Reality Check

Check out the articles below written by Chuck himself, offering top-tier advice and thoughts on the industry:

A Paradigm Shift in Thinking Now!

Our industry is changing as we approach the half century milestone in America. The 1970’s oil embargos creating high energy prices resurrected our profession. The free market spoke and the shift to renewable energy (wood) came roaring back to life. The pioneers of what would become the NCSG and CSIA were free thinkers, self- reliant, don’t want to work for “the man” inclined individuals. This was the wild west for chimneys and our first phase of growth. After some time, our brothers and sisters in soot realized they needed education in a field that had little established knowledge. Eva Horton founded the Chimney Sweep Guild, which became the National Chimney Sweep Guild and then State Guilds were formed to share information and ideas providing communal help groups to improve skills. The next step was manufacture training and then certification. All of this happened during a 30 plus year timeline. The early years were primarily for the 1-2 truck operation. Time marches on, evolution occurs and the 21st century requires the chimney sweep of today to function as a Trade and Business having multi-trucks and employees with necessary support systems.

To have a modern Chimney Home Service Company, and be successful in today’s high customer demand market place, we must operate with a level of service that is expected by the public if we want to stay in business and be profitable while using our skill to create safe and warm homes.

So, what is the Paradigm Shift in Thinking?

Simple answer: Constant Training Development & Employee Engagement Investment.

The business owner and manager need to change the thought process on what and why we train. It’s much more nuanced than skills and proficiency of task. Company culture done correctly creates a work environment of trust, employee buy-in, sustainability and longevity creating profit for all to share.

Highly engaged workers are more productive, drive higher levels of customer satisfaction and profit according to a Forbes 2014 study. Companies of all sizes in other trades are making heavy investments in training seeking to stimulate and engage the workforce. By 2019 corporate training grew by 20% from 2015.

Changing demographics in the workforce.

In 2015 millennials became the largest segment of the workforce. Characteristics of millennials include: ambitious, loyalty -lite, hungry for development opportunities, very tech-savvy and always on social media. They expect the company to adapt learning and development goals to meet their needs. For businesses to thrive in this marketplace there is a need to keep skills sharp constantly to maintain employability. Companies wanting to attract and retain millennials must meet the needs of continual learning through face to face /hands-on and modern online learning. Platforms that are capable of hosting a dynamic and collaborative learning environment and delivers content in small retainable chunks is a must. The competitive advantage goes hand in hand with company training. The ongoing labor shortage and skills gap underscores the need of knowing how our employees learn and what is that capacity.

We must make time for learning

A lack of skill by the untrained creates stress, lack of motivation and kills the company culture. Incentivize training through monetary benefits and rewards. Encouraging the pursuit of always learning aligns with self- identity of millennials and creates a commitment to their value as a team member.

Hiring Cost

In 2019 the average employer spent $4,000.00 to hire a new employee. This is comprised of recruitment, job sourcing, background checks, DISC assessment and internal costs to facilitate the process.

Statistics: 

93% of employees stated well planned training positively affected their level of engagement.     

68% report training and development is the company’s most important policy.  

Gen Z will retain 50% more information if watched.

95% of people are more likely to retain information via video than text.

94% employees say they would stay with a company if the company invests in their development.

Goal Path

Now is the time to create a career path for employees. This clarifies employee’s goals, aids in employee retention and reduces hiring costs. People like to have a purpose and by investing in training and career development you invest in the future of your company by fostering job satisfaction and a sense of community. When employees do well so does the company.

ROI

To realize the full ROI of the investment in training you should consider that education can be a strategic business tool if you have clear goals in mind for said training. What skills need attention either new or remedial? The employees must have buy-in, so ask what they need and get a commitment from them to invest their time and energy. To have success you must create a clear and focused environment. Training time is education time only, no phones, emails or meetings. This increases focus and learning retention. Ensure employees are constantly engaged. Boredom is the downfall of any training module. Treat training as a project. This means well planned and interactive. Always evaluate the subject content and measure the lessons results with quizzes/tests and feedback.

