Auditing Your Own Business
by Tom Hughes and Donovan Trana
For our first column, we chose to answer a commonly asked question:
Question: As an independent auto glass shop owner, what steps or procedures can I implement right away to offset eroding sales and profits?
Tom: I can handle that question, Donovan. It’s simple. The first step is to fire your accountant! (Just kidding!) Actually the first step is recognizing the problem, which goes something like this: If you continue to do what you’ve been doing, you’ll continue to get the results you’ve been getting … only less. Clearly, this downward spiral is not a very healthy cycle for you and your business.
Donovan: No kidding! But you know, Tom, eroding sales and profits are only symptoms of a larger picture, general business failure—something that is nipping at the heels of many glass businesses. Every business carries within itself the seeds of failure and self-destruction. And, as if this isn’t enough, with the pressures created by several large retail players employing self-predator pricing, corrupt third-party billing entities and greedy (or, at best, indifferent) insurance claims managers, there is plenty of fertilizer to feed a business failure.
Tom: So, with all this fertilizer around, where do you step?
Donovan: The owner needs to step up, be honest with himself and ask this question: am I in the right business? Face it, this industry has gone through a lot of changes over the last decade, and that makes this question very important. So, I recommend that you resurrect that person who had the vision and entrepreneurial spirit to start your business. Remember him or her? He can answer that question for you.
Tom: Now, to those of you who answered yes to that question, it’s time to move on to the next step: A complete business and marketing audit including a thorough check-up of your facility, operations and procedures. Here’s how you do it.
Donovan: Visit your shop one day after lunch as a prospective buyer. Imagine and pretend that you’ve never seen the place before. You have no idea what you’re walking into. Ouch—that hurt a little, didn’t it?
Now, you’ll get a better idea of what your customers see and hear!
Tom: Remember, you’re pretending you’re a prospective buyer. Would you buy this business? Is the staff well-cast and trained? Are the lines and scripting edited and well-rehearsed? Looking at your business as a buyer forces you to look at every point of contact with the customer from an impersonal, third-person observer’s viewpoint.
Donovan, remember when you did this last year? I suggested that you take a camcorder with you and make notes.
Donovan: Oh, I remember Tom—a little too well. What an eye opener! I realized that this type of exercise is tough love. You don’t spare anything. Look at everything from the way your employees act and react to each phone call, to how customers are greeted as they walk through the door. You know, the way your facility looks inside and out, and how it functions sends a multitude of messages that could be costing your business thousands.
Tom: What you’ll uncover is the truth about your business—the truth that a perfect stranger would demand before even considering purchasing your business. So why deny yourself the same honesty?
Donovan: Exactly, Tom. A business and marketing audit forces you to look at your shop in the cold light of day, and see it for what it really is—a business—and not just as a place you go to get out of the house for awhile. It will quickly reveal where you’re making money and where you’re losing it.
Tom: And every day you delay is just another day you’re wasting by continuing to get the same results you’ve been getting … only less of them.
Donovan: The positive action you take and at what speed you take it will directly affect just how fast the sales erosion will reverse itself and that elusive thing called profitability can begin to reappear.
Tom: You’re right, Donovan. Let’s make a copy of our Essentials of a Business and Marketing Audit available in this issue for AGRR readers!
Donovan: The Essentials is a list of great questions you should be asking yourself. This list will guide you to make sure that you ask the most important questions when conducting your audit.
If you are interested in a complete business and marketing audit form, simply go to www.clearvisions.org and click the Business and Marketing Audit form button. There’s no charge.
Donovan: This is just like the glass industry ... give it away ... sheesh!
Tom: Get over it, Donovan!
Essentials of a Business
• Annual sales?____________________
• Have you developed a formal business plan? yes no
• Do you have a current organizational chart of your company staff?
• City population? ___________________
Tom Hughes and Donovan Trana are the co-founders of a web-based auto glass consulting company. For more information, the website address is www.clearvisions.org.
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