December 21, 2014

Business Tip – August 2014

What you can learn from my summer vacation

mapei_sponsor
By Wally Adamchik, president, 
FireStarter Speaking and Consulting

Remember the standard, return-to-school “What I Did on My Summer Vacation,” essay from our youth?

wally_adamchikThis summer has given me several lessons that have value for you today.

The story begins with a local police officer knocking on my door at 9:00 one night, asking me about my brother, Billy. Of course, you know what happens next – I find out that Billy died in a motorcycle accident a few hours earlier. He was 57, divorced, with no children. He was a floor layer. Just like you and your team.

First lesson: We are in a business of relationships. Don’t let corporate purchasing and hard-bid tactics make you forget this. While price is part of the purchase consideration, the quality of your work and the relationships you foster with your clients, customers, and co-workers are paramount.

I first realized this as word about Billy spread through the grapevine and I received numerous calls, emails, and cards of condolences from across the country. These were unexpected and much appreciated.

I saw it again at his wake. Having worked his trade in the New York area for over 30 years, my brother was well known. On that Memorial Day weekend, we were visited by many of his associates. Not just tile guys, but the foreman from the laborers, and a superintendent from a general contractor, to name a few. There were guys who had worked with our father in the business – and some even remembered when I had helped out on a few jobs, way back when! Connections between people – that’s what it’s about.

Next lesson: How is your health? Construction is hard work, yeah. But it isn’t a substitute for quality exercise and eating. Billy wasn’t in bad shape, but he wasn’t in good shape, either. He loved to eat; cooking was his hobby. He didn’t exercise. And he had coronary artery disease. In fact, he may have had a health crisis that triggered the crash. We don’t know for sure. But we do know that he was not taking care of himself, and now, he’s gone. Are you taking care of yourself? (If not for yourself, then for those who love you.)

Last lesson: Get your affairs in order. “Divorced with no kids” sounds like an easy estate to deal with, right? Well, it would be if:

  1. There had been a will (there wasn’t);
  2. There had been up-to-date beneficiaries on his life insurance policy (his ex-wife is still listed, although that wasn’t his wish; he just “never got around to” changing beneficiaries even though they’d been divorced for several years), and
  3. All his records had been kept in one place (not even close).

Looking through files and folders is never easy, but having to weed through pay stubs from 1986 makes the process even harder.

I realized that my finances and directives are in a similar state of disorganization. I am currently creating what I call the Red Envelope, where all of that information is being placed to make the process easier for whoever needs to deal with it. We need to do this for the benefit of those around us. If you are a business owner or the head of a household, this becomes even more important.

By now, you may be fed up with my personal ramblings. But remember what my brother did for a living. He was a floor layer. He was just like you and those who work for you. I am hoping you can learn from him so your team is better off.

Business Tip – July 2014

mapei_sponsorThree common business screw ups

GoldmanBy Jon Goldman, CEO Brand Launcher

From TV’s Bloopers and Practical Jokes to America’s Funniest Videos, everybody seems to enjoy laughing at people’s screw ups. And at baseball games, all eyes are glued to the giant screens to watch the funny mistakes the players make. But it isn’t so funny when it happens in our businesses, where the mistakes are both embarrassing and costly. But many of tomorrow’s mistakes have been made before. You can learn from the past and avoid making these Big Three business mistakes.

1. No sense of urgency

I grew up sending letters in the mail and waiting a week for a response. But Gen Y grew up with instant chat and texting. They get annoyed sitting in an airplane going 500 mph, and their broadband connection is too slow. This means the bar has been raised for all of us, and you and your team had better respond to prospects fast.

I know of one business that lost $120,000 worth of revenue because it made a potential customer wait a few weeks to get a price quote. In today’s environment, if you don’t respond quickly, other companies will eat you for lunch.

2. Lack of transparency

Do you hold your cards too close to the vest? One business owner I know was so reticent about sharing information that he lost the trust of his key personnel. We’re living in a transparent world, and by holding back, you create a veil of secrecy. This works well at magic shows, but not in the business world.

I want to share a radical idea with you. It’s called “Open-Book Management.”

“What? Open up our financials so our employees can see how much we’re making? If they see how much profit we make, they’ll demand more money.”

I have yet to find a company that was harmed by taking the bold move to open up their books. No, you don’t have to divulge everything, but you should let your key players in on your overall financial situation and your vision for the company. You want them to feel a sense of ownership within your business.