Recap for successful learning

  1. Is the training engaging?
  2. Was the subject relevant and enjoyable?
  3. What was learned?
  4. Can the knowledge be applied in the workplace?
  5. Did this benefit the employee and company?

Training is an investment in your company. Thinking of it as another business responsibility like health care, PTO, workers comp, marketing and rent. This is the new shift in true cost of a growing successful business. All of the above components are necessary to meet today’s consumer expectations through trained and invested employees.

In Conclusion

Because millennials are the majority of today’s workforce, and as learning and development training move online to scale across the entire company, smart business owners invest in learning that is delivered through online platforms meeting the multifaceted need of all types of learners.

Don’t be a dinosaur, make the paradigm shift in your training mindset to move you and our industry to maturity enjoying a business model of stable workflow, workforce and profitability.

 

“For the best return on your money, pour your purse into your head”

     Benjamin Franklin

 

Chuck Roydhouse is the President of ROYDHOUSE EFFECT consulting firm specializing in making business’s Profitable and Organized. Chuck has been a small business owner for 40 years working in landscape and chimney industries. Chuck also was a career firefighter and retired after 25 years of service. He has a degree in Fire Science and Safety form Shepherd University, West Virginia, and is past President of the Chimney Safety Institute of America.

Chuck lives in Nashville with his wife of 30 years Linda and their three Labrador retrievers. 

You can contact Chuck via email at chuck@roydhouseeffect.com or call (410) 940-8896.

Cash: How to Keep It

Healthy cash flow is critical for any business’s longevity and success. Unfortunately, this is not seen as the fun thing for many to prioritize. Numbers and monthly statements become second fiddle to lunch meetings, conferences or new gadget acquisitions. Business usually bleed money slowly over months until there is no more cash to bleed. Statically 82% of small businesses in the United States fail due to poor cash flow management. Despite good accounting software, cash flow mistakes are the norm and not the exception most of the time without knowing this you are a willing accomplice.

Common cash flow management mistakes occur because of two main causes:

  1. Your business has poor operational strategies.
  2. Your business has a good operational strategy but you fail to execute.

1. What are some cash flow mistakes and how does this happen? One main failure is planning in advance. We don’t have a crystal ball, but the one constant is economic ups and downs in all businesses. Be prepared and don’t make these common gaffes.

Lack of cash savings is all too common. Almost 50% of small businesses in the U.S have less than 3 months of cash reserves if an emergency arrives on their door step. Like wise only a third of the businesses are confident they can access capital if needed. This is living paycheck to paycheck. To have incoming cash flow into business growth, you need to prioritize long term sustainability over short term growth.

Next, small unexpected expenses. We have all been through this. Do not be caught off guard with economic down turns. High inflation leads to high interest rates which if instituted in a heavy-handed fashion can squeeze the economy and put people into a panic- stop spending or cut back mode. Your business strategy needs flexibility. Set up and emergency money market fund in a separate bank account and ignore the temptations to tap into it until a crisis arrives.

Another mistake is Massive outflow of profits blind side. During a booming economy we can ride a high and risk more than we should hope in order to make it big. You end up spending too much chasing bigger profits. This over stretches the business and can actually break it. No matter how good the deal appears to be stick to your plan and budget. Do not go beyond what your balance sheet allows. You can still take risks but be cautious in all decisions. It’s okay to be flexible, but too much shows no strategy and leads to a crash.

2. Ever not follow through? Mistakes from poor execution is very common as well. Running and managing a small business is complicated and you must account for all aspects that make the “ machine” run. You can have great strategic planning and budgeted financial plans but without proper execution of said strategies pain and failure will appear. You must be disciplined.

You must track all your accounts. Tracking every dollar you spend and earn, is critical in a business. Not paying attention to the details no matter how insignificant can add up and not keeping your eye on the ball almost guarantees cash flow problems in the future. Software can help, but will not do your work for you. Software is only a tool to make the job easier, you still need to get in and dig. A well accounted business is a healthy business and it’s your job to make sure it stays that way.

