Trainor sure did surprise me, but then again, I live in New Hampshire and have my head buried in a snowbank most of the year. Some of their vendors knew, their gut feel alarms were ringing, but some will fall into the category of "Sure I'll sell them...they are one of the biggest, so I am sure they are good."
The last four years have shown all business people that anyone can go bankrupt. What do you, as a glass shop or a supplier to glass shops do?
Investigate each new customer, even if you have heard about them for years. Ask for credit and bank information. The credit references must be from trade sources. If a building owner, who wants a new storefront, gives you a hardware store and the phone company, look out. You should get references from other service vendors, similar to yourself. If the owner also runs the business, get his/her main merchandise vendors.
Call the bank, asking what their average balance is, and if they have a line of credit, how much is available, and if they have any NSF checks. You may need an authorization from the customer to give to the bank. A simple note from the customer to you, will suffice if you don't have this built in to your credit application.
When a company goes bankrupt, the creditor's committee may 'claw back' payments made to you in the previous 90 days. Complain all you want, you are wasting your time. If you feel someone is on the verge of bankruptcy don't accept new work. Yes, they may survive and remember you as someone who didn't work with them. Or they may sink, and take you with them. Do you want to lose one customer or your business? Easy enough choice.
Listen to the rumors in the trade. Listen to your competitors. Ask delivery drivers where they are now collecting COD. (This is one of the best sources of info!)
I am the guy who is an eternal optimist. I feel the economy is now turning around and everything will come up roses. But, (yes, there is always a 'but'), we are not out of the woods yet. Trainor has proved this. I am not knocking them. They ran a great business for many years and were very well respected members of our glass community. But things happen. Be careful in giving credit; follow up when money is due; stop work and delivery of new materials when promises are not kept and, most of all, don't ignore the little warning bells you keep hearing.
Tuesday, February 28, 2012
Tuesday, February 21, 2012
Hallelujah--Spring Training Is Here!
Anyone who know me knows that this week's blog would be about Spring Training and Glass. In Spring Training all teams are still in first place; all teams will be in the World Series; all players are in contention for the MVP.
Yet, deep down, I know that some teams have a slightly better chance. After all if one team spends more on salaries, shouldn't they be a stronger candidate for winning? Let's look at last year as an example.
The Yankees spent $201.7 million, an average of $6.72 million per man, won 97 games, made the playoffs, but didn't win the big one. Kansas City spent $36.1 million, an average of $1.33 million per man, won 71 games, and didn't make the playoffs.
Another way to look at this is the Yanks spent $2.08 million per win, while KC spent $508 thousand per win; the Yanks spent 4 times what KC did for each win. Yet neither won the big one.
Enough baseball, let's relate this to the glass business. It is not how much you spend, it is how you spend it. How you motivate your people, how you control your expenses and how you manage your business that makes you a winner. Your goal is not to win the World Series of Glass, but to finish with a positive profit and loss statement for the year.
You do this by taking on the jobs you can make money on. Is it better to sit quiet than to take work where you lose money, but stay busy? I say it is better to be quiet than to lose money. You do this by juggling your lineup; using the players on your team that perform when needed. You do this by managing your payroll effectively. You need a star or two who have special skills, but for your everyday players, dependability, reliability and professionalism top the list of characteristics that I look for.
We have another year of uncertainty for the glass business. Since we are at the back end of the building cycle, it may even be a couple of years. Nonetheless, you can manage your business to be a winner. Treat your employees fairly, service your customers to the highest level possible, spend wisely investing in your business where needed and manage your day-to-day expenses wisely. If you don't absolutely need to buy something, don't. And then buy the smallest quantity you can.
Back to baseball...since 2000, twelve World Series have been decided, and nine different teams have won. Even though the big spenders have been the big spenders all along. In fact, the biggest spenders, the Yanks, have only won twice. Before anyone writes me...yes, I know my Mets didn't win any, and they were up there in spending, too. This just proves the point that spending alone isn't the key. It is managing the talent you have for the best results.
