It can be a real wake-up call to sit down and take stock of just how much a company issue, such as frequent callbacks or high employee turnover, is really costing you. Seeing what you’re losing — and how much you have to gain — can be both informational and motivational.
Mike's plan helps owners Identify specific dollar figures tied to problems and weighs the related costs and benefits.
That’s why a central theme of my 60-minute business plan is identification of specific dollar figures tied to problems your company faces and weighing the related costs and benefits. Test groups doing this exercise have produced results like this:
- Current costs: If the company issue remains unresolved, costs can include time and money for repairs, low employee performance, poor employee satisfaction and retention, poor customer satisfaction and retention, low company growth, and stagnant cash flow.
- Potential benefits: If the company issue is resolved, however, benefits can include improved employee performance, employee empowerment and delegation, fewer discounts in the field, new customers, increased revenue, and employee bonuses.
Here’s what our test groups discovered their dollars would do when their business issues were resolved:
- Service department improves first-time complete rates by 10 percent. Result: Increase of $96,000 of revenue per technician.
- Comfort Advisors improve closing rates from 30 percent to 40 percent, which brings in an additional $278,000 of revenue per Comfort Advisor.
- Improved operations accountability reduces SG&A by $375,000 over five years.
- Total improvements amount to more than 1 million dollars.
In the end, what do you do with these numbers? Use them to educate and, most importantly, to motivate your organization. Take stock of the financial effects of your company’s issues, then make a plan to resolve the issues.
Run some calculations of your own to see how much a company issue is really costing you.