uncovering your disadvantage dollar part one
TRANSCRIPT
Uncovering YourDisadvantage
DollarPart One
Do you need to uncover thedisadvantage dollar in your
business?
http://nextlevelup.com.au/
Most business owners are not aware of the places their businesses are‘leaking’ money. Sometimes real, sometimes in other forms such as lost ormissed opportunities, inefficient use of time and other resources and ongoingfrustrations that seem constant. More often than not, these frustrations are dismissed with a shrug as ‘just a part of running a business’. Until the day you decide to measure what it is actually costing you.
The good news is that once you look into these you can generally uncover the cause, and the higher the cost to you or the business, the sooner you want to address it. In almost every case of when a business is leaking money, it will be because of a missing system.
Bettersoonerrather than later
So, what is your disadvantage dollar?It’s the money your business ismissing out on through all sorts ofchannels and avenues. Sometimes it’sthings that are costing your businessmoney. I’m going to give you threeexamples. One is about staff time andapproach to work, one is about missedquotes (missed business), and one isabout mistakes made too often thatare causing stress or overtime on thepart of the owner and causing him/herto miss out on things like valuablefamily time. (I will share the anexample with you this part and thesecond and third next in part two.)
In each case, the business owner really wasn’t paying too much heedto the issue, thinking thateither it was too minor tomention, or simply a factof running a businessand it was unsolvable.And in each case, whenthey sat down andmeasured, or quantifiedit, and put a dollaramount against thefrustration, they got ashock. Which thencaused them to move the issue right up to the top of the tree to the toppriority to be addressed. These are all examples brought to me byreallife clients who I’m happy to say have now solved these problems.
The first one was from abuilder whose frustrationwas that his team was takingtoo long on breaks. Thebreaks were sort of sneakingover each time and itseemed too trivial to bringup. We sat down and lookedat it and broke it down.
So, there were five guys on the site and each break was going about 15 minutesover, twice a day. We worked that out and over a day it was 150 minutes, whichis 2.5 hours. Multiply that by 5 days a week = 12.5 hours a week, 52 weeks ayear = 650 hours, or 16 1/4 weeks. Ouch! At an average site wage, that wasabout 13.5 thousand.
Even in one week, 12.5 hours in aweek would have made a difference tothe job they were working on. Plus,jobs would be completed faster andallow the team to get on to other jobs.He was missing out on dollars theretoo. He didn’t even include the missedopportunity cost. All he costed waswhat it was costing him…those extraminutes…15 minutes per person perbreak twice a day.Just imagine what a difference of 12.5
hours of work a week (a day and a half)would have made to the business’sefficiency and profitability. Imagine howmuch time that would have taken off thebuild. A day and a half, a week, taken offthe build would have been quite significant,or that 13.5 thousand would have gone along way to putting on an apprentice overthat time, which in turn would have led togreater productivity. Greater productivitywould have led to greater profitability,happy client, happy builder.
We looked at how that was to be addressed and it was addressed in a way thatreally pleased and suited everyone with a very happy outcome.
Join me in Part Two, when I share the second and third examples ofbusinesses I’ve worked with to uncover their disadvantage dollar.
Until next time...