Finally, the Failure to think and act in terms of cash flow is all too common. Most business owners experience the disconnect between budgeting and spending differences. This means when making purchase decisions most do not look past affordability. Buying and spending decisions should only be made when considering long term cash flow health. Being pragmatic and putting something off even though you can afford it may seem silly. The question is, in an emergency budget can you justify this purchase and maintain your business health? Your most valuable resource is working capital and by not preserving it usually leads to trouble. Most undisciplined businesses end up in debt and rely on credit to survive. Risky! This starts the vicious cycle of interest payments eating up your profit. Start a good budget and cash flow conscious habits so you don’t end up cash poor.

Achieving healthy cash flow is not hard and the secret is simple: develop a strong but malleable operational strategy and be disciplined in its management. Doing this will keep you in the black and boosts your cash flow. I love efficiency but it is always trumped by discipline. There are no shortcuts. If you do your do diligence, you are well informed, justified and cash flow cognizant your small business can avoid these pitfalls that most are seduced by,

Remember Cash is King

Chuck is the founder of ROYDHOUSE EFFECT INC, a company who primarily works with small service businesses in making them profitable, organized and efficient. For more information about our consulting and coaching services visit www.roydhouseeffect.com or call Chuck at (410) 940-8896.

Decisions Made Trusting Facts & Numbers

Everyday service company owners’ make difficult decisions based on incomplete information. Having significant repair contracts at stake as well as the extra pressures that arise from the urgency for its completion, client complaints, employee personalities, available materials and labor can lead to decisions that may not serve the company well.

As an example, if you were to be under-bid on three consecutive jobs, it might cause you to think you need to cut prices. But if you did an analysis of proposals over the span of a few years, this might not be the case. You may be winning an acceptable percentage of profit per opportunity and actually be above your goals. This is similar to losing an employee to a higher paying competitor. Instead of panicking and handing out raises to everyone, a logical solution would be to analyze salaries. This could reveal that overall, your team is well compensated. If you had shot from the hip and matched the higher rate, you would have upended the entire pay-scale and blown your yearly budget.

Most business owners do not ask enough questions or look into the details. You must collect statistics, costs, sales ratios and employee retention dating. By knowing these numbers, you can make fact-based decisions which will improve performance and profit. Once you have mastered this process, you can then tackle some other innovative best business practices such as:

1. Set goals and measure results

            Companies always perform better with measurable performance goals that track results.

2. Rely on fact-based decision making

          Combine insight and foresight, validating your instincts with real data from inside and outside your company.

3. Pay attention to reviews – send out surveys

            Get valid input from current clients, employees, and third- party surveys. Use this data to make improvements and let your clients know that you are not just listening, you have closed the loop to improve the company client experience.

4. Recruit all the time

            Hire talent when you find it not when you need it. This can be accomplished using combinations of in-house and professional training for on boarding new hires and the development of managers.

5. Strategically Market

            Have an integrated marketing and communication system in place. This should be linked to growth goals in order to realize the company objectives.

Remember! What I have laid out for you must be constantly monitored and updated to create a flexible business model because in today’s business climate we must be prepared to adapt and change to meet the shifting client expectations and unstable economic pressures.

The old saying, “The ox is slow but the world is patient” is no longer true. We live in a world of instant gratification. Get on board or be left behind, your choice.

Chuck Roadhouse is the President of ROYDHOUSE EFFECT consulting firm specializing in making business’s Profitable and Organized. Chuck has been a small business owner for 40 years working in landscape and chimney industries. Chuck also was a career firefighter and retired after 25 years of service. He has a degree in Fire Science and Safety form Shepherd University, West Virginia, and is past President of the Chimney Safety Institute of America.

Chuck lives in Nashville with his wife of 30 years Linda and their three Labrador retrievers. 

