Watching sports is entertaining for many of us. Some of us like all sports, while others like only certain ones. I certainly fall into that category. For me, some sports are like watching grass grow and do not arouse my interest. I prefer sports with action and chess-like strategy. That’s the reason my choice of sport to watch is football, not to be confused with futbol (soccer).

Regardless of which sport we prefer, we tend to choose a favorite team that we stick with, come hell or high water. As a New York Jets fan, I surely know the downside of rooting for a team that can’t seem to get out of its own way. Yet, since the 1960s, they have been my favorite football team.

Those of you who are true sports enthusiasts might be thinking that you can’t respect a person who believes in a team that hasn’t reached the playoffs since 2010. So, why go on reading? However, please do. I have a point to make that could help you achieve your business goals.

This season, the NY Jets lost their first seven games — until they beat the Cincinnati Bengals. I’m writing this article on Oct. 28; I really don’t know what will happen the rest of the season, but there are some things of which I am certain.

If you realize where problems lie, you can come up with solutions to rectify them if you change what causes obstacles to success in the first place.

Your business, whether you are a one-person or multiperson operation, is a team, just as in sports. Teams are made up of people performing different tasks. Even a one-person PHC business is a team, since that one person must be the CEO, technician, service manager, estimator, receptionist, customer relations manager, shop/inventory manager, bookkeeper and whatever else is needed to give the business a chance to succeed.

Achieving success

For the Jets to beat the Bengals, something had to change. The Jets had to come together as a whole team. That means offense, defense and special teams had to perform well together.

In your PHC business, if the CEO has a plan for the company to succeed and the other team members do not follow it, success is less likely — if not impossible — to be achieved.

The Jets’ owner made statements prior to gameday, summarizing his lack of confidence in his team.

Before the game, we found out that one of the Jets’ former great players, Nick Mangold, had passed away at the young age of 41. I know Jets fans and I are grateful for his past play, and we pray for his family.

Maybe Nick’s passing was a mental catalyst that made the team focus on the goal of winning. The combination of the offense, which gained over 500 yards; the defense, which kept the team in the game; and the special teams, which performed especially well, resulted in success in that game at least. 

In your PHC business, your success requires you to consider change when it is necessary to achieve your goal.

Your goal in business, if you want to succeed, is to deliver excellence to consumers, control and recover the legitimate business expenses you incur in delivering it, and earn the reward (profit) you deserve for that delivery of excellence.

Monitoring business activity

Once excellence and business costs are properly addressed, the question becomes the amount of profit.

Some NFL teams, such as the Jets since 2010, don’t reach the playoffs. Others reach the playoffs but not the Super Bowl. However, one thing is certain: on the first day of any new season, all teams want to go to the Super Bowl.

Tomorrow is the first day of your business’s future. Set your sights on your goal to succeed.

When setting your profit goals, you would be wise to consider maximizing your profits. That’s the path to your Super Bowl in your industry.

Constantly and objectively monitoring all areas of your business activity to be certain that all parts of your team are functioning at peak performance is the first step on the path to success.

When you see deficiencies, address them so peak performance becomes pervasive throughout your business team:

• CEOs must put together a winning game plan.

• Technician performance must be evaluated to ensure the delivery of excellence.

• Service managers must act in a fashion that leads their subordinates to function in a manner that can and will achieve peak performance.

• Estimators must know the true costs your business will incur to perform any task so they can recover your business’s true cost regarding said task. Then, they must apply a profit margin that aligns with the CEO’s plan.

• Receptionists must handle all calls with politeness, care and sincerity.

• The customer relations team must fully understand the costs your business incurs to perform any task. The team needs to realize that consumers want the best value for the lowest price. And the team must be able to consider the consumer’s questions and do the best for the consumer while still recovering your business costs for any task. This allows your business to realize the rewards it deserves. 

• Shop/inventory managers must keep a neat shop area well-stocked with the materials you often use so that techs can always readily have what they need to address consumer requests promptly.

• Bookkeepers must have an easily understood method of keeping all records up to date and easily accessible so that costs can be properly controlled and profits can be attainable.

Contract pricing for the win

Speaking of profits and a way to maximize profits, if you are using a time-and-materials pricing method, maximizing profits is difficult. That’s due to a few reasons. 

Only a limited number of hours are available in a 40-hour, 52-week year for each tech to sell. Once an hour is not sold, your true cost per future hour increases immediately.

For example, if each tech annually gets two weeks for personal time — whether for vacation, health reasons or mental health days — gets six holidays off and loses one hour per day to nonrevenue-producing responsibilities, you only have 1,708 hours per tech available to sell. 

For every $100,000 of annual labor/overhead cost to a PHC business for each tech, your cost per hour is $58.55 for each of those 1,708 hours.

However, if you only sell 90% of your available revenue-producing hours per tech, you will only sell 1,537 hours per tech per year. That would make that $100,000 of labor/overhead hourly revenue-producing cost per tech increase to $65.06. Sell less than 90%, and the future cost per tech hour to your business rises higher yet.

Add to that some other facts. 

As your number of hours sold each day decreases, you will need to change your hourly rate on a daily basis to keep up with the unapplied labor factor.

When you sell on a time-and-material basis, the customer doesn’t know the price for the task until after you have performed it. That will increase the burden on your customer relations staff because more complaints will come after you performed the service when the consumer goes shopping and finds out that your competitors charge less per tech hour than you do. 

To further exacerbate the problem, if you truly have excellent techs, your tasks will be performed faster than those performed by the mediocre techs of your competition. 

Since excellent techs usually earn more money per salaried hour, your hourly costs are higher than the costs of your mediocre competition who took longer (that means sold more hours and probably brought in more money). That’s not fair to your business since you presumably deliver excellence instead of mediocrity.

To take advantage of your excellent technical staff, it would be wiser to quote contract prices for each task based on the time it would take an average tech to perform any service.

For example, let’s say that an average tech would take three hours to perform a certain task but your excellent tech only takes two hours to perform that same task. By calculating your price using the three hours, you would pick up one hour that could be applied to your hours that were not sold. 

That sure beats using the time-and-material pricing method. And it’s an example of how change can help you win your Super Bowl if you keep monitoring what you are doing and improving the way you do things.

Whether the Jets can dig themselves out of the hole they dug I’m not as confident as I am hopeful.

What I do know is that if you want to dig yourself out of a hole, the first thing to do is stop digging. Change is the next step. Success will follow if you strive to build, and succeed in building, a team capable of winning the Super Bowl of your industry.