Aaron York of Aaron York's Quality A/C said Dr. Emil Fails came to Indianapolis in the mid 60s to present an "incredible" course on financial management. York said that while Fails taught his dual overhead application that day, his greatest teaching was done on managing the income of the company. For example, for a business to succeed, the working capital turned 10-1/2 to 11 times per year to create the most profitability.
"If more rapid, you are pushing your customer too hard for payment," said York. "If fewer times, you are allowing them to work too long on your money. This also proves that as you turn your money, even if it is borrowed, say 11 times a year, you can make good profits."
York gave the following example: If a contractor uses $100,000 in working capital and turns it 11 times, he or she is generating a business of $1.1 million a year. At a 10 percent net profit, that becomes $110,000 net during the year on $100,000 dollars. If the owner had to borrow that money and paid 10 percent interest ($10,000), he or she would still be left with $100,000. "That's not so bad for working on borrowed money," York said. "Dr. Fails further taught us the importance of a healthy return on investment of 67 percent. This is much higher than is commonly taught but who can argue with success.
"Money in our businesses is made by competent management. While I have never preferred the dual overhead principle, it is workable and successful. Business managers who learn to read their financial statements like a good book will become much more successful. Dr. Fails was one of the best instructors I have ever heard. His manuals are still used and treasured."
For Dave Dombrowski of Metro Services/ARS-ServiceMaster, the most critical business training involves ethics. He said it has the greatest impact on the success of a business.
"It is critical that the advice given by the service staff is based not on the ability to sell but upon the concept of providing a professional, honest solution to the customer's problem," Dombrowski said. "Honesty, integrity, and professionalism must be core values of the business and communicated to the technicians and the customers.
"In addition, the business must live the values and base their operating decisions on what is right and not just on will it produce a profit. When you have this message as the culture of the company, the rest of the items are operational details."
Jim Hussey of Marina Mechanical cites safety training as the most important module for his employees. He said it has a huge impact on company profitability. "By reducing or eliminating accidents we reduce lost and nonproductive time," said Hussey. "And the impact on reducing our workers compensation premium is immense.
"Most important is the impact on our crew. Skilled technicians are hard to find and hard to keep. We certainly do not want to lose them to accident or injury, and demonstrating by our actions that their safety is important to us tells them they are important to us, an important message to circulate amongst our crew and our marketplace."
Arthur Pickett of Royal Air Systems Inc. said that attitude can go a long way to solving any customer problem.
"We feel that customer service training is the primary course," he said. "The poorest service tech will still make a good impression if he knows how to communicate with the customer."
Pickett said that good intra-company service is important, too. "The girl that answers the phone to the service tech in the field plays a vital role," he said.
Hank Bloom of Environmental Conditioning Systems agreed with Pickett's emphasis on customer service.
"Sometimes we seem to forget how important customer service is," Bloom said. "That's why we have a person come in every year and go over this with our employees."
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Publication date: 06/12/2006