3. Hiring too quickly

Growing companies need to hire new personnel. But often they choose the easiest people to find, rather than the best people for the job. Ultimately, they have to fire them or they remain stuck with staff who doesn’t get the job done.

Sure, you want to build quickly. Perhaps you feel you can’t afford to hire the best people. But you can’t afford not to. If you hire wrong, you’ll end up spending time and money training, only to have to hire and train again.

Screw-ups: we all make them

In some of the businesses that I have owned, we made these mistakes. I wish I had learned from someone else’s mistakes then, so I didn’t have to spend much time straightening them out. Now when someone tells me about having a sense of urgency, being transparent, or hiring the right people, I pay attention. I hope you will, too.

Jon is the author of two works on business and marketing topics, including one that has been translated into Japanese. He is a powerful speaker who was a popular presenter at the 2014 Coverings show in April. Get a FREE copy of his latest e-book, Vendor-to-Expert, at www.VendortoExpert.com.

Business Tip – June 2014

mapei_sponsorThe daily huddle

One of the most effective leadership and management tools at your disposal

wally_adamchik By Wally Adamchik, president FireStarter Speaking and Consulting

It works for (insert your favorite quarterback here) and it can work for you, too. It is, perhaps, one of the most effective leadership and management tools at your disposal, and takes just a few minutes to execute. But it is rarely used effectively. What is it? A daily huddle.

You need to tell your people things they need to know to do their job. They want to hear those things. Contrary to popular belief, there are employees at all levels and all ages who want to do a good job. Many of those who are disengaged feel that way because the boss is not communicating with them. The daily huddle is a fine solution. And it can work in any industry. It works especially well in construction.

The concept is simple. Before the workday starts, you gather your team to deliver key information to align them for the day. Are there any special events/visitors/promotions? How about a key training or safety tip? On the jobsite you should talk about production targets for the day. All this information gives your team direction and helps them to be more productive. You also might toss in some feedback about how things went yesterday. (While this is not a time to single out poor performers, you may highlight some wins from the day before.)

Make sure to ask for input and questions. If the huddle is a new concept for your team, people will be reluctant to share anything initially. But, over time they will see you are serious about the huddle and will work with you to make it better. I have seen – and participated in – huddles that were also a stretch-and-flex period to increase safety awareness and to warm up cool muscles before starting physical labor. It sends a strong message that the company is serious about safety when the boss joins in the huddle and the flex when he is visiting. I have also seen CEOs blow off that part – and that sends a message, too!

Communication is one of the keys to success in just about any endeavor. I have never conducted an employee satisfaction survey for a client in which the results indicated there was too much communication. In fact, over 85% of my surveys have indicated that communication from management is in need of drastic improvement. The huddle is a quick, easy and inexpensive way to fix a major problem.

Let’s look at why it works. First, it is personal. No texting or email is involved. This is direct, eye-to-eye contact – still the most compelling form of communication we have. When we look someone in the eye we know we have their attention and we can see them understand our message.

Also, engaging in eye contact shows people they are important, that you want to communicate with them. It conveys the message that you trust them enough to share this information with them. When you ask for their input, you are literally saying, “I want to hear what you have to say. I am interested in you and the value you contribute to our team.”

It comes down to trust and respect. And it educates and aligns people on key business issues. They feel like they are part of the team and they operate from a “we,” not a “they,” perspective. When I interview an employee who speaks of his or her firm in terms of “they do… they say,” it makes me cringe. It is as if the employee does not actually consider himself part of the company, but rather some visitor who has little stake and even less affiliation and sense of camaraderie.

Keeping people informed is your job. Setting direction is one of the primary roles of a leader. In the case of the huddle, the direction is short term. We are not communicating the strategic plan of the company; we’re merely stating the goals of the day.

What’s the payoff? You get employees who are more motivated and educated to do the job. Does it always work? No, not every single employee may respond to the huddle – but most will. I can guarantee though that starting the day without a huddle ensures a workforce that is uninformed and de-motivated. And not even the worst quarterback in the league would attempt that.

NTCA has partnered with Wally Adamchik to bring his interactive virtual training system at www.firestartervt.com to NTCA members. Contact him at wally@beafirestarter.com to learn more about how the NTCA/FireStarterVT partnership can shave your training dollars while improving your leaders at all levels.

Business Tip – May 2014

SponsoredbyMAPEINever drop your prices again!

