NASE News

Productivity 2.0

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Productivity Carries New Meaning For NASE Members

By Jan Norman

Micro-business owners love to be productive. The ability to work hard and reap the full reward for the effort is the reason many NASE Members started their own businesses in the first place.

During good times, when micro-business owners are firing on all cylinders with more work than time, improving productivity means choosing the most profitable products or services. It means keeping the best clients and ending relationships with customers who are too demanding. And it means finding ways to complete tasks and projects faster to increase profitability.

That’s during the good times.

In the not-so-good economic times, things are different. And that’s what many micro-business owners are experiencing right now.

In these times, the cylinders are misfiring. In many businesses, products or services are barely profitable, and too few customers—demanding or otherwise—are available to fill the hours the owner needs to work just to meet the bills.

“What you have to remember is that productivity has always been very cyclical. When the economy sags, productivity sags,” says Princeton University economist Alan Blinder.

The challenge right now for many micro-business owners is very different than it’s been in the past. Instead of finding ways to work more efficiently, the task at hand is regaining enough work to fill the workday.

The bottom line? NASE Members say that productivity has taken on a new meaning in today’s economy.

Create Value

NASE Member Robert Harvey, owner of RH Services Property Maintenance in Boothwyn, Pa., recently lost his biggest client. So after more than 17 years in business, productivity improvement for him means finding new clients to replace the lost work.

“I’ve had this happen before; a large client goes in a different direction,” Harvey says. “So I’m confident we can recover.”

He is using a two-prong strategy.

RH Services has specialized in commercial, retail and restaurant clients. Now Harvey is broadening his search to owners of residential projects. Second, he has hired a full-time salesman to knock on doors, which should bring in more business while freeing up time for Harvey to cultivate relationships with company decision-makers.

“The property maintenance business is all about relationship building,” he says. “As clients expand, they bring us onboard for more work based on the quality of the work we have done for them in the past.”

Years ago, Harvey contacted a fast-growing retailer and started completing construction cleanup at
its new stores. That work led to a steady stream of contracts to handle a variety of ongoing property maintenance.

Times have changed. Currently, he will accept work for odd hours, such as 7 p.m. to 2 a.m., to keep his employees busy and get a foot in the door with other companies that might replace the work RH Services recently lost.

Whether starting a new venture or rebuilding an existing one, productivity, at its most fundamental, equals value divided by time, explains personal development author and blogger Steve Pavlina. To increase productivity, you must either increase the value you create or decrease the time you spend to create that value, he says.

Right now, Harvey is creating value by finding new clients. He hopes that effort will pay off so that he can decrease the time he spends finding new work and devote more of his time to increasing his company’s value to good paying clients.

Plan First

Such productivity improvements require planning, continuous improvement and smart use of technology, say the experts.

A good place to start is defining what productivity means for your specific business, which will be different for different firms.

California consultant, speaker and author Jason Jennings studied more than 4,000 companies worldwide to find the most outstanding examples of productivity. He discovered that the most productive companies had a simple, big objective that everyone in the organization understood.

He describes some of these companies in his book “Less Is More: How Great Companies Use Productivity as a Competitive Tool in Business” (Portfolio, 2002). These companies, Jennings says, identified the factors that could improve productivity and measured them constantly. And for every potential action or project, they asked, “What’s the good business reason for doing this?”

An owner of even the smallest business can take those same actions to build greater productivity.

NASE Member Richard Fowler, for example, questioned why he accepted insurance payment for clients at his Prestonwood Counseling Center in Dallas, Texas.

“I found insurance companies were waiting months and months to respond [to invoices] and then they said ‘you didn’t fill out the papers right.’ The [accounts receivable] were tremendous.”

So instead of insurance payments, Fowler switched to a sliding scale of fees according to clients’ income.

The result? Fowler actually increased his revenues and served his clients better in the process.

“I’ve tried all sorts of productivity improvements, but the best is being a good counselor. Eighty-five percent of new clients are referrals,” says Fowler.

Use Technology Wisely

Many makers of software, smartphones and computers market their products and services as great productivity enhancers.

But NASE Member Robert Rogers urges caution and research before spending on technology. Otherwise, you could end up with an expensive toy rather than a productivity tool.

Rogers knows firsthand what he’s talking about. He owns UpSurf.net, a computer repair and website building service in York, Maine.

“Technology is my business, but even I know all technology isn’t for everyone,” he says. “In these tough times, I have been using my computers and software as long as possible, staying away from impulsive buying because advertisements promise to help my business.

“When I do spend money on technology, I research it until I know everything there is to know, figure how long before I get my return back from this purchase and where this return will be coming from,” he explains.

One technology purchase that paid off for Rogers was a software system to process invoices, track sales and manage customer information. The time he saves, plus the information he collects that can help his marketing, “make this expense well worth it,” he says.

Fowler says his counseling center also started using technology to make the practice more efficient and to save money.

At the center, each counselor has his or her own independent practice, but they share office expenses. They eliminated a secretary, and each now uses software programs to perform scheduling, billing, recordkeeping and client maintenance, Fowler explains.

Know What Works

Maximizing productivity is not a one-size-fits-all process.

That’s why micro-business owners are likely to try things they expect to improve productivity and discard what fails to produce desired results.

Property maintenance contractor Harvey says he learned that discount offers and newspaper advertising doesn’t save him time or bring in more business.

“In the commercial field, those things don’t reach the owners we need,” he says.

Fowler says he found that advertising in the Yellow Pages was unproductive for his counseling practice.

But, teaching seminars was a double dose of productivity. He earned money by conducting the seminars, and they brought in more clients.

Rogers says that mass email marketing campaigns to strangers proved unproductive for his technology firm. The biggest productivity producer has been sending special offers to people who know him or have done business with him before.

“Using a very inexpensive, online emailing system has created a great deal of word-of-mouth referrals for my business,” he says.

Some productivity builders don’t work all the time, Rogers adds.

In the past, he tried hiring part-time technicians and office managers with the idea that the more staff he had as  a resource, the more he would be able to accomplish in a day.

But, the time and effort it took for training proved to be a big downside.

Currently, his is a one-person business that uses outside contractors and occasional college students who he
can bring into the office a few hours a week to help with paperwork.

Continue To Improve

Often, the concept of making a micro-business more productive can seem overwhelming, especially in a
slow economic recovery. But it doesn’t have to be accomplished overnight.

Consultant Debbie Gilster, head of the California-based Center for Productivity, says, “Most people don’t get organized because it’s an overwhelming process.

So take one major thing you want to change and do that. Don’t do a list of 15 or 20 things.”

1. Ask The Experts
   The professional Business Strategy Experts give NASE Members confidential and convenient online service. Turn to the specialists when you need:
   
   • Answers to productivity questions
   • Advice for moving your business forward
   • Tips to make changes happen more easily
     
     NASE Members have unlimited access to the small-business experts. And the cost is included in your NASE Membership
2. NASE Growth Grants™
   Need to invest in new technology to boost productivity at your micro-business? Want to replace ineffective advertising with a more productive online marketing campaign?
   
   An NASE Growth Grant™ could provide the funds you need. The $5,000 grants are designed to help you meet a specific business need. To be eligible for an NASE grant, you must be an NASE Member in good standing and meet other eligibility requirements.
   
   You can find out more and apply for an NASE Growth Grant™ online.
   
   NASE Growth Grants are awarded at the sole discretion of the NASE. Unfortunately, not everyone who applies will receive a grant. Decisions of the selection committee are final and are not subject to appeal. No application feedback will be given.