Time Management

10 Small Improvements That Have a Big Profit Impact

Improvements do not have to take an enormous effort to make a huge impact on your profits. Sometimes it’s the small things that add up over time. Here are 10 simple improvements that can have a significant impact on your profits:

  1. Schedule work better: Are you wasting time by scheduling work poorly? For example, do you allow enough time for you or your employees to complete a project within the scheduled time? If not, then there will be too much stopping and starting which kills efficiency. Another scheduling challenge is to make sure that you do not have too little or too many staff members scheduled at the same time.
  2. Set aside time for high value activities: High value activities are not usually urgent, which makes them get pushed to the side. In order to get these items done, you need to schedule this type of activity, even if just an hour or two a week.
  3. Look at your financials: Do you look at your financials or tax return just once a year or possibly not at all? For starters, you should review your financials at least once per month to see how you are doing versus the same time last year. Your financial statements are the measurement of your business’ results, and you need to know how you are doing to make better decisions.
  4. Consistency of pay: When possible, try to keep your pay and distributions consistent, unless paying yourself a bonus or bonus distributions. This makes it easier to manage your cashflow and reduces the temptation to take too much just because you had a good month.
  5. Work less: Working crazy hours will burn you out over time and is not sustainable. Try to consistently reduce your hours over time to give yourself a breather. If you become depressed or develop a health problem, then you will not be able to work at all.
  6. Acknowledge people: Show sincere appreciate, gratitude, and respect for your employees, customers, vendors, and especially your family for bearing with you during good times and bad.
  7. List your activities for a week: Over the next week, jot down everything that you do and how long each task takes. Then, ask yourself, “Should I be doing this, should someone else be doing this, and does this even need to be done?”
  8. Pay extra towards your debts: Even a small amount will add up to quickly pay off your debts. You will save interest and eventually increase your cash flow. You’ll also think twice before incurring more debts.
  9. Contact an old customer: Is there an old customer or client that you liked to work with and have not heard from in a while? Maybe there was a misunderstanding that you can easily resolve or maybe no reason at all and they just need to be asked to come back.
  10. Use a pricing worksheet: Instead of just winging it with your pricing, why not develop a pricing chart? It will take the guess work and emotions out of pricing, which ends up causing you to undercharge.

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5 Ways Your Calendar Will Help You to Work Less Hours

Are you using your calendar as a tool to be as productive as possible? Most people do not use their calendar in a way to maximize its effectiveness, but if used properly, it can help you to reduce the amount of hours you work. Here are 5 ways your calendar can help you to work less:

Scheduled tasks get done: When a task is scheduled there is a high probability that it will get worked on. Have you ever had the feeling that you did not get anything accomplished on a particular day? The main cause is most likely due to not having tasks scheduled.

Allocation of time: How much time should you allocate for a specific task or meeting? By allocating specific time slots and durations, this will help to alleviate the open-endedness of meetings and tasks. Parkinson’s Law states “Work expands to fill the time available for its completion.”

Batching of activities: Similar activities may benefit by scheduling them close together or within the same day(s). For example, new clients or patients may need a much longer time slot for an appointment, which can all be scheduled on a specific day.

Schedule key tasks early on: Important, but usually not urgent tasks, should be scheduled first thing in the morning or early in the week. There is a constant pull for your time and if you do not focus on important items first, then you may never get to them.

Long-term planning: A calendar can include tasks that are several weeks or months in the future. This can include both tasks and meetings. If you can plan your vacation months in advance, which is very important, then you can and should plan business tasks well in advance also.

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What if You Just Don’t Feel Like It?

Ever have one of those days? It’s a struggle to get out of bed, and once you do you feel like you are walking around with weighted boots on your feet? What’s the solution to this common problem aside from going back to bed? Because your energy levels and health have a significant impact on your productivity and the ability to achieve successful results, here are a few tips to overcome sluggishness when it comes about.

Just start: Even though you don’t feel like getting out of bed, starting a project, or exercising, you must resist the temptation to give in to these feelings. All you need to do is get past that initial resistance and just start doing. Once you are out of bed, you just won the first battle against sluggishness. Did you ever notice that after you start something then you end up continuing the task and finishing?

Routine and daily scheduling: The more you schedule important tasks the more you will eliminate the thought process of what to do. For example, if you wake up at 6 AM every morning to go for a run then it will be easier and easier to do as this becomes a habit. Also, if you schedule tasks on your calendar then it creates a sense of importance and things get done.

Avoid sluggishness: The best way to overcome sluggishness is to avoid it in the first place. Take a look at your life, including habits, routines, schedule, diet and anything that impacts your energy levels. Years ago, I dramatically cut sugar out of my diet by reducing the amount of sugary beverages I drank and my energy levels skyrocketed. I do miss drinking sweetened iced-tea and soda, but I sure don’t miss the drain on my energy.

Look around you and take notice of the energy levels of people around you. Generally those with higher energy levels are more productive and quite possibly more positive to be around.