How to stop selling on price

wayshakBy Marc Wayshak

I was recently at Lord & Taylor with a close friend of mine when she held up two pairs of high-heeled shoes. Both pairs were black, appeared similar and looked pretty to me. “What do you think each pair of shoes costs?” she asked.

“Well, this is a nice place, so I’m guessing that they both cost about $150,” I replied.

She smiled at me as if she were watching a puppy hopelessly barking at the moon. “Actually, this pair,” she said, holding up the shoes in her left hand, “costs $110.”

“I was close!” I said defensively.

But then she continued. “Now this pair,” she said, holding up the shoes in her right hand, “costs $650.”

“What?!?!? But they look so similar!” I exclaimed in surprise.

Upon further reflection, I began to see the parallels that women’s shoes have with selling on price versus value: Products or services that are fundamentally the same can sell for drastically different prices. It all depends on the way they’re sold.

Let me introduce you to two salespeople: Don and Liz. Both have been selling bathroom accessories for 20 years. However, they each sell in a completely different way.

Don is all about price. He’ll walk into a prospect’s office and say, “I see that you’re working with Grohe, and I can show you how you can save 50% by working with me instead…”

Liz, on the other hand, is all about selling on value. She’ll walk into a prospect’s office and begin a conversation by saying, “I really appreciate your inviting me in today. I want to tell you up front that if you are looking for the lowest prices, I’m not your gal. My goal is to help my clients create a bathroom that ‘wows’ visitors. Does it make sense for us to continue talking?”

Both approaches lead to sales, but the difference in the average transaction size and profitability is night and day. Liz wins, and she wins big.

If you’re determined to sell on price like Don, then you should stop reading this now. However, if you’re open to selling on value like Liz, then stay with me…

Here are four ways to stop selling on price:

1. Stop being a vendor: Don is a vendor to his customers, while Liz is a strategic partner to her clients. Get away from just being another vendor offering the best price. Instead, focus on how you can help provide massive value to your clients. The prospects that just want the best price are not who you want to work with. At least 60% of prospects want something more than just the best price. Target those folks.

2. Be distinct: Both of the shoes my friend showed me appeared to be similar, but one had a very distinct brand, while the other was essentially no-named. You don’t need advertising to be distinct – your approach to selling can be what makes you stand out. While Don’s approach was pretty cheesy and predictable, Liz was bold and totally distinct from what the prospect typically experiences. Immediately, the prospect is intrigued to understand more about why Liz isn’t the cheapest. Everyone knows that they get what they pay for, so let them experience the best.

3. Create value in your conversation: Every qualified prospect has challenges that you can solve. For example, in the case of Liz, her qualified prospect might be a developer that has used cheap bathroom accessories in the past only to find that they frequently break and need to be replaced after only a year. By learning about the prospect’s experience and how much that cost him in lost revenues, Liz is creating tremendous value for her products – before she ever shows him her product line.

4. Pile it on: Good prospects are willing to pay more when they believe they are getting tremendous value. This means that, in order to create that value, you must think in terms of selling solutions and packages. For example, Liz not only sells bathroom accessories, but she also offers custom design and assistance with actually installing the accessories in order to ensure that they last for many years. This perceived added value allows her to charge a higher price than Don could ever imagine charging. How can you add additional products or services to your offering to increase the perceived value of your product or service?

Selling on price is never the only option for a company. By following these four steps and thinking creatively about how to increase your value in the eyes of the client, your sale size will increase dramatically.

Marc Wayshak (www.marcwayshak.com/) is a sales strategist who created the Game Plan Selling System. He is the author of two books on sales and leadership including his latest book, Game Plan Selling (http://amzn.to/15MdhA9) and a regular online contributor to Entrepreneur Magazine and the Huffington Post Business section. Get his free eBook on 25 Tips to Crush Your Sales Goal at http://gameplanselling.com/. (Twitter: @MarcWayshak)

Business Tip – April 2014

SponsoredbyMAPEIPerfection desired, not required

How you handle mistakes affects your customer’s perception of your service quality

wally_adamchikBy Wally Adamchick, Firestarter, president, FireStarter Speaking and Consulting

The other day, I facilitated a panel discussion on customer service. The audience was a group of operations managers and field supervisors, and the panel included three of their actual customers. So, these audience members served these customers.

