CLIP's Tips

While most of you will have some web presence, if you’re looking to improve your set up or start from scratch, blogger and serial entrepreneur has a great article recommending steps and tools to get your business on the net.  Here are the first steps he recommends:

 

1. Set up a Home Base – Domain Name
2. Set up a Home Base – Host Your Site
3. Set Up a Home Base – Your Blog Software
4. Set up a Home Base – Blog Themes
5. Set up a Home Base – Your Site Content
6. Set up a Home Base – Link your Domain Name to Your Site Location
7. Get Your Home Base Seen

For all the details, tools and resources, go to the full article by clicking here.

As always, feel free to modify and use any of the files and ideas or phrases from them.  They were designed in Microsoft Publisher.  Click on the links to download the various file versions.

Photos were purchased at Big Stock Photo.

Flyer

.jpg file – Flyer

Word file – Flyer

Publisher File – Flyer

 

Postcard Front

.jpg file – Postcard Front

Publisher File – Postcard Front

Postcard Back

.jpg file – Postcard back

Publisher File – Postcard back

 

What are your fall marketing ideas?

Let us know in the comments!

1.  "Quality will go down the toilet."

This is probably the most common objection I hear. While the concern is understandable, this is only a perceived barrier. The results in numerous companies show that if budgeted times are fair and incentives are provided for quality work (see this post), the high standards of service a company provides can be maintained, if not improved.

2.  "It’s not legal."

This simply is not true. The law provides room for creative systems of pay as long as the pay remains above minimum wage. (See this post for more details.)

A few years ago, I interviewed a CLIP user who had their piece work system audited by a government agency. In the final analysis, the company did not violate any labor laws.

3.  "My employees won’t buy in."

This may be the biggest challenge to implementing piece work, but I’m sure you can make them buy in. They can and will buy in if you present it well and give no other option. If they are hard workers, they will love it. If they are not hard workers, you don’t really want them anyways. (Read this post for tips on getting your employees to buy in.)

4.  "It is too complicated."

Some piece work set ups may be complicated, but the system of paying for budgeted man hours (as explained here) is almost as easy as basic hourly pay.

5.  "I don’t like to make profit."

Just kidding. I haven’t heard that one before.

 

To be clear, I am not saying that every company must implement piece work in order to be successful. There are obviously many successful and profitable companies who do not use piece work. What I hope you have seen though, is that piece work can be an effective tool for increasing efficiency and profit.

If you have any more questions, please post them in the comments here. I will be answering questions I receive in the next and final piece work post.

 

In this series:

1.  Why Piece Work? (Part 1 & Part 2)

2.  How to to set up and track Piece Work in CLIP (Part 1 & Part 2).

3.  Tips for implementing Piece Work in your company.

4.  Common Objections.

5.  Q & A (send me your questions)

 

*Disclaimer: I am not a lawyer or qualified to provide legal advice. It is your responsibility to ensure that you are in accordance with all applicable laws.

Photo Credit: Ivy Dawned

A good reminder to put things into perspective:

An American investment banker was taