By Dick Glass, CET
In this first part of the Service Management Seminar series, Dick Glass has these two goals: He will reveal the plan that can make you prosperous, and inspire you to start the "$30,000-Per-Year SUCCESS PLAN": then he'll tell you the various subjects to be covered in future months, as the success plan unfolds.
[Dick Glass is well known to electronic technicians because of his many years as executive vice president for NEA and NESDA. He helped develop (and often instructed in) the Profitable Service Management seminars, and has written several books for Howard W. Sams, including "Service Shop Management Guide." Dick now has his own management consulting firm and invites calls from servicers who have specific problems. (Dick Glass & Associates, 7046 Doris Drive, Indianapolis, Indiana 46224; phone 317-241-7783.) ]
You Can Earn $30,000 Per Year!
Do you know that some electronic technicians are making more than $25,000 annually? That's true, and not all of them are shop owners who profit from parts sales and their employees. Several barely squeaked through high school, so a college degree is not the reason for their successes.
On the other hand, most service technicians earn far less than $15,000 per year. Why do they earn less than men in other trades that require little skill or knowledge? After working personally with electronic service dealers in all areas of the country, I believe that low profits for dealers and low wages for technicians are two wrongs which POSITIVELY can be corrected! If you're a competent technician, or a shop owner who employs efficient technicians, you CAN make an above-average wage or income. In fact, you can become RICH! There are few other businesses today where competition is so limited, and the opportunities for profit are so certain. Some of your fellow service dealers already have accumulated personal wealth in the hundreds of thousands, and several are millionaires.
Perhaps you feel that such good fortune could not possibly happen to you, especially if you've just written checks for the skyrocketing costs that plague your business.
When you are faced with excessive re-calls (where you are trapped into giving away both parts and labor costs), and your techs are stymied completely by several impossible-to locate repair problems, large profits seem like an impossible dream.But, if that accurately describes your business today, don't give up.
The majority of your fellow servicers' businesses can be described the same way. These problems are universal.
Starting The SUCCESS PLAN
Your "$30,000-A-Year SUCCESS PLAN" might require more than a year to complete. After all, we can't give you all the secrets in this first article, and each step does require time. So, it's possible you might fall a bit short of the goal the first year.
The Plan makes such allowances, and it's far better (as we shall see) to accomplish part of the goal, than to do nothing.
Suppose you set a goal of $30,000. "Impossible," you say? No, the following simple mathematics proves it to be possible.
First, if you are to be paid $30,000 for one year's work as an employed service technician, you should be entitled to a larger-than usual percentage of the total labor income you produce. That's because you will be bringing in "more-efficient" dollars. The shop's fixed expenses (mostly overhead) are the same whether you bring in $10 an hour or $50 per hour. So, if you generate more than the average gross income, you should be en titled to about 50% of the labor income (probably the industry average is 40% at this time). For example, if you average $30 per hour in billed labor charges, you could be paid at a $15 per hour rate.
Can you produce that much? If you were to work for a 50% commission, you would need to bill $60,000 of labor in a year's time (perhaps next year?). Is that possible? Here is the mathematics:
• $60,000 divided by 52 weeks equals $1,154 per week.
• $1,154 divided by 40 hours equals $28.75 per hour for a 40-hour week.
• $1,154 divided by 48 hours equals $24 per hour for a 48-hour week.
Now, that's a lot of repair work!
Actually, most techs today don't produce even $30,000 worth of labor in a year. Nevertheless, it IS possible. For the past nine years, I rarely ever saw the inside of a TV receiver, yet during a test period I produced the equivalent of more than $30,000 of labor per year.
Tailor your goal
Suppose this year you don't quite make your goal. If you are certain you can't make the goal, then set it lower than $30,000. On the other hand, if you are a shop owner with several employees, you might want to set the goal higher, perhaps at $32,000 or more.
Total Commitment
Whether or not you reach your goal depends on how much you want to do it. Nothing less than total commitment will do. Therefore, make your decision.
Do you only want to make a little more money? Or, do you want to increase your income greatly, and even eventually become rich? If the latter, you must carefully follow these steps:
Step #1 You want to be wealthy, and are willing to work hard at it.
Step #2 Set a realistic dollar goal.
If you now are making $12,000 per year ($230 per week), perhaps $30,000 is too high for this first year. Set it at a realistic point, such as $18,000. Write it in your personal file, "1978 goal is $18,000" and date it. Also, carry this goal in your billfold or note book at all times, where you will be reminded of your singleness of purpose toward the goal.