Over the years I have been involved in a number of sessions like this, and the results are always very positive. Not necessarily positive in that the customer says everything is great, but positive in that both sides come out of it with a higher level of mutual understanding and an increased respect for each other. There is something about these panels that creates candor. And that’s important, because at no other time do we ever really ask customers what they think, and if we do, they never fully tell us what is on their mind.

When a customer makes a purchase of just about anything, they are entitled to a reasonable expectation that the product or service will be delivered correctly and in accordance with a given set of specifications. In fact, that is why they have selected you. The buyer believes you will complete the job – as purchased, on time and on budget. If you fail to deliver, you lose their business. But over time, you probably do a consistently good job, so you now have a repeat client. This is something any business should strive for. If the customer is not in a position to buy again, then certainly they are in a position to refer you to someone who is in the market for your service.

At some point, something is going to go wrong. An order could be late, an installation might be of poor quality, or one of your employees might be rude to the customer. There are plenty of ways we can disappoint clients, especially if we have done the right thing for an extended period of time. But here it is – that moment of truth when you have to fix the mistake. This was one of the key conversations in the above-mentioned panel discussion: your customers expect nothing to go wrong. They really are looking for perfection; they want it right the first time. However, they also know that mistakes happen, and so it is how you recover from a mistake that defines their perception of you.

In the restaurant business, this is called service recovery; in the airlines, it is called irregular ops. In both cases, we are talking about a situation where something has gone wrong. In restaurants, the customer’s perception of the quality of service is actually higher in a situation where something went wrong and was then fixed quickly and correctly, rather than the situation where everything went flawlessly!

At the airport, when my flight gets cancelled, it is very reassuring to get a call from my airline telling me I have already been rebooked. They have just saved me the trouble of having to wait in line to negotiate for another flight, and the stress that goes with that.

Your people are trained to deliver the specified level of perfection. If they weren’t, they would not be working for you. Ideally, they would be trained in how to handle a situation where the customer is not happy. Unfortunately, this is often not the case. Usually, a manager needs to get involved to resolve a sticky situation made worse by an employee who handled it poorly. Now you have a doubly ticked-off customer. It all comes back to training:

Are your employees taught how to do the job correctly in a variety of settings – not just in the isolated environment of a training room?

Do your employees understand your philosophy as it relates to quality and service?

Do you regularly communicate this philosophy?

If you answered “No” to any of those questions, you are placing your company at risk of a bad client experience that was then resolved poorly. Remember that old statistic about how an unhappy customer would tell nine other people about the poor service they received? Well, with the internet being ever-present today, “nine” can easily become 9,000 – or more. In fact, if the message goes viral on social media, millions of people will read it within days. And that’s not the kind of publicity you want for your business.

Whenever a business faces risk, it usually refers to the potential for lost profit. The customer-employee interaction is a point of risk. Rather than saving money by cutting corners on training and education, you might be better served by investing money to create the skills and mindsets in employees to prevent and correct negative customer situations in the first place. Technical skills are a start, but they are not enough. What you do is important. How well you do it – and fix any mistakes – is equally as important.

NTCA has partnered with Wally Adamchik to bring his interactive virtual training system at www.firestartervt.com to NTCA members. Contact him at wally@beafirestarter.com to learn more about how the NTCA/FirestarterVT partnership can save you training dollars while improving your leaders at all levels.

Business Tip – March 2014

SponsoredbyMAPEIGetting your employees to commit to customer service

By Bill Sims, Jr., president
The Bill Sims Company, Inc.

SimsIt’s a business no-brainer that happy employees make happy customers. But how do you get happy employees that deliver the best possible customer service?

It requires employees to move beyond simple compliance of workplace rules and becoming truly committed to the jobs they do. And moving people to commitment requires positive reinforcement in the leadership system.

Employee engagement has been identified by as a key driver of your company’s profitability and human performance. Sadly, only 15 percent of employees say they are “actively engaged” at work.

So, how precisely do you shift your workplace culture from “I have to do it or I’ll be in trouble” to “I want to do it because I believe in it”? And how do you get more positive reinforcement in your management system?

If you are a leader, your success in business will depend on your ability to deliver positive reinforcement, something that is rarely used by today’s managers and leaders. And, let’s be clear: we’re not talking about steak dinners and handing out gift cards and t-shirts for lagging indicators.

That’s not an example of positive reinforcement. In fact, those types of “one size fits all” reinforcement actually erode commitment and encourage non-compliance. In short, they breed mediocrity.

