For many young people just entering the workforce and frustrated employees, their dream is to one day own their own business. While business ownership can provide a tremendous sense of freedom and accomplishment as well as generate significant value, it can also create significant stress, require countless hours of dedication and dig an enormous financial hole.
According to recent statistics (Bureau of Labor Statistics) 20% of small businesses fail in their first year, 30% fail within two years and 50% of small businesses fail after five years. About 30% will make it through their 10th year in business. So what can you do to beat the odds and become one of the business owners that go on to fulfill their dream of freedom, flexibility and wealth? Let’s explore some available options that have been developed over the past twenty-five plus years by Intelligent Office, a Denver based business services provider. We’ll follow the journey of a small local electrical contractor as he learns about being a business owner and discovers how to beat the odds.
Like many small business owners, you have likely developed a skill through formal education and/or over time with on-the-job training and enjoy your work but believe you can do better on your own. That is the story for many small business owners, particularly in the trades. So, you form a business and strike out on your own with great excitement and trepidation. In Tony’s case he learned the electrical trade while in the military and working for multiple electrical contractors (6 years) and taking classes outside of his work schedule. After about two years working in a small private sector business, he had an opportunity to acquire the business. While that allowed him to avoid some of the work and challenges of starting a business from scratch, he soon realized that he still had to learn what it really meant to own and run your own business.
For anyone starting their own small business, after a short period of time you are surprised to discover that the work you so looked forward to doing has been replaced largely by tasks that you had no idea took so long, tasks you are not skilled at doing and tasks you don’t enjoy. This is often the same if you acquire a small business, as Tony discovered. The result is often frustration and less revenue than you had planned because your available billable hours have been reduced and your enthusiasm for running your own business may be waning. Unless you can turn this scenario around you are likely to become one of those statistics referenced above.
A Sustainable Solution
Improving the health and wellbeing of the business owner and business are essential to any sustainable long-term solution. What does that mean to you as a small business owner? Let’s go back to the reasons you wanted to own your business in the first place; you wanted to have more freedom and flexibility and gain some financial independence.
In your mind that simply meant being able to do the work you love while helping your clients and making lots of money. Easier said than done when you consider the characteristics of most small business owners. You’re likely a Type-A personality who is ambitious, controlling, highly competitive, a workaholic and you lack patience. That doesn’t sound like a good combination for someone who needs to delegate work.
Now let’s go back to Tony and see what he has done with the help of Intelligent Office to improve his business and his life by decreasing the things he doesn’t like to do (maybe isn’t good at) and increasing the things that he enjoys doing (which by the way, make him/his business more money).
Tony is similar to many other small business owners who inherently feel the need to “do it all themselves” from answering the phone to answering clients/prospects routine questions to invoicing. That’s an enormous amount of administrative work that, contrary to the belief of most small business owners, doesn’t have to be done by them. That’s where Tony’s experience and openness to try something new has paid off many times over. Let’s start with something that seems to be simple and doesn’t appear to take much time, phones.
Many small business owners tend to minimize the importance of always answering calls live and its impact on their business. They suggest they want to provide a personal touch or differentiate themselves by making sure that they are the one who answers the phone and talks to all of their clients and prospective clients. In reality what often happens is the caller and overall client satisfaction level decreases for the following reasons:
You’re not able to answer all of your calls. You’re in the middle of something and have your hands full. Surely whoever it is will leave you a message and you will return their call shortly. Then you move onto the next task and you don’t call them back right away. They’re not happy and you may very well have lost an opportunity. Studies have shown that 85% of people whose calls are not answered will not call back. Based on personal experience, it’s even higher for the trades as most people needing service just move to the next person on the list until someone actually answers their call.
You answer the call but interrupted your meeting or discussion with your current client or you take the call only to have your current client notice that you are distracted from his job. In either case, the client is not happy that you are not treating them with the respect they feel they deserve (and are paying for).
In addition, those interruptions add up and can have a significant impact on both your top and bottom-line revenues. Is there a way to translate this potential into real value (as in a good Return On Investment or ROI) for the company? Let’s see what Tony did.
Finding A Suitable Help Solution
Understanding what was at stake and the potential impact on the future of his business, Tony began exploring possible solutions starting with hiring a dedicated employee. While that felt like a good potential solution from a quality and consistency perspective there were many aspects that were scary. What if the business changed and there wasn’t enough work to support an employee (which seemed hard to justify as is)? How would he find the right employee and train them while being on job sites the majority of his day? Would he be able to find someone capable of working independently who would be dependable and productively contributing to his business? What about all the other HR associated tasks from payroll to vacations to government mandated requirements? For a small business owner these can seem overwhelming. Is there another way?
