Are Your Employees Sharing Teeth?

Three old men are at dinner. They have a splendid meal, but they have a problem. They have only one set of teeth. It’s going to take them a while to eat. I’ll let you imagine whether they share a little at a time or one finishes before passing the teeth on. Gross, I know.

Sharing teeth is not efficient. It creates a bottleneck at the dinner table. How many of your employees are sharing teeth? In the recycling industry, we tend to be cheap because we’re bootstrappers. And many of us have had little training in decoding the financial and operating metrics that could show the costs of sharing teeth.

How can this help you make more money?
When I was an auto recycler, we shared teeth for a long time. For years, we had three dismantlers and one forklift. The dismantlers always wanted another forklift. They often waited for 30 minutes or more because the forklift was tied up unloading a transport truck or doing other duties. While they waited, they would divert their efforts to a lower productivity task or just take a break.

They had asked for the forklift and I had dismissed their request as whining. Eventually, however, I listened, and I studied how long they waited to use the forklift.

I asked them to tell me how many additional cars they could process per week with a second forklift. When I reconciled their numbers against how many minutes were lost per day per employee, buying another forklift was an easy decision. The forklift decision was good because we could dismantle the extra cars using our existing bays more efficiently since we could not add any more.

Doing this exercise with my employees and considering how a second forklift might alter the other metrics of my business is part of doing bottom-up budgeting.

I used the same method when we were struggling to hit sales targets. Using bottom-up budgeting helped me see that sales growth required hitting delivery targets. Eventually, we realized we needed another truck. Later we improved per driver deliveries by changing compensation from hourly to pay per stop. After these changes, our dismantlers and drivers made more money, and we earned a higher return on assets.

Understanding metrics and changing my employee compensation plan helped my business grow at the expense of my local competitors. Where did I learn to use metrics and get the pay per stop idea? I belonged to a group of auto recyclers that met twice a year to compare metrics and discuss successful business growth techniques specific to our industry. One of the other members had much better metrics for per driver deliveries than the rest of us. He shared the idea with the group, and I made a lot of money applying it.

If your business could benefit from fresh ideas to lower costs, raise revenues, and increase profits, join a Peer Benchmarking Review Group for recyclers. You will share metrics with recyclers from other markets and learn how the person with the best results for each metric is achieving those better results.

Ron Sturgeon, Mr. Mission Possible, has been a successful business owner for more than 35 years. As a small business consultant, he can deliver wisdom and advice gleaned from an enviable business career that started when he opened a VW repair business as a homeless 17-year-old and culminated in the sale of several businesses he built to Fortune 500 companies.

Ron has helped bankers, lawyers, insurance agents, restaurant owners, and body shop owners, as well as countless salvage yard owners to become more successful business people. He is an expert in helping small business owners set the right business strategies, implement pay-for- performance, and find new customers on the web.

As a consultant, Ron shares his expertise in strategic planning, capitalization, compensation, growing market share, and more in his signature plainspoken style, providing field-proven, and high-profit best practices well ahead of the business news curve. Ron is the author of nine books, including How to Salvage More Millions from Your Small Business.

To inquire about consulting or keynote speaking, contact Ron at 817-834-3625, ext. 232, rons@MrMissionPossible.com5940 Eden, Haltom City, TX 76117.