When we reward everyone the same, regardless of their level of effort, we are introducing a system that says it doesn’t matter how hard we all work, we’re all going to get the same thing.

Positive reinforcement: individualized and timely

True positive reinforcement needs to be individualized and delivered immediately after an employee does something right. That way, the employee will be more likely to repeat those behaviors in the future. If an employee demonstrates stellar customer service work, or goes above and beyond to make a guest or client happy, they should be recognized for that. Yes, they are doing their job and that’s what they’re paid to do, but studies show that a paycheck is not as big a motivator as feeling like you are making a difference at work.

Bosses who think they don’t need to tell their employees they are doing a good job are not fully engaging them.

When it comes to engagement, every company has just three kinds of workers: Non-Compliant, Compliant, and Committed. Here’s what each looks like:

Non-Compliant: “I will not follow your rules because I am convinced the only way to get high production is to take risks and shortcuts.”

Compliant: “I will follow your rules as long as someone (a manager, a supervisor, or a peer observer) is standing there watching me. But when that person leaves, I’ll take more risks and shortcuts.”

Committed: “I will follow the rules, when nobody is watching. This is who I am…”

That ultimate level of employee engagement is commitment. And yet, not many employees are truly committed to the job. Why? Because the management method most bosses use is the classic “Leave Alone/Zap.”

“Leave Alone/Zap” technique of management

Simply put, it means that we leave employees alone and say nothing when they do something right (giving no positive feedback), but we are quick to “zap” (punish and negatively reinforce them) when they make a mistake. The problem with “Leave Alone/Zap” management is that it doesn’t get you to the highest level of performance, engagement and commitment. It only gets you a temporary change in behavior which lasts as long as it takes you and your big stick to leave the room.

Without positive reinforcement, you are getting less performance from your team than you could be and your workplace culture will suffer. But if you use positive reinforcement to cultivate engaged, committed employees, all aspects of their work, including customer service, will improve.

––––––––––

Bill Sims, Jr. is president of The Bill Sims Company, Inc. For nearly 30 years, Sims has created behavior-based recognition programs that have helped large and small firms to deliver positive reinforcement to inspire better performance from employees and increase bottom line profits. A sought-after speaker, he has delivered leadership workshops and keynote speeches around the globe, and has built more than 1,000 positive reinforcement systems at firms including DuPont, Siemens VDO, Coca-Cola, and Disney.

Websites: www.greenbeanbook.com; www.greenbeanleadership.com.

green_bean_bookGreen Beans & Ice Cream: The Remarkable Power of Positive Reinforcement can be purchased from www.amazon.com, www.barnesandnoble.com and through all major booksellers.

Business Tip – February 2014

 

mapei_sponsorLeadership and Management:
working together for your good

By Wally Adamchik, president, FireStarter Speaking and Consulting

wally_adamchikYou remember the commercial, “Tastes great, less filling?” The one about the beer that tasted great and didn’t fill you up – combining two fine qualities into one beer.

In your business, you also need to demonstrate multiple abilities. Whether you are just getting started or have been in business for decades, to be successful in business today, a combination of both leadership and management skills is required.

That sounds easy, but there is one problem: leadership and management are two separate skills. I once had a speaker before me at a convention assert that they are arch enemies. I took the stage after him and totally disagreed. I contend that they are intimate allies.

To understand the difference, we first need to change them. Leadership is about change for better results; it challenges the status quo and looks at the long term. It is about people. Management is about consistency for better results; it maintains the status quo, focusing on short-term results; it maintains the status quo, focusing on short-term results. It is about structures and procedures. Leadership and management seem to contradict each other but they don’t.

Skills can be learned

Usually, when we think of leaders, we consider larger-than-life historical figures and we don’t include ourselves. Give yourself some credit. You can lead too. Take a look at the things leaders do. Ultimately, these things revolve around “soft skills.” These intangibles do not come naturally to many people in construction. It is not how you are wired. The critical few things that leaders do are set direction, align resources, and motivate and inspire people. These are skills that can be learned.

Management, on the other hand, is about “hard skills.” Management focuses on the business of the business, the black and white, not the gray. It involves planning and budgeting, organizing and staffing, and controlling and measuring. There are far more managers than leaders. Even though these skills are essential to the success of any business, they are not instinctive either.