After doing some exploring and talking to other business owners, Tony was introduced to Intelligent Office and his whole perspective changed. He listened to the story of how and why Intelligent Office began, met the local staff and saw how they were able to deliver affordable services that were customized and unique to Tony’s business. It all made sense but could it be too good to be true? He decided to give it a try and signed up for basic phone support to answer all of his calls, screen calls according to his rules, answer basic caller questions and only transfer calls that needed Tony’s immediate attention. What happened next?
In Tony’s case the “few calls per day” turned in to an average of more than 150 incoming calls per month (over the first 4-1/2 months) when actually tracked by Intelligent Office. We estimate that this translates into more than a full day per month of billable hours that Tony was able to recapture and convert to revenue. In addition, he has become much more efficient on the job site without the interruptions (adding to the number of jobs he is able to complete & increasing revenue even more). He no longer gets the comments about being billed for someone else’s time when his client notices him taking a call while at their job or the “are you kidding me….” comments he has received when interrupting a conversation with a client to answer a call about another job.
With Intelligent Office’s onboarding process, technology and skilled people Tony’s callers and clients believe the person answering the phone has been hired and trained by Tony and has been working with him for some time. Tony’s concern about that “personal touch” was eliminated very quickly after receiving comments from clients about the new person he hired and how well their call was handled. He was also pleasantly surprised by comments about the phone always being answered promptly and professionally (something seldomly seen with very small businesses, especially trades businesses). Callers completely assumed that his new assistant was “at the shop” all day, each and every day helping to manage his operations.
As a result of Tony’s initial experience, he wanted to explore other ways that Intelligent Office could assist with his business and help to create the business and experience we had originally envisioned. Like many businesses, his daily processes had evolved over many years and remained largely paper based. Working with Intelligent Office he was able to identify other key opportunities for improvement, starting with “digitizing” his workflow.
Going from Paper to a Digital Workflow
After evaluating multiple software packages designed for service-based businesses, with the help of Tony’s new virtual support staff at Intelligent Office, they identified the right solution. This solution is characterized by an easy to understand user interface and intuitive workflow, supported on mobile devices as well as desktop or laptop computers. It has the capability to support workflow from a new client request for an estimate all the way to completing the job and receipt of payment (& automatic syncing with QuickBooks!). It supports multiple vehicles/crews, includes options for notes to/from the field technician, the ability to record pictures from your jobsite, routing to the jobsite and more. (We did not select all of these options but like knowing the capability is there and can easily be added on demand.) Best of all, it was affordable for a small business.
Setting the system up for Tony’s company was quite easy and straight forward. With the help of Intelligent Office, the process was completed very quickly and his list of typically used parts (provided by his main supplier) was imported and validated. Between the normal flow of jobs, Tony spent about a week getting familiar with the new software and workflow. Since the new digital workflow mirrored his normal process it didn’t take very long to learn how to add a new client, book a job, complete it and finally invoice and take payment. That exposed the next great opportunity for improvement, “scheduling” (that quickly opened up to probably the biggest opportunity, having Intelligent Office “estimate and book jobs”).
Adding Scheduling Services, Estimating & Booking Jobs
Once Intelligent Office began taking Tony’s calls it became obvious that significant value to both clients and Tony could be provided by answering basic scheduling questions. Very often clients would call to confirm where they were on the schedule, confirm that someone was actually going to show up at the scheduled time or sometimes request to reschedule or change their scope of work. Just having access to a digital schedule that would dynamically update whenever anyone changed it was key to enabling this capability. Callers discovered they could, with a single call, very quickly and efficiently confirm their appointment or make changes without having to be transferred or leave a message (and hope the call was returned). It proved to be another small change that incrementally improved the caller experience and reduced interruptions on the job site.
It seems no matter how complex the business, there are parts of it that can “fit into a box” of things so well defined that they can be delegated to others. Electrical contracting is no different. While Intelligent Office does not have a licensed master electrician on staff, Tony was able to identify several types of jobs that are essentially always the same from an estimate and booking perspective. Things like replacing a switch, fixing an outlet, replacing a breaker, installation of an appliance hook-up are examples of items falling into this “box”.