Don’t Change for the Exception

Most people don’t like conflict and make a great effort to avoid uncomfortable situations with people, especially those who are difficult to satisfy. It’s important to learn from these situations and consider their feedback, but you probably should not change your business practices because of them. Actually, if you listen to them you may seriously harm your business. Here are a few examples:

Pricing: There is always going to be someone who thinks that your product or service is priced too high. Most likely this is not that case as most businesses actually underprice their services. This is true in all industries, from software developers to manufacturers. If you do not price your product or services properly, then there will not be enough money to invest back in your business to support operations or make improvements.

Speed: Everything takes time. This can take the form of turnaround time or communications. Today, communications are instant, but it doesn’t mean that a business owner can communicate instantly. If you rush or perform work out of its place, then it can negatively impact the quality or your product or service. An example of this was on the show The Profit regarding a furniture manufacturer that would rush furniture production when a customer was over eager to receive delivery, but then their quality would decline dramatically.

Technology: There is always someone who will resist the implementation of technology, but it doesn’t mean that you shouldn’t move forward if technology will help your business. You may be able to make exceptions, but you should still change.

The bottom line is this does not mean that you should over price your services or perform poorly for your customers, but to be careful not to listen to the wrong people. Sometimes you should put in ear plugs when you hear the squeaky wheel.

If You Want More Success Then Know the Difference Between Important vs Urgent

Important vs. urgent. Many people confuse the two, but if you want to be more successful, then you need to be able to discern between them. Important items have great significance or value while urgent items require our attention immediately. Here are some examples:

Important:  These are items that you need to do, but do not have to be done today, such as projects and assignments, planning, exercising, learning/training, saving for the future, etc.

Urgent: These usually have to do with grabbing your attention immediately, such as text messages, social media, doing dishes (our spouses may disagree with this one), interruptions, emails, most telephone calls, etc.

The problem arises when the urgent items seem to be important because they are pulling at us, and then we ignore all of the important items that we should have done. This is probably why many people say that they didn’t get anything done because their attention was diverted to urgent items. Even worse is when we procrastinate and make the important items both important and urgent.

What are some solutions? If an item is important, then you should set aside time either daily, weekly, or monthly to take care of it and actually put it on your calendar. Once an important item is scheduled there is a high probability it will get done. As for the urgent items, you can schedule these as well to take care of them at specified times or on a specific day. If you want to be bold then try this experiment for one week or even one month: shut off all of your alerts, emails, etc. while you are working, and designate a time to check them, say twice a day. Then, see if your productivity improves, and let me know what happens.

How a 10% Productivity Increase Can Increase Profits by 35%

A simple way to increase the profits of a business is to increase employee productivity. Each business and industry is unique, and here are several simplified illustrations to show the impact. The assumption is that if productivity increases by 10%, then sales will also increase by 10% due to extra capacity as long as there is demand for services.

Example #1: A service business that also has product costs, such as a tradesman, landscaper or other service provider that also sells products to a customer.

Example 1
 Current 10% Increase Diff %
Sales          1,000,000          1,100,000          100,000 10.0%
COGS              350,000              385,000            35,000 10.0%
Gross Profit              650,000              715,000            65,000 10.0%
Expenses              500,000              512,500            12,500 2.5%
Net Profit              150,000              202,500            52,500 35.0%

 

Example #2: A professional services business such as a consultant or architect, that does not sell products.

Example 2
 Current 10% Increase Diff %
Sales              750,000              825,000            75,000 10.0%
Expenses              450,000              461,250            11,250 2.5%
Net Profit              300,000              363,750            63,750 21.3%

The big question to ask is how can this be accomplished? Here are 3 ways:

  1. Having the Right Employees: Making sure that an employee is a good fit for your business is crucial. There are traits beyond technical capabilities that you should look for, such as attitude, ethics, loyalty, and energy levels.
  2. Training: A highly trained employee will be much more productive because they will know what to do and how to do it correctly. Mistakes and lack of training cost time and money.
  3. Better Scheduling: Virtually every business needs to schedule their jobs, appointments, meetings, work, etc. Proper scheduling can easily be implemented and yield a very high return with usually little to no cost.

6 Ways to Cut One of Your Largest Expenses – The Grocery Bill

I’ve had a conversation about the grocery bill with several clients recently and thought it would be helpful to share some ideas to both save time and money while shopping for groceries. As most of you know, we have quite a few mouths to feed! Unless you eat out every single meal, then this article applies to you.