One of the best tools at your disposal for leading and managing in the field is the daily huddle. Done well, this short but important investment of time insures high production for the day. Done poorly, it is a waste of time that simply puts the crew farther behind. Ideally, the huddle is a conversation about production targets and techniques, safety issues and overall opportunities for improvement from the day before. The huddle sets the direction for the day, gets the crew working together and gives a goal to shoot for.

Research shows, and experience confirms, that the higher you go in the organization the more you must lead. In fact, depending on the size of the firm you might be leading 50% of the time if you are the president. Very large firms will see that number move to 80%. Conversely, at the crew level we expect to see 80% management and 20% leadership. The sad fact is that we don’t see much leading at the crew level. We see orders being given and plenty of controlling and problem-solving but precious little motivating and aligning.

Rather than being mutually exclusive, these two skills are, in fact, interdependent. The successful tile business person of the future must respond to the new reality. The labor situation is not getting any better. Just because you were good once doesn’t mean you will continue to be successful today. Customers are more demanding, there is no labor waiting on the bench, and margins are thin. However, the person who can blend the seemingly contradictory skills of management and leadership is poised to bring their company into a more competitive and profitable position.

NTCA has partnered with Wally Adamchik to bring his interactive virtual training system at www.firestartervt.com to NTCA members. Contact him at wally@beafirestarter.com to learn more about how the NTCA/FirestarterVT partnership can save you training dollars while improving your leaders at all levels.

Business Tip – January 2014

Financial Operations

mapei_sponsorIn this issue of TileLetter, we continue with the Financial Operations section of the NTCA Business Reference Manual, as found on page 31 of this document. In the November 2013 issue of TileLetter, we examined overhead analysis, accounts payable and receivable and invoicing. We continue now with a look at contracts, depreciation and job costing. Check upcoming TileLetter issues for more tips and recommendations on running your business efficiently and profitably. To download the entire NTCA Business Reference Manual, visit www.tile-assn.com.

f. Contracts

It is important to have a contract for any work provided by your company. This is for your protection and your clients. A contract clearly spells out what services you are going to provide, where and how much. This document can be as short as one page to many pages. It needs to be worded very carefully. You can see what other contractors are using and adopt a similar document. Make sure an attorney reviews it.

Good contracts also have well-defined pay schedules on them. This takes all the guessing out of when you will be paid and how much. You should also include a “Notice of Right to Cancel” form ( commonly called Right of Rescission) with your contract. Each state is different, so check out what your state requires. A state form must be provided in addition to a federal one.

BT_0114_graphicChange orders should be developed and given to the client as the change is taking place. Clients will pay you more easily and faster when they know there is a legitimate change to their job and scope of work. You cannot wait till the end of the job to provide this! Too much information is forgotten and the urgency from the client to pay you is lost. Take care of each change as it occurs.  It will only help your cash flow.

g. Depreciation

When you depreciate, you allocate the cost of an asset over the useful life of the item. Large ticket items are often depreciated over several years.

h. Job costing 

Job costing is a comparison of what you charged for a job versus what it cost to get the job done – labor cost, material cost, overhead. When evaluated over several months, your job costing reports can give you a good indication of what types of jobs are most profitable for your company. “Work in Progress” reports use similar information to give you an indication of the job’s profitability as the work proceeds.

NTCA reaches new milestones in 2013

By Bart Bettiga, NTCA executive directormapei_sponsor

I am sure all of us have experienced the challenges and strains that our economy has put on our individual companies, but I am pleased to report that the National Tile Contractors Association (NTCA) continues to thrive and expand its influence every year as a leading association in the tile industry.

In August, the NTCA Executive Committee traveled to Grand Rapids, Mich., for three days of strategic-planning discussions. This resulted in what we think is a great direction for the association mov- ing into 2014 and beyond. The NTCA Board of Directors then met at Total Solutions Plus in October, expanding the program direction generated by the Executive Committee, resulting in a clear vision for the staff moving forward.

The cash position of the NTCA is healthy as we head into 2014. As we develop our following Strategic Plan, we expect the association to continue to grow in influence and to increase its value to our members.

Membership

One of the main contributors to our financial success has been the steady increase in our membership. This year was the fi fth year in a row we have increased our totals – in a year when our member investment increased from $500 to $600. In fact, we have now exceeded our goal of 800 members, established three years ago. We are now focusing on reaching 1,000 members in 2014.

