Security

91. Control entries, exits, and in-yard access to products—particularly high-priced goods that are easy to resell under the radar.

92. Make a note of who from a contractor’s crew is buying product in the event one of them is caught crediting the customer’s account for items not destined for the jobsite.

93. Take that thinking a step further. List the frequency with which those individuals come into the store. He or she might be wasting money on too many trips, making your business partnership appear less profitable when his or her boss runs the numbers.

94. Think you’re getting a few too many returns from one account? Divide your customers’ orders by project and project manager and keep an ongoing tally of the number of returns for each.

95. Separate sales, cash, and account-adjusting work. Task separate employees with making cash deposits and reconciling cash accounts. Note: Your accountants shouldn’t be signing checks.

Calculations

96. How is your installed sales division performing? Check yourself against these benchmarks:

a. Gross profit margin: 25% – 27.5%
b. Labor expenses: 10% – 11%
c. Controllable expenses: 15% – 16%
d. Recoverable labor cost: 70%e. Net profit: 5% – 7.5%.

97. A rule for pricing a job for a new client: “Take equal parts available information and gut feelings, mix them together with a dash of best expectations, and deliver to the client neatly typed in a timely fashion,” says Tad Troilo, Cranmer’s Kitchens by Design, Yardley, Pa.

98. How Much is Your Customer Worth?

CP = SP – (COG + COM + PROM + CC + DC + AR + PPD +BC) + (EC+FC)

(In other words, Customer Productivity = Sales price – (Cost of goods + commissioned salesperson and assistant + promotions + credit card fees + delivery cost + A/R carrying costs + prompt pay discount + back charges) + (extra customer charges + finance charges).

99. Take your business’s “blood pressure”: (Days Receivables Outstanding + Days of Inventory) – Total Days Payable = Cash Conversion Factor.

100. How much is your sales rep worth?

1. (Sales x Gross Profit%) x Compensation % = Earnings
2. Earnings + COGS + Other Expenses = Total Investment
3. Gross Profit $ – Total investment = Relative Value
4. Relative Value / Total Investment = ROI.

101. You, too, can deliver on time and in full. Here’s how:

a. Don’t agree to a delivery day and time that you know you can’t meet.

b. Tracking order performance doesn’t require advanced technology. Have your dispatcher mark the invoice when the orders go out. Personnel handling the invoicing collect the data and record it in a simple spreadsheet. This includes assigning reason codes to any items that aren’t “in full.”

c. Record why the order wasn’t shipped on time or in full. Include a reason code on each missing item to help managers identify weak points in your operation. For example: incorrect receiving; don’t carry the product; vendor shipped late; product damaged on yard; or out of stock.

d. Tackle problems immediately to quickly smooth any bumps in your company’s delivery process.

e. Know that tracking your on time, in full rate will be challenging at first. It’ll get easier with practice.