No different in glass.
Yet, deep down, I know that some teams have a slightly better chance. After all if one team spends more on salaries, shouldn't they be a stronger candidate for winning? Let's look at last year as an example.
The Yankees spent $201.7 million, an average of $6.72 million per man, won 97 games, made the playoffs, but didn't win the big one. Kansas City spent $36.1 million, an average of $1.33 million per man, won 71 games, and didn't make the playoffs.
Another way to look at this is the Yanks spent $2.08 million per win, while KC spent $508 thousand per win; the Yanks spent 4 times what KC did for each win. Yet neither won the big one.
Enough baseball, let's relate this to the glass business. It is not how much you spend, it is how you spend it. How you motivate your people, how you control your expenses and how you manage your business that makes you a winner. Your goal is not to win the World Series of Glass, but to finish with a positive profit and loss statement for the year.
You do this by taking on the jobs you can make money on. Is it better to sit quiet than to take work where you lose money, but stay busy? I say it is better to be quiet than to lose money. You do this by juggling your lineup; using the players on your team that perform when needed. You do this by managing your payroll effectively. You need a star or two who have special skills, but for your everyday players, dependability, reliability and professionalism top the list of characteristics that I look for.
We have another year of uncertainty for the glass business. Since we are at the back end of the building cycle, it may even be a couple of years. Nonetheless, you can manage your business to be a winner. Treat your employees fairly, service your customers to the highest level possible, spend wisely investing in your business where needed and manage your day-to-day expenses wisely. If you don't absolutely need to buy something, don't. And then buy the smallest quantity you can.
Back to baseball...since 2000, twelve World Series have been decided, and nine different teams have won. Even though the big spenders have been the big spenders all along. In fact, the biggest spenders, the Yanks, have only won twice. Before anyone writes me...yes, I know my Mets didn't win any, and they were up there in spending, too. This just proves the point that spending alone isn't the key. It is managing the talent you have for the best results.
No different in glass.
Tuesday, February 14, 2012
Solving An Important Employee Problem
Customers always complain...mainly with the intention of getting you to lower your pricing. That's not what this column is about. There are complaints even more important than customer's...these are complaints from your employees. If you don't resolve them, they will spread like a cancer and sicken your whole company. Here's the problem:
There are different rules for different people.
This is so simple to avoid. Don't do it. Wasn't that easy? But since you already have done it, how do you react when the disparities come out, and they will. Don't deny them. Explain that at different points in the history of the company you had different policies, and some of the more senior employees have different work or benefits rules.
That actually is OK, as long as you were fair and equal at the time that each employee was hired. You can land in a five foot pool of trouble if your employees see a pattern of discrimination or unfairness based on
Balance your workload evenly among all workers. Assigning overtime to one or two people will breed unhappiness. You can give your best employees more opportunities to earn, but make sure that you have a valid employee review system detailing why one employee deserves greater opportunity than another.
Wait a minute, you say. You have some employees that deserve more because they do more for the business. Actually, I hope you do. But the fair way to reward them is with higher pay, not by creating a convoluted benefits program.
In today's litigious society, if you do something that appears to be unfair, even though it may not be, then you will, at some point, be asked to justify the unfairness. Win or lose, your time and aggravation will make you a loser. Keep all of your employees on the same benefits program and you will have less grief. By the way, that doesn't apply to you as an owner. You can have a different program, giving stronger benefits to yourself and any family if they work for you. If you have one key manager, it's OK to include him/her in the key program, but don't extend it too far down the chain.
If you have side deals with employees, ask yourself what happens when the rest of the employees learn about it. Don't ever believe that it will remain private. If you can't answer the question easily, then work to remove the program. Maybe you have to give a larger raise to someone and eliminate the special program. It will move an expense to the fixed column and raise o/t costs, but this is still better than a potential disuption in the work force.
Keep your employees happy, and you will have happy customers. If you have unhappy employees, for any reason, this will hurt your business more than any recession or competitor.