Strategic Planning

For the past several years, the Executive Committee has been involved in the process of strategic planning. When we talk about strategic planning, we try to look into our future longer than just one year. An example of this is thin tile panels, which have exploded onto the tile industry scene and have raised a lot of interest and challenges to our members. We have been involved in discussions on developing standards for these products, and also trying to position our association’s members to benefit from these efforts. This is part of a strategic planning process. Following are our objectives for 2014:

#1 Objective: Saving members money and getting them work

We have identified saving our members money and getting them work as our most important association objective. It is not an easy task. Getting NTCA members specified on projects also includes promoting and further developing our Five Star Contractor Program. Our staff will use their many means of communication to promote Five Star and the advantages of contracting with NTCA members, as well as promoting member benefits that can save you money.

#2 Objective: 1,000 members

By the end of December, we expect our membership to exceed 900 companies. We have a healthy ratio of 85% contractor members, and 15% associate supporters. We are setting the bar high for next year, and our staff is working extremely hard to reach 1,000 members for the first time in our history.

#3 Objective: Tradeshows

NTCA is an owner in Coverings, and also receives income from Total Solutions Plus. Although we want to continue our support of these shows, we don’t want to depend on their profi t for the success of our association. Several years ago, we were concerned about what would happen to NTCA if tradeshow revenue were to disappear. So we have established this goal of evaluating tradeshows, and our staff has worked hard to find alternative sources of revenue that our association can more easily control. We have had excellent success in this effort.

#4 Objective: Board of Directors

Our fourth goal is to focus on getting our members to become more active. By developing our State Director Program, and by actively recruiting more member involvement, our Executive Committee and staff now discuss all of our potential new leaders, and work closely together to recruit these people to our committees, Board of Directors, etc. We think having more people involved in the NTCA will only grow our association and expand our influence in the industry.

Training programs

At the Executive Committee meeting, we identified that key staff direction would be to focus on training for our members. I am pleased to report that the NTCA Workshop Program is being revised to provide more technical training to our members and their installers, and we are also ready now to offer on-line business training as a member benefit. To do this, the NTCA is partnering with Wally Adamchik, of Firestarter Training and Speaking. Wally is a well- known business trainer and speaker and has a proven track record of success. We will report more on both of these programs in the first quarter of 2014.

Thank you to our volunteer members

At Total Solutions Plus, we voted in our new board members in their respective regions. Last year, our Executive Officers were voted in, and will remain in this position for the next year. This is a hard- working Executive Committee, and I would like to personally thank them for their dedicated support of the association.

  • Dan Welch: President – Welch Tile & Marble; Kent City, Mich.
  • James Woelfel: First Vice President- Artcraft Granite Marble &Tile Co.; Mesa, Ariz.
  • Martin Howard: Second Vice President – David Allen Company; Raleigh, N.C.
  • Nyle Wadford: Chairman of the Board – Neuse Tile Services; Youngsville, N.C.
  • John Cox: Board Advisor – Cox Tile Inc.; San Antonio, Texas
NTCA president Dan Welch will guide the association through the end of 2014.

NTCA president Dan Welch will guide the association through the end of 2014.

Four new Regional Directors were recently elected to the NTCA Board of Directors. Our four outgoing directors in these regions have all served two terms, which are the maximum years allowed by our association by-laws.

  • In Region 1, Dennis Wigglesworth of Filling Marble and Tile in New Jersey has fulfilled his term, and is being replaced by Jon Donmoyer of JD Tile in Anville, Pennsylvania.

wigglesworth crop                 john donmoyer crop
Region 1 director Dennis Wigglesworth of Filling Marble and Tile in New Jersey (l.).
Wigglesworth has fulfilled his term and is being replaced by Jon Donmoyer of JD Tile in Anville, Pa.

  • In Region 6 we have had the good fortune of the support of Ricky Cox from Memphis Tile and Marble these past four years.  Ricky has been extremely supportive of all of our programs in his region. We have elected Mike Sanders of Sanders Hyland in Mobile, Ala., to join our Board of Directors.
  • In Region 7 we have been blessed with the support from two great contractors in the Twin Cities of Minnesota. Jan Hohn of St. Paul, Minn., is leaving the Board, but will stay on our Technical and Methods and Standards Committees. JoeKerber of Shakopee, Minn., has been on both of these commit- tees for several years, and will now join the Board of Directors as a Regional Director.
  • We filled our final directorship  in Region 8. Anthony Jung of Victoria, Texas, will remain on the NTCA Finance Committee, but is leaving the Board of Directors. We voted in Tave Baker of Holmes Tile and Marble in Jonesboro, Arkansas, to fill this important position.
Greg Michael  (l.), of Michael’s Custom Tile in Jacksonville, Fla., Region 4 director, with Anthony Jung  of Victoria, Texas, who has filled his directorship in Region 8. Tave Baker of Holmes Tile and Marble in Jonesboro, Ar., will replace Jung on the Board.