  1. Only Go Food Shopping Once a Week: Every time you go to the grocery store you make impulse purchases, which can significantly increase how much you spend. Also, is there ever a short line at the grocery store?
  2. Plan Your Meals for the Week or Month: If you know what you are going to eat ahead of time, then you can coordinate your food shopping with your meals. You can also see which meals make sense to cook on certain days to coordinate with your activities or work schedule.
  3. Make a List: This will make your trips more efficient, and will help to reduce the waste of throwing out food that you do not need. An advanced technique, if you are Excel savvy, is to make a list that you can reprint and then check off the items that you need. It will take a short time investment, but will save time and money after it is set up. Less waste = more money saved.
  4. Use the Freezer: When meat or other perishable items are on sale, then buy in bulk and freeze what you can’t use right away. To thaw, you can place the meat in the refrigerator a day or two before you need to use it and it will defrost slowly. This doesn’t always work well with fish, though. You can also use the freezer to cook double batches or meals, which will also save cooking time.
  5. Look at the Flyer and Stock Up: Once you get used to using the flyer, it only takes minutes to looks for deals, and then when you do find them make sure to stock up with as much as you can without the food going bad.
  6. Try the Store Brands: Many times the store brands are much less expensive than the name brands and the quality/taste are pretty good, but you have to try for yourself. A good example of this is cereal.

Other tips that are probably not worth the time and savings:

  1. Excessive Coupon Clipping: Spending more than a few minutes is enough time and will produce some savings. More than that and you should probably be on a reality show.
  2. Multiple Stores: If you are going to shop at multiple stores than you will use up a lot of time shopping and planning to save just a few bucks.

There’s Never Any Time!

We all work hard every single day, but often feel that the day was spent without getting anything done. There is something you can do about it, and here are a few tips to make your day more productive:

Do the Most Important Thing First: It may seem obvious, but if you don’t do what is important first, then you may never get to it. There are constant distractions that are always fighting for your time, and can easily eat away at it. This brings us to the second tip.

Don’t Let Your E-Mail or Mobile Phone Control You: E-mail is such a powerful tool, but can control and distract you. The same applies to your mobile phone, which usually receives phone calls, e-mails, alerts, text messages, etc. If you are always checking and responding to your e-mails and text messages, then your productivity will be decreased dramatically. It’s better to set aside time each day to take care of them.

Stop the Multi-Tasking Myth: I’m not convinced that doing two things at the same time makes you more productive. Rather, it will take you longer to complete two tasks together, then to complete one first and the other second.

I also like and practice the following: keep only the item that you are working on at your desk, plan your day ahead of time, and know the difference between urgency and importance. Use your time wisely as it is the most valuable resource we all have.

5 Simple Ways to Improve the Management of Your Business for Little to No Cost

The success of your business depends upon how well you manage it. From a start-up all the way to a billion dollar corporation, managing your business well will help to insure its success. Since most businesses are small businesses, here are some ways to help a small business owner.

Answer the Phone: When a customer or prospective customer calls, someone should be available to answer the phone. Struggling business owners tend to have calls go to voicemail where they lose thousands of dollars of potential sales each year by not taking the first step to speak to an interested potential customer or a repeat customer.

Follow-through: Smart business owners quickly follow-up with their customers when they need a service or product. Whether it is a price quote or to gather more information for what is needed, this is crucial. A customer should not have to throw themselves at you.

Don’t do it all yourself: See the first point. You need to delegate tasks, especially those that can be time-consuming and are easily outsourced.  A perfect example is payroll and administrative tasks. The cost of outsourcing payroll is fairly insignificant, but can free up valuable time. Other examples are answering the telephone, cleaning and maintenance, and running simple errands, such as ordering supplies and going to the post office.

Focus and time-management: You pay nothing for this, but yet it can cost you your business. You must focus on the important aspects of your business, with many of them not being urgent. Stop wasting time on non-valuable activities and spend your time doing what matters.

Marketing: Sometimes marketing can be very expensive, but it doesn’t have to be. It can actually be free or cost very little. Usually businesses stop marketing when they are busy, and then cut back on marketing when they are slow. These are both mistakes, as marketing should be done throughout the year, and be budgeted for.

These are just a few of the many ways to manage your business the way it should be managed. Manage it the right way and you will be rewarded.

Ramp Up Your Knowledge with These Books

Reading books can be an extremely effective way of obtaining knowledge. A brand new book can be purchased for $20 or less and even less for a used book or an e-book. If you can borrow a book from the library then it’s free (accept for possible late fees)!

Here are some books that can help you to better your business, finances, and personal life:

The Seven Habits of Highly Effective People by Stephen R. Covey. The seven habits are principles and include habits such as “Put First Things First” and “Sharpen the Saw.” They are all simple habits, yet extremely powerful.

The Millionaire Next Door: The Surprising Secrets of America’s Wealthy by Thomas J. Stanley and William D. Danko. This book compares the behaviors of people who accumulate wealth such as the type of cars they drive, which neighborhoods they live in, and other lifestyle habits.

Getting Things Done – The ABC’s of Time Management by Edwin C. Bliss. We all have the same limited amount of time each day, which is why we need to use it wisely. This book is filled with practical ways to use your time more effectively, and as a plus it is a quick read.

No B.S. Direct Marketing by Dan Kennedy. Small businesses need to market their business, but usually don’t know how. You will find examples of how to use direct marketing effectively to grow your business substantially.