Don't let the fear of failure stop you. Because people fear failure, lovely paintings are not begun, wild ducks are not hunted, useful hooked rugs never are started, beautiful mountains are not seen, and fortunes are not earned. You'll never know how many botched pictures were thrown out by a be ginning photographer before he could make the artistic ones shown in displays or published in magazines. So, don't be afraid to set your personal goal this year. Look at it this way: If you set your goal for $25,000 annually, and actually increased your previous $15,000 to "only" $21,000, you have gained $6,000 by having a goal. That's not bad.
Step #3 What price will you pay?
You must decide what you are willing to "pay" for a higher in come. Would you rather take long breaks, visit with your friends, dazzle the customers with long discourses about technical developments, and take every opportunity to skip your work? If so, you won't reach your goal.
If you want more income and are willing to work hard for it, you'll begin coming in early to the store, and even work late some evenings.
These are a few of the things you should do to make progress toward your goal, and you will find the work won't be drudgery any longer; it will be a pleasure because you have a goal that you can reach. But, you must vow to give it a 100% effort; nothing less will do.
Step #4 Keep the faith.
Lack of confidence is responsible for servicers having the low income and poor working conditions that they have endured for years. Think about your knowledge compared to that needed for other trades. As a service technician, your abilities rank near the very pinnacle of human talents and intelligence. It's very difficult to learn everything about electronic technology. The job of servicing home-entertainment electronic products requires unusual dexterity, strength, and knowledge.
You have an extensive mental list of unique methods and "fixes," plus valuable shortcuts for effective troubleshooting. Few craftsmen in other industries possess even a small percentage of the wide ranging experience, training, and knowledge that you take for granted in electronics. You regularly solve electronic mysteries that would baffle Sherlock Holmes, and you diagnose conditions that are as complex as those faced by medical doctors. Of course, sometimes you don't locate the bad part or condition immediately. Nevertheless, you often accomplish the impossible. Compare your abilities and your income against those of others.
You are a technical genius, so keep the faith.
Step #5 Be persistent.
You must persist, and not work erratically at your SUCCESS PLAN, for only complete commitment will be effective. Obstacles will arise, and other people probably will try to slow you or change your direction. Therefore, you should be firm and resolute, and even stubborn or obstinate.
Keep your goal in mind, but realize that the first efforts and changes will seem almost futile. It's only after you have been persistent and have overcome the obstacles one at a time, that the results will begin.
In many projects, including this one, persistence is of more value than genius, intelligence, know ledge, or talent.
Start The Plan NOW
Don't delay the start of your SUCCESS PLAN any longer; today is the only time you ever will do it.
Write $30,000 on a piece of paper, and think about it for a few hours.
Later in the day, after mentally arguing with yourself, write on that paper your goal for the next year. After you have established the goal, read this entire article again.
Remember, you are the only one who will have the guts and persistence to see this project through to completion. If you become con fused or have questions, call or write me (phone number and address listed elsewhere in the article). Meanwhile, we'll present more management information each month.
Future Months:
Next month, we'll show you how to measure your productivity, and how to figure the productivity of your technicians. This is vital to your SUCCESS PLAN, yet few servicers know how to do it.
Later, we will take the mystery out of Balance Sheets, and make easy work of reading and under standing your Profit-And-Loss Statement. Also, we'll help you determine whether or not you can afford certain types of test equipment, tools, and other service aids.
In order to properly make wise decisions, you need to know much about your competitors, and whether they are a real threat to you, or are of no importance. We will ask and answer the extent of the service work that's available.
Good "customer relations" and "employee relations" are vital to the financial health of any business, particularly in our industry where direct contact is essential. I'll try to help you understand the problems that are common to all servicers, and tell you how the successful managers overcome them.
A valid pricing system is imperative to convince your customers that your prices are fair and honest, so we'll explain and compare various systems.
Other subjects should include: Breakeven Calculation; Bookkeeping Procedures; Return On Investment; Technician Training; Service Data; Generating More Repair Business, and Solving Parts Problems.
This general principle will be behind every subject: You desperately need to identify each problem, and then solve it, before going on to the next one. Unless you can see the problems, or have a way of identifying them, you will fail in your business. But, if you follow the SUCCESS PLAN, we expect you to succeed and become prosperous.
Steps of the SUCCESS PLAN
You must hunger for success.
You must set a goal in dollars.
Are you willing to pay the price? Recognize your valuable abilities.
Work constantly toward the GOAL.
(adapted from: Electronic Servicing magazine, Jan. 1978)
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