You can contact Chuck via email at chuck@roydhouseeffect.com or call (410) 940-8896.

Preparing For Changing Economic Times

Businesses have weathered many challenges since March 2019. The China Virus has given a 1-2 punch to the economy. During my 40 years of being in business I have witnessed the pendulum swing between economic growth and recession. Things had been very strong for most of our industry until Covid. For many the demand in our services actually increased during lockdown as many wanted their home upgrades or noticed items in need of repair. If you were able to capitalize on this good for you. Other pressures on a stable economy are stressing the bounds, mainly oil costs. In 2021 there was a severe cut back in oil production in the U.S. This happened as the demand increased. When demand out paces supply, costs increase and shortages occur. What does this mean to the average business owner? Simple, costs of all goods and services rapidly increases which costs you more to run your company. If this and other world regime tensions increase, stability is questioned and recessions happen. If you have not realized this already and have not taken the steps to protect your business and personal income from economic downturn, you should act now.

Action Items

  1. Debts 

While I strongly advocate being debt free both in business and personal finances, sometimes this is not the reality, consider evaluating existing debts now and refinancing before the inevitable interest hikes are implemented. Take the opportunity of the cheap credit now and refinance to lower payments. Avoid falling into the trap of increasing your debt to spend more. The quicker you pay off a loan the quicker this payment goes into your bottom-line equaling profit to reinvest or take as an owner’s dividend. Remember, the more debt you have the more vulnerable your company is.

  1. Stack Cash

Recessions result in fewer sales and less cash to support operations due to fear of economic contraction. Disciplined financial strategies that fund all things to survive in a down period must be the norm. The key is ample liquidity. A rule of thumb is a minimum of 6 months of cash and 12 months is far superior to provide real peace of mind. Plan for the worst “crisis budget”. The best way to create this type of scenario is simulate a 50% revenue drop, what does that look like and what steps can you employ to survive in this event?

  1. Line of Credit

As stated before interest rates are historically low. While your financial picture is hopefully very healthy presently, this is the time to establish or increase a line of credit. If you wait until you need to look for line of credit you are too late. The best time to apply is when you are not in critical need of funds. This almost ensures success in obtaining the desired amount or increase. Lenders have tightened requirements and credit history, both company and personal, must be strong since you will most likely personally guarantee the loan. A line of credit is a safety net and should only be used like a credit card for short term spending and in emergency situations. However, if you do not access the line from time to time your bank may reduce the line amount or cancel. I recommend tapping the line from time to time and pay the amount used back in over a three-month period. A second mistake is using the line as an “evergreen loan”. You don’t want to use the loan for a large purchase and pay a minimum over a long period of time. Banks want to see up and down activity when using your line of credit.

  1. Acquisition War Chest

Economic down turns separate the weak from the strong. Having a dedicated savings account earmarked for gaining market share, acquire competitors and recruit high demand talent allows you to mash on the gas pedal while everyone else is shoring up the ramparts. Smart stock investors buy when all others sell in a panic. Avail oneself of these opportunities.

Recap

  • Eliminate debt and or refinance
  • Create cash stock pile with crisis budget
  • Apply or increase line of credit now
  • Establish war chest for opportunities

My intent is to make you aware that both good and bad economic times cycle back and forth. If you plan accordingly, be disciplined and work lean you can survive and prosper even if the economy challenges your business during this current ambiguous climate.

Chuck Roydhouse is the President of ROYDHOUSE EFFECT consulting firm specializing in making business’s Profitable and Organized. Chuck has been a small business owner for 40 years working in landscape and chimney industries. Chuck also was a career firefighter and retired after 25 years of service. He has a degree in Fire Science and Safety form Shepherd University, West Virginia, and is past President of the Chimney Safety Institute of America.

Chuck lives in Nashville with his wife of 30 years Linda and their three labrador retrievers. 

You can contact Chuck via email at chuck@roydhouseeffect.com or call (410) 940-8896.

Keep your business out of the poorhouse and call on Roydhouse Effect.