After a simple evaluation of the types of jobs historically booked, we thought that if we could book 10% to 15% of Tony’s jobs in this way, we would be very successful. What we found was that by enabling callers to book with a single call, more often than not callers would book service on the spot. This has resulted in an increase in jobs booked and a much happier Tony as jobs magically appear on his schedule, all set up and ready to go.
Callers seemed to understand and accept that while the estimate we provide is the norm, their actual cost may vary. They seem to very much appreciate having basic questions answered and the potential of booking simple services with a single call.
How much you ask? The month prior to writing this white paper 70% of the total number of jobs booked for the month were successfully booked without any intervention from Tony (far exceeding our target for success). While this level may not be sustainable, it has significantly impacted Tony’s business and changed the way he thinks about and operates his business. It further reduced the number of calls he had to take and the amount of work required to book a job, increasing his time on the jobsite (his happy place) while actually growing his business.
Jobs requiring a visit and custom estimate are now easily identified by Tony’s virtual staff at Intelligent Office and an appointment is scheduled for Tony. This also helps to improve the caller experience and overall operating efficiency of the business.
Invoicing Made Easy
The new software (business operating software) also provided another significant benefit, syncing directly with QuickBooks, the #1 used accounting solution for small business. Once Intelligent Office sets up a client and job (according to Tony’s instructions for each type of job), invoicing becomes as simple as a two-button process on his smart phone. By clicking the “Job Complete” button and “Invoice Client” button he automatically generates an invoice for the job, emails it to the client and provides a link for direct payment. Now instead of the invoicing process taking a full day per week, Tony is able to complete it in minutes per week (typically completed before he leaves the jobsite). This has resulted in nearly a full week of billable hours per month that have been converted to available billable hours and new revenue.
Often additional parts do need to be added to the workorder before invoicing. Having all of the job details set up however saves considerable time and if necessary, Tony is able to easily add additional items directly from his smart phone before clicking on the “Job Complete” button.
Tony can now, more easily than ever, accept payment immediately upon completing a job. Whether it’s by credit card, check, cash or other acceptable method of payment, with a couple of button clicks on his smart phone he is able to accept and record payment and email payment verification to his client. This has resulted in a decrease in average time before payment is received and reduction in overall accounts receivable (AR).
Other Unanticipated Benefits
As a result of the support provided by Intelligent Office and change from a paper to digital process, Tony has discovered a number of additional benefits he hadn’t anticipated.
The business is more differentiated
- Every call is answered during business hours and most of the time callers have their questions answered and/or service booked “on the spot”. We find that this is very unusual for most small trades businesses.
- Interruptions while on a job site or during meetings with clients have been eliminated. Clients/prospects very much appreciate the attention and focus provided while meeting and/or talking with them.
Book more business
- Being able to work uninterrupted on the jobsite and changing from paper to a digital process have resulted in a much more efficient process. This has allowed Tony to grow the business without adding additional resources.
- After hours & expedite associated revenue have increased. Intelligent Office has been much better than Tony at “following the rules” when it comes to after hour services.
- Tony is able to focus more on what he enjoys doing (and makes the most money for the business) without being concerned about missing new job opportunities.
- The invoicing process has become much faster and easier. Invoices are now completed before leaving the job site in most cases. Since invoicing is not something Tony or most small business owners enjoy, they are often not very efficient at it, resulting in it taking longer to complete and creating frustration.
Create additional time
- This process not only transformed the business, it has also rejuvenated Tony and created additional free time. It’s now much easier for him to think about other ways to improve and grow the business, spend time with the family or take some “Me Time”.
The business is more valuable
- The updated business processes and tools (business software) have made the business much more scalable and reduced dependency on the owner (reducing the risk for a new owner taking over the business, thereby increasing its value). Now additional workers/trucks/crews can easily be added without a significant increase in time and effort.
- Processes are more efficient, creating more potential billable hours and revenue without adding significant additional expense.
- Delegating tasks that do not require the owner’s attention make the overall business more efficient and add additional revenue potential for the business.
- Customer/caller satisfaction significantly increased by providing a live answer. In most cases the caller can have their questions answered or job booked with a single call. This creates significant company differentiation, especially among small trades companies.
f you would like to learn more about Tony’s journey to transform his business and life, check out this case study. It provides additional detail and numbers to further quantify his level of success. To start your own journey or learn more about how to improve your business and life, contact Intelligent Office – Bloomington at 952-252-8600.