Three Simple Actions for 2021

– By Ruth King

Doing these three simple actions will help you stay profitable and build wealth for years to come.

Like our profit and loss statements, we get to start over. 2020 is done. It was an insane, nutty year. We have many lessons learned from this past year which we can incorporate into 2021. The most critical ones are described here. Implementing these simple, easy to do activities will help 2021 and beyond be some of your best years, whatever happens with the economy and state of the world.

 

1. Save cash.

The companies who survived had cash in savings. Even companies who got PPP loans had to survive for 3 months without them. Be like one of my clients who said at the beginning of the shutdown, “I have $X in the bank, a line of credit of $Y so I am comfortable that I can survive anything – even if it lasts a year. Thank you for making us put 1% of revenues in a savings account.”

Saving cash easy to do: Put 1% of all revenue that comes in the door in a savings account. Do it every week. At the end of the week when you are creating your weekly cash flow report determine your total deposits for the week. Take 1% of that number and transfer it to your savings account from your operating account. Email me, (ruthking@hvacchannel.tv) if you’d like a sample.

And, if you are on monthly recurring billing for your maintenance clients, instruct your credit card company to put that money in an account that is NOT your operating account.

Then, when it is large, don’t get tempted to touch it. That cash is your rainy day fund for emergencies such as we went through in 2020.

 

2. Reactivate your inactive customers.

Make a list of all customers who have bought from you in 2019 and 2018 but did not buy in 2020. Contact these customers and give them a reason to buy in 2021. Contact might be through a postcard, a letter, or best, a telephone call.

You might start the phone call with, “Ms. Customer, thank you for using our company’s products in the past. I probably don’t want to know the answer to this question, but I need to know the answer.”

Then pause…usually you’ll get a laugh.

Then ask this question: I’ve noticed that we didn’t do business with you in the past two years. Did we do something to make you mad?

Then resolve the issue and see whether you can get the person back as a customer.

You may offer a special discount for current and former customers on any product or service (make sure you include current customers so they don’t feel slighted). Also make sure that whatever you offer is still profitable for your company.

You should not offer a special price on a service that causes the service to be unprofitable because you lowered the price too much.

 

3. Share a piece of your profits with your employees.

These are the people who help your company survive and thrive. Let them earn a small piece of the profit when the company reaches its sales and profit goals. Put a year-long contest in place and track results every month. Everyone will be more committed to helping customers and internal team members.

Hold contests throughout the year. If the company meets a certain revenue goal, usually higher than has been achieved in that month, then everyone shares in a very small piece of that revenue. Just make sure that when you share a piece of that revenue that the month is still profitable!

Doing these three simple actions will help you stay profitable and build wealth for years to come.

I wish you a safe and prosperous 2021.

Ruth King is the author of The Courage to be Profitable. For more information, visit ruthkinghvac.com or email rking@ontheribbon.com.

Ruth King

Ruth King is a management consultant and trainer to the plumbing and HVAC industry. To purchase Ruth’s new book, The Courage to be Profitable, visit ruthkinghvac.com.

Categories

Archives