New York Yankee great Yogi Berra had a knack for making funny and ambiguous statements. He'd say things such as, "It’s like déjà vu all over again," and "When you come to a fork in the road, take it."

When taking a road trip, you will encounter twists, turns and forks in the road. It means you need to know where you are going and how to get there. Without a destination, you would not know which way to go or why you were going in the first place. Once you have chosen the destination of your trip, you must map out the route that will get you there in a safe and expeditious manner.

In the old days, you would have stopped by a gas station and picked up a roadmap. After mapping your route and starting on your journey, you might encounter unfamiliarity with the landscape as you travel and become confused. In which case, you might stop a stranger and ask for directions. 

In today's world, technology allows you to turn to your GPS to guide you on your way. But even then, directions might be vague and asking a stranger might be necessary.

Either way, one thing is certain. You need correct, detailed directions that you must follow to get where you want to go. If you ask strangers, you must ask a stranger who knows the right way to direct you.

The road to profitability

When you decided to enter the PHC contracting business arena, you chose to take a road trip with your destination being the state of profitability. Profit is the money left after paying all operational business expenses.

When you come to the fork in the road on your journey, you only have three choices regarding your prices. You can bear left and sell your services below your cost. But turning left doesn't allow you to reach your destination — the state of profitability — and your trip will be stressful and frustrating. Or you can go straight ahead and charge just enough to recover your operational costs. But this choice also will keep you from arriving at your destination.

Instead, turn right and stay on the only road that can lead you to the state of profitability. Staying on it requires you to draw up a viable budget plan, regularly monitor your true operational costs, choose a properly profitable margin, develop properly profitable selling prices, and implement business protocols allowing you to sell your services at those profitable selling prices.

To deliver excellence to the consumer, you must implement proper business protocols that let you charge prices to recover your operational costs and earn the maximum reward you deserve for the risks you take in serving the public. Excellence in performance permits consumers to receive value for the hard-earned dollars they must pay you for your services. Mediocre workmanship affords less value to consumers. Less value to the consumer means less money to you.

Excellence in workmanship means doing the best job possible and standing behind your work so the consumer has peace of mind. If a problem occurs with the job you did, you will make it right without additional cost to the customer.

However, note that warranties should be limited in scope and time — and all jobs should not be warranted. For example, installing a new faucet you supply to the customer should have a reasonable implied warranty attached to it for a reasonable amount of time. Warranties should include conditions regarding consumer abuse that would negate the warranty. 

But if the consumer supplies the faucet and the faucet malfunctions due to manufacturer's defect or consumer abuse, you have no responsibility to make reparations at no cost to the consumer.

Similarly, you can clear a drain or sewer line, but ensuring it will remain unobstructed for any amount of time is foolish because anyone can clog a drain or sewer line as soon as you clear it. There is the possibility the line is installed in a manner that accelerates the potential for blockages.

When you deliver excellence and peace of mind to your customers, you are entitled to earn more money than your competitors who offer consumers low prices because their workmanship is mediocre at best and who do not stand behind that poor quality.

Change of direction

After you’ve marked your route, you must have the resolve to follow those directions. Recently, I had the privilege of conducting a seminar for the staff of a PHC contracting business. The attendees included administrative personnel as well as the techs who perform the services.

I was there to show the techs how to be positive, personable and congenial team members who need to give consumers information and options as to the services provided by the business, be observant as to what the consumer might want or need, and close the deal. 

Emphasis on selling the job might seem mercenary, but businesses exist to sell products and services. The only reason techs are employed is to perform tasks that were sold before the techs had any tasks to complete.

I showed the techs and administrative personnel how to address consumer questions. Then we discussed what to charge customers. I asked the techs how much they thought one hour of their time costs their boss. The answers were much higher than I thought they would say and surprisingly close to the actual cost. It should have made the rest much easier. Their thoughts on the cost to the business were higher than what they had been charging to date.

I've been giving these directions for a long time. Apprehension always exists as to how much contracting firms need to charge to get everyone where they want to go. The prevalent fear is that if they charged more money for their services, they would lose business. My response is always the same. You have reached the fork in the road. You can bear left and continue to sell your services below your actual cost and lose money. Or you can take a right and make money on the tasks you perform for consumers.

Changing attitudes in business is an uphill battle requiring the owners and staff to realize that a problem exists with how they have operated the company. To get where they want to go involves a change of direction. In addition to charging properly profitable selling prices, they must also be creative in how they package what they sell to create more work. That's what being in business is all about.

It also requires everyone involved to truly intend to reach their destination by following the route that will get them there. If you feel you need direction from a stranger who knows the way, give me a call.