By - January 10, 2022
Categories: General
Last year was interesting. And with the way things are heading, it’s already shaping up to be a challenging year going forward. But that doesn’t mean it’s impossible to get through. It does mean that you will need to address problems sooner than later.
Here are the top three problems we are seeing both in the people we are helping and the market at large.
Inflation
The inflation in 2021 was record-setting. But unfortunately, it didn’t stop at 5 %. The current inflation rate stands closer to 7%. With the increase in inflation, our clients and businesses in the industries we are helping are seeing intense sticker shock. Parts cost more than ever and simply passing the cost on to the customer sometimes ends up in lost revenue.
We aren’t recommending sweeping price increases for our clients. We understand that prices will have to go up, but there are ways to increase your prices strategically so that your customers don’t get sticker shock, or at least as much sticker shock.
Employee Issues
I’m sure you’ve heard someone you know say that finding workers right now is hard. And for industries like the automotive repair industry finding qualified workers is getting even more challenging. And even if you find someone who can do the work, ensuring that you don’t lose that employee to a competitor is almost impossible.
One of the key things we have helped some of our clients realize is that your employees are people you partner with to take care of your customers. You need to partner with employees that you trust and treat them fairly so they don’t want to go to another place where they might not fit in. One of the ways we have seen our clients succeed on the compensation side of the issue is to offer salary or hourly work with commissions for work they bring into the shop. If a mechanic convinces someone he knows to use the shop for the work they need done, then the mechanic will receive commission on that work. This helps teams feel more valued and incentivizes them to look for people to bring in.
Company Culture
While employee issues and company culture seem like secondary issues, there are few things that impact the bottom line more than these. A company that does not have enough workers will not be able to handle the workload that will make a company profitable. A company where the workers don’t trust management and vice versa will not be able to work together and will end up focusing on themselves and not the customers, which will cost the company customers.
Far too often we have seen companies with a “do it my way” mentality develop problems with ordering parts they need and even getting the work done. It’s hard to motivate employees if you don’t trust them and they don’t trust you.
If you want a positive company culture, and your company to be successful, you should develop leaders who don’t obsess over “done my way” but rather “done correctly.” And you can use bonuses and other strategies to help motivate them positively.
Making Sense of It
Why is a bookkeeper talking about these issues? Because they affect and are affected by the bottom line. And because our goal at Three Rivers Bookkeeping is to help our clients grow profitable businesses that enable them to do more of what they love doing. And there are a variety of ways to implement solutions that fit your financial goals. If you would like to discuss those solutions, we are only a phone call away.
