Seattle — Economist Brian Beaulieu told service business owners and managers that the economic crisis we're seeing now will get worse before it gets better and offered solid strategies for weathering the storm. Beaulieu spoke at the most recent Super Meeting held by business-development and best-practices group Nexstar.
For several years, Beaulieu has been predicting a worldwide recession will begin next year and run through 2010.
“We will hit bottom about the first quarter of 2010,” Beaulieu said. “Home prices will keep going down and unemployment will keep going up until then. Inflation of the 60s and 70s is what we have to look forward to. However, it won't be any worse than what we saw in the early 80's.”
Beaulieu is a trusted source for economic forecasting. He's an economist with the Institute for Trend Research, and his predictions are accurate 96% of the time. Business owners around the world rely on Beaulieu's forecasts to help them decide when to buy and sell or when to hire or hold steady.
“We know Brian's excellent reputation for business cycle trend analysis and appreciate how he turns that information into solid, practical advice for our members,” said Greg Niemi, Nexstar president and CEO.
Beaulieu told Nexstar members there will be unintended consequences of the bailout, so it's important to follow these strategies to secure their companies' futures:
Operate lean and mean/productive.
Go into cash conservation mode to assure good cash flow.
Know your banker and your banking institution.
Don't be a bank for customers — collect receivables.
Marketing must be quantifiable because people want assurance and reassurance.
Be tangible in your messages, such as: “We're on-time and on-budget 98% of the time.”
Beaulieu has been consulting and advising companies throughout the U.S., Europe and Japan on how to plan for, and prosper through, the changing business cycles with all their ramifications on capital resource needs, interest rates, staffing and competition.
Keep your house in order
Also at Nexstar's Super Meeting, Michael Gerber, author of “The E-Myth” encouraged members not to worry about the economy, but rather say to themselves, “If I'm going to transform my world, I'm going to do it here on Main Street, not on Wall Street. It happens where I am. It doesn't happen where I'm not.”
Gerber told members, “there is no reason for any company to be unsuccessful. Let go of the past, and begin to pursue the impossible.”
The E-Myth or Entrepreneurial Myth, is the flawed assumption that people who are experts in a certain skill will also understand how to run a successful business that provides their product or service. From an E-Myth point of view, small business owners struggle to achieve success because they're working in their businesses when they need to be working on them. Gerber said great ideas and talented people go down in what he calls “the tyranny of routine.” Eventually, they realize that just as they invested time in their area of expertise, they'll also need to devote time to achieve business development and management skills.
Nancy Riley, Nexstar member and owner of Riley Plumbing & Heating Inc. in Kensington, Conn., said Gerber inspired her.
“When I return to my office on Monday, I'm going to move my desk from its central location in the office to an outside office with a door,” Riley said. “By removing myself physically, I will stop being the ‘go-to person’ and free myself up emotionally to start dreaming and visioning for the business.”
Dennis Hamon, owner of Gene Johnson Plumbing in Seattle, said he'll also take Gerber's advice to heart.
“I'm going to work towards moving out of the business so it can grow,” Hamon said. “I owe it to my company so my employees have a future.”
“We were thrilled to bring Michael Gerber to Seattle to speak with our members,” said Niemi. “And from the feedback I received, his advice is already having an impact. Owners and managers are discussing how to implement Gerber's strategies within their businesses.”
Best of the best
Also at the meeting, Louisiana-based Stuart Services has been selected as the highest achiever in the Nexstar Select Service recognition program, receiving Best of the Best, the Nexstar Select Service Award of Excellence.
The Nexstar Select Service program was created in 2004 as a recognizable symbol of service providers who deliver a superior level of business. Each Nexstar member applicant is surveyed annually and judged on three pillars of success in the service industry: superior customer satisfaction, excellent working environment for employees, profitability and financial well-being.
Stuart Services started in the electrical trade in 1956. It later added HVAC, and this year, brought in plumbing for a full-service offering. It's based in Metairie, a suburb of New Orleans, a city hit by Hurricanes Gustav and Ike this year while not yet fully recovered from Katrina in 2005. Despite these unpredictable challenges, Stuart's attention to high standards of service and operation helped them weather the storm. The contractor focused on the changing demands in the marketplace while also staying focused on the key components of their business.
“Katrina taught me to expect the unexpected and appreciate my core group of loyal employees,” said business owner Jude “Jay” Raspino Jr.
Raspino also knows it's important to appreciate the customers and serve them by following the golden rule.
“Treat your customers as you would like to be treated,” said Raspino. “Pay attention to details, focus on customer service and operate with high ethical standards.”
Raspino leads by example and holds himself and his employees accountable. He says another key to his success is practicing Open Book management.
The Open Book belief is that if you share information with employees, they'll understand the importance of their job and take ownership in performing to the best of their ability. Steady communication of how the company is performing is a key element in this management technique. It's working for Stuart Services, which is now a $3.6 million business that enjoys a comfortable profit margin.
Niemi said Stuart exemplifies Nexstar's commitment to business development and best practices in the industry.
“We are proud to have Stuart Services as a member of Nexstar,” Niemi said. “They consistently make the Nexstar Select Service list. Six for six. Now, our number one.”
Nexstar Inc. is a business-development and best practices organization delivering comprehensive business training, systems and support to independent home service providers. More than 400 plumbing, electrical and HVAC contractors comprise Nexstar.
The Nexstar Super Meeting is an annual event where contractor owners and managers take a break from working in their businesses and explore where they want to take them.