, their creditors report had dropped to current (mostly) and their first rewards payment was more than $15,000. The biggest plus was that there was no stoppage of parts from slow payments, so more work got done — hence an increase in revenue.
Sounds oh so simple — on paper, yes, but it took a bit of financial juggling to make it work. For me, it was just another small step to better things. For them, it was a monumental step into the unknown and away from the norm.
So why am I telling this story, and why is this client special? They are like 90% of the clients I see — they’re great tradespeople with a good business but who are sceptical about change.
Why so special? Because with a bit of push, shove and heaps of encouragement they have aimed at the moon and reached the stars. They’ve doubled their income with a staff increase of only 20%, lowered their expenses by 27% and have a profit margin averaging 31% every month. Wow!
And this could be you — all you have to do is ask and be prepared for the ride.