This is part three in a three-part series. Click here to read parts one and two.
During his presentation at this year’s Gulf States Horticultural Expo held in Mobile, Alabama, Tom Grandy, founder of Grandy and Associates, discussed 15 aspects he’s noticed all successful companies have in common.
This week, we’ve discussed the first ten points and today we will finish off with the last five.
Develop and use an internal collections policy
Grandy says a company’s internal collections policy should be a written policy and should include a stated time for invoicing to take place. He recommends this happening either the same day or at least within 24 hours of a project being completed.
If you find you are having difficulty collecting payments with commercial customers, Grandy says calling and talking to the secretary before attempting to contact the owner will more than likely yield your desired results.
According to Grandy, this initial phone call will help you receive payment 70 percent faster than emailing or mailing reminders to the customer. Be sure to keep everything documented and always make sure you receive confirmation from them on a payment date.
If you still do not receive payment after the first call, Grandy says to call a second time and speak with the owner or manager. If this doesn’t work, he recommends turning the customer over to either a collections agency or a lawyer.
“Based on the time value of money, after 30 days, my dollar is only worth 97 cents,” he says. “After 60 days, it’s only worth 90 cents. If I don’t get my money within the first 30-60 days, I’ve lost my profit, and I’m getting into the cost of the job itself.”
Customer response cards
Grandy says in society nowadays, the regular use of response cards is critical if you want to get feedback from the field.
Even if it’s the size of a simple index card, Grandy says these cards should allow customers to leave feedback on the quality of work in the field, a space for positive comments and space for any referrals for additional sales.
Line of credit
Grandy notes that having a line of credit is absolutely critical in your company, but he does warn that it only needs to be used for its intended purpose, which he says is for short-term borrowing against receivables.
Grandy says the temptation can be to sometimes borrow money for pieces of equipment that you don’t plan on immediately paying back. While you may have a good relationship with your banker and feel there’s no need to fear if you’ve got this credit hanging over your head, Grandy says the trouble can come if/when your bank gets bought out.
“When a new bank takes over an existing bank, guess who the first group of customers is that they look at?” Grandy asks. “Everybody with a line of credit.”
These new banks could potentially make you pay the entire amount in full, which could leave you up the creek without a paddle, as Grandy says all lines of credit have a line in their contract stating the payment is, “due upon request.”
Have formal and active customer service training programs
Your landscaping company can only continue to thrive and grow with the support of loyal and faithful customers. How, then, do you ensure that your company is able to consistently offer excellent customer service?
According to Grandy, providing formal and active customer service training programs is imperative in any landscaping business. While there will be times you disagree with your customers, Grandy says to always handle these circumstances gently and with dignity.
“Don’t tick off your customer over an $85 service call,” he says. “Think of the cash flow you’re going to lose in that process.”
It’s true, Grandy says, that you may end up having to let a customer go at some point, but he recommends always parting on good terms if at all possible.
When it comes to keeping in touch with your customers, Grandy says you should be calling your customers at least one to two days after a job to make sure they are still happy with the work you’ve done.
He also says not to be afraid to offer gift cards, discounts or other similar specials as a thank you to customers who have spent a large amount of money with you, but, he warns, once you begin this process, do not stop.
Always work to ensure your customers put their best attitude forward when interacting with customers, as Grandy says 80 percent of customers who stop business with you don’t stop because they didn’t like your quality of service but because an employee had a poor attitude.
A few more things
To wrap up his presentation, Grandy says there are just a few more extra things to keep in mind when striving to be a successful company.
He recommends always getting a deposit on every single job you do, as having a check upfront will allow you to have the cash flow to pay suppliers on time and handle that money properly. He also adds that if you have that deposit and the customer decides to go somewhere else for service, you will know about it because they won’t want to leave their deposit behind.
Grandy also recommends providing vacation time and holidays to employees, as well as having an employee handbook to help them when they begin training for their position and learning the company culture.
Lastly, Grandy recommends job costing every single job, even if it’s for a friend, relative or a relatively inexpensive job.