Greg Michael (l.), of Michael’s Custom Tile in Jacksonville, Fla., Region 4 director, with Anthony Jung of Victoria, Texas, who has filled his directorship in Region 8. Tave Baker of Holmes Tile and Marble in Jonesboro, Ar., will replace Jung on the Board.

 

  • In Region 11, which covers Northern California, we have experienced outstanding membership growth the past two years, and we have Martin Brookes of Heritage Tile and Marble to thank for that, along with our staff. He has really supported our programs in the area, and we approved him for a second two- year term.

I want to personally thank all of our volunteer members who support the association. The NTCA has more active support than ever before, and this is the main reason for the explosive growth in our membership. It is becoming evident at every conference and tradeshow we participate in. The overwhelming support we get from volunteer contractors and associate supporters is humbling to our entire staff.

Speaking of the NTCA staff, I am incredibly proud of their efforts over the years to make us the vibrant and effective association that we are. To illustrate this point, the following quote was excerpted from our Board Minutes at the meeting held recently from Total Solutions Plus. It came from Chris Walker, vice-president of David Allen Company in the Washington D.C. area, and chairman of the NTCA Methods and Standards Committee and the ANSI A108 Committee.

“I want to personally congratulate the NTCA staff for its management of revenue to get its programs accomplished and maintain a good financial position. The ability to fund and execute the programs it does and maintain a creditable financial position is remarkable. There is no comparison between NTCA and other associations.”

As we approach the end of a successful year, I would like to personally thank all of our members, volunteers, staff and subscribers to TileLetter, and wish you all a wonderful holiday season.

Business Tip – November 2013

mapei_sponsorFinancial Operations: overhead analysis, accounts receivable and payable and invoicing

In this issue of TileLetter, we continue with the Financial Operations section of the NTCA Business Reference Manual, as found on page 31 in that document. Last month we examined common accounting terms and the labor burden rate. This month, we review overhead analysis, accounts receivable and payable and invoicing. Check upcoming TileLetter issues for more tips and recommendations on running your business efficiently and profitably. To download the entire NTCA Business Reference Manual, visit www.tile-assn.com.

c. Overhead analysis
An overhead expense chart will show items like advertising, sales, office expenses, staff, rent, office equipment, telephone, computer, office supplies, job expenses, vehicles, job supervision, tools and equipment, service and warranty, mobile phone, general expenses, owner’s salary, general insurance, interest, taxes, bad debts, licenses and fees, legal fees, education and training, entertainment, association fees. Make sure all these overhead costs are factored into your job estimates.

d. Accounts receivable and payable
Accounts payable are people or companies  you do business with and whom you need to make payments to. Accounts receivable are people from whom you will be receiving money. Set up a system to track payments due to your vendors and subcontractors, as well as weekly accounts receivable reports so your customer accounts don’t get too far in arrears.

e. Invoicing
Typically, residential jobs are billed upon completion, with a “draw” requested to cover the cost of any materials purchased up front.

Commercial jobs are usually billed in stages. For large jobs, you may need to bill a “materials draw” to cover the cash outlay for materials to be used on the job. Commercial jobs are generally paid more slowly (45-60 days), so you need to plan your expenses accordingly. Most commercial contractors will hold a portion of your payment as retainage and require you to submit notarized applications for payment. Each contractor has specific forms for you to complete, and you need to make sure you read them thoroughly.

Many contracts state that you won’t get paid unless the contractor does (pay-if-paid), but this is not legal in some states. Know the laws of your state, and don’t be afraid to edit a contract accordingly.

You should put a payment schedule in your contract to control when you will be paid and the amount. This is new to GCs but if you will start implementing this, it will help your cash flow to know exactly when you will be paid. Poor payment schedules on contracts cause cash flow problems. They should be well defined and followed. If you are unsure, contact your attorney for the proper wording and implementation.