There are different rules for different people.
This is so simple to avoid. Don't do it. Wasn't that easy? But since you already have done it, how do you react when the disparities come out, and they will. Don't deny them. Explain that at different points in the history of the company you had different policies, and some of the more senior employees have different work or benefits rules.
That actually is OK, as long as you were fair and equal at the time that each employee was hired. You can land in a five foot pool of trouble if your employees see a pattern of discrimination or unfairness based on
- Age
- Religion
- Race
- Gender
- Sexual Orientation
- National Origin
- Disability Status
Balance your workload evenly among all workers. Assigning overtime to one or two people will breed unhappiness. You can give your best employees more opportunities to earn, but make sure that you have a valid employee review system detailing why one employee deserves greater opportunity than another.
Wait a minute, you say. You have some employees that deserve more because they do more for the business. Actually, I hope you do. But the fair way to reward them is with higher pay, not by creating a convoluted benefits program.
In today's litigious society, if you do something that appears to be unfair, even though it may not be, then you will, at some point, be asked to justify the unfairness. Win or lose, your time and aggravation will make you a loser. Keep all of your employees on the same benefits program and you will have less grief. By the way, that doesn't apply to you as an owner. You can have a different program, giving stronger benefits to yourself and any family if they work for you. If you have one key manager, it's OK to include him/her in the key program, but don't extend it too far down the chain.
If you have side deals with employees, ask yourself what happens when the rest of the employees learn about it. Don't ever believe that it will remain private. If you can't answer the question easily, then work to remove the program. Maybe you have to give a larger raise to someone and eliminate the special program. It will move an expense to the fixed column and raise o/t costs, but this is still better than a potential disuption in the work force.
Keep your employees happy, and you will have happy customers. If you have unhappy employees, for any reason, this will hurt your business more than any recession or competitor.
Monday, February 6, 2012
Hot Air In Fitzwilliam, NH
Quit the snickering. Yes, I live in Fitzwilliam, NH and if you ask certain people, there is enough hot air in our house to cook a roast beef. But, those people couldn't possibly be correct. You see, our boiler rolled over and died last week and we were without heat for seven days.
We have steam radiators; the house was built in 1940. The boiler is the heart of the system. A week ago Friday afternoon, it gave up the ghost. We couldn't order a new one until Monday, it was delivered on Wednesday, and took two and half days to install. So, we were a little short on hot air. Fortunately, we have four fireplaces, and three of them have gas burners. We kept warm throughout, holding the house around sixty degrees.
But it made me think about the people without heat, folks who can't afford heating oil at almost $4 a gallon, or have the electricity or gas shut off. The stories on the news are not in some distant land, they are here in the United States. There are so many definitions, but the smallest number places ten million Americans living in poverty, skipping meals, living without heat, and forty million Americans without medical insurance.
Politics be damned. There is no excuse for this in our country. No plan hatched in Washington can feel the chill in the bedroom of a child in the Great Lakes area.
As we go through an election cycle, whatever your point-of-view, think of the children in our country. Think of the children in the world.
We have steam radiators; the house was built in 1940. The boiler is the heart of the system. A week ago Friday afternoon, it gave up the ghost. We couldn't order a new one until Monday, it was delivered on Wednesday, and took two and half days to install. So, we were a little short on hot air. Fortunately, we have four fireplaces, and three of them have gas burners. We kept warm throughout, holding the house around sixty degrees.
But it made me think about the people without heat, folks who can't afford heating oil at almost $4 a gallon, or have the electricity or gas shut off. The stories on the news are not in some distant land, they are here in the United States. There are so many definitions, but the smallest number places ten million Americans living in poverty, skipping meals, living without heat, and forty million Americans without medical insurance.
Politics be damned. There is no excuse for this in our country. No plan hatched in Washington can feel the chill in the bedroom of a child in the Great Lakes area.
As we go through an election cycle, whatever your point-of-view, think of the children in our country. Think of the children in the world.
Subscribe to:
Posts (Atom)
