OPERATIONS: Improve Profits

All companies must improve operations from year to year. This requires a focus on running your business in the most efficient, ethical and employee-friendly way possible. Improvements boost a company's bottom line, which is a win for both the company owners and the employees. This is a good time of the year to review a few key areas that will assist in producing the desired profits.

LABOR HOURS. In my opinion, companies that prioritize labor hours as a top concern will be successful. Without this focus you're asking for some unpleasant surprises when the financials arrive on your desk. Keep labor hours in line all year by:

• Providing each foreman with the budgeted labor hours for every job, whether it is for maintenance, installation, enhancements or remedial work. This is essential.
• Offering feedback to foreman at least once a week regarding the status of their budgeted hour. These regular reports let the crew know how they're doing relative to the detail most important to determining profit.
• Recognizing crews that produce the best labor efficiency. This may be a monthly reward for each crewmember, such as a gift certificate or cash, but recognition alone is powerful.

The bottom line is that all labor hours must be tracked on every job. Accomplishing this requires an accurate estimating system for all the work you produce, as well as systems to accurately track hour using time sheets. And, most importantly, you'll need office staff that will systematically collect and report all of this on a timely basis. Your office staff should focus on these labor-monitoring systems first, making the production of payroll checks a second priority. Consider farming out payroll services as it is inexpensive and leaves your office staff with time for more important projects.

QUALITY. You can't survive in business very long without providing clients with the highest quality. You can "talk the talk," but unless you have a system in place to ensure your crews are "walking the walk," you might receive a surprise from a client who cancels their contract or refuses to make the final payment.

As the owner or operations manager, a better way to stay on top of your company's quality standards is for you, yourself, to visit projects on a regular basis. At many companies I work with, I see owners captured in the office by duties that are less important than checking the quality of work in the field. I recommend setting aside as much as one full day each week, depending on the size of your organization, to visit sites and judge crews' work quality.

Taking this take to another level, try developing a system that will enable you to "score" jobs and identify areas of deficiency vs. high quality. Job scores are yet another piece of information that can be posted to keep crews informed of the work they're doing and also provide another opportunity for rewards and recognition. To do this successfully, you must commit to visiting sites regularly. If you begin this type of system and then decide you don't have time to follow through, you'll quickly find that the focus on quality will also wane. Make the commitment and be consistent - your clients will notice.

These labor and quality concepts are probably not new to you, but unless you have the systems in place to instill them in your culture, it's easy to have another year just like the last one. Make a commitment to growing your business each and every year in order to provide the opportunities for your employees. Provide high quality and track labor hours - you can't do that and not make money. Develop the systems, ask for help if you need it and have some fun this year. Here's to your profits.