Calling upon his more than 40 years of industry experience, Lyle Hill, managing director of Keytech North America, offered a fast-paced overview on Friday during Auto Glass Week™ highlighting the financial principals essential for any manager or owner attempting to run a successful business.
Keytech North America provides research and technical services for the automotive and architectural glass industries. Hill has experience owning an AGRR chain in the early 2000s, and nearly 20 years before that, he worked for Joe Kellman of Globe Glass. He serves as a columnist for AGRR™ magazine.
Sales and Marketing
“Nothing happens until somebody sells something. What should sales and marketing costs be?” he asked attendees.
This includes all advertising, as well as hockey and football tickets a company gives out. Attendee responses ranged from 5 to 35 percent.
“Are commission sales people better than salaried ones?” he also asked.
When it comes to which is the better choice, it all depends on the business.
“The commission person works for themselves … less for the company and more for themselves,” he explained.
Having inside sales representatives isn’t always the best avenue to take.
When is it time to raise a company’s prices?
“Every chance you get,” though he allowed that, “if I’m slow, maybe it’s not a good time to raise prices.”
Hill also recommended mystery shopping the competition.
“You can outfox them sometimes,” he said. “Maybe your competitor is just a sharper guy. Try to figure out what he is doing that you are not doing. I worked for one of toughest competitors who ever lived. He had a guy in the summer that would follow auto glass guys. … You can learn a lot from your competitor.”
If a customer calls in for a price quote and you don’t hear from them again, Hill recommends calling them back.
“Call a customer to find out how much they spent,” he recommends. “Ask, by the way, could you tell me what you paid for it?”
Perhaps the company can’t beat that price, but offer to match it, Hill added.
Keeping the Good Technicians
How do you attract, retain and keep good people?
“I think there has to be some basic entry level understanding of what you expect,” said Hill. “I would tell them this is what we expect and this is what we average without redoes.”
This needs to take up more of a manager’s time than it probably already does, he explained.
“Bad employees are toxic. They bring everyone one else down,” Hill pointed out.
Each company should have a standard and then measure performance against it.
“How do I know what book keeper should be doing every day?” he asked. “It’s hard to measure those jobs … whenever you can you have to measure productivity. You must constantly look for better ways of doing things. What’s new and what will make us better?”
Today’s businesses are run by people who have accounting or financial backgrounds.
“The world has changed … it’s all about the numbers and accountants who understand the significance of numbers,” Hill explained. “They get the numbers side of it. There is a significant disadvantage if you don’t. You must have some basic understanding of financial principals.”
To be prepared, he recommends:
- Being able to read and understand profit and loss statements.
- Being able to understand a balance sheet. What does it mean and why did it change?
- Being able to develop realistic budgets.
“You must be able to make your business a solid operation,” he said.
“The most important things in business are margin, margin and margin,” said Hill.
Excel is a wonderful tool for business owners and managers, he pointed out.
If a company has a lot of inventory, then that is money, he said. Same goes for receivables.
“If you don’t practice and make a commitment to it and try … how do you know if you can?” Hill asked. “You have got to know the numbers. If you don’t already know how to play with the numbers then you have got to learn.”