The Power of Business Basics

"I'm 55 years old and I would like to retire in this lifetime! My four kids work in the business, and I am glad that they chose to work with me. However I realized I haven't fully prepared them to take the reins. And, as it stands now, there isn't enough fortune for all four next-generation families unless we grow this business. I knew I needed HELP to get me out from under the burden of this responsibility to a place where we could all win. 

"We use QuickBooks for our accounting. Because it doesn't have Dispatching or Customer Service History features, we added a second accounting program. The second program is supposed to 'export' to QuickBooks. We had it working OK for Sales and Accounts Receivable. When we decided to 'export' our materials and inventory, it really made a mess of our Profit & Loss and Balance Sheet. At that point, I lost faith in the reports. Not good! 

"I've known Ellen for years. We arranged to meet on the phone and go over my financial information. During the call, Ellen praised me for my understanding of financial reports. And she pointed out ways that I could make the reporting simpler. That way, she said, I could help the kids understand it, too. She also promised to 'fix' it so that the financial reports would accurately reflect our financial position. She said the first step was to get the financials cleaned up, so we could move forward with a real 'scorecard.' That would help us make better decisions and make more money. 

"We scheduled a series of phone consulting conferences to get our financials in order. Ellen calls it 'Getting to KFP, Known Financial Position.' On the second phone call, we agreed that it would be easier and we could move faster if Ellen and Gail came to our shop to work with me and the kids, in real time on our accounting system. Ellen calls this the 'Super Nanny' treatment. We applied the price of the phone consulting to the on-site consult, which made it easy to say, 'Come on over!'

"Gail and Ellen arrived for a two-and-a-half day consulting visit. Right out of the gate, we had fun with them. Ellen worked with me and my son Brian assembling our budget and creating company-wide goals. We also created realistic selling prices. This pricing approach will allow us to make money, and pay back the money that I've loaned to the company over the 30 years we've been in business. 

"Gail and Mary got to work fixing the accounting. They worked with my CPA and made sure that the balances on my Balance Sheet made sense. And, they figured out how to import the information from the secondary program so that it worked. Along the way, they wrote down the procedures so that we can do this without their help from here on. 

"It was great getting to KFP. Even better is knowing that my kids have tools that will help them be better business people, better stewards of the family business. What a great feeling! 

"We are now on the same page.  In fact, we use the one-page Financial Quick Check report to learn where we are financially.  The way it's formatted we can compare our actual performance to our budgeted goals and see if we are on track.  We can use this form to confront the score and make sure that we make money every month.  No more 'wait and see' for Andy Stack & Associates.  And no more arguments.  The numbers cut through a lot of the emotion.  We are implementing Scorecards for our Service Techs, too.  This will get them in on the game and provide the basis for productivity-based bonuses.  That's exciting. 

"One of the things I learned working with Ellen and Gail is that I wasn't delgating very effectively to the kids.  I would put them in charge, and then still do it myself.  It's about putting systems in place.  Forms and checklists are the key to delegating and holding people accountable.  It's a better approach than the delegate-abandon-take-over approach I was using before. 

"Our next step:  Get our Operations Manual put together.  Ellen recommended working with Al Levi of Appleseed Business, Inc.  The way Ellen and Al work together is great because they share the same basic approach to business...the simpler you make it the higher you can take it.  We start work with Al in a couple of weeks.  What's cool is that now we know the score, so that we can see the impact of putting sound systems in place."

Ellen adds...

"It was great working with Andy because he had such a good beginning understanding of financials. Also, their shop is sharp...super clean, disciplined and focused.  They do radiant heat and do it better than anyone else in town.  They are all about making their customers comfortable...with their heating systems as well as working with Andy and his team.  It was fun and easy to create positive results with Andy and his family because they have done so much good work already. I was able to help Andy build on his knowledge, fill in the gaps, and empower him to bring the kids in on the game.  And, Andy's kids are smart, fun and willing to do what it takes to be successful.  In a situation like this, we can really make great progress and use the financial information to strategize the company's growth." 

Andy Stack, Andy Stack & Associates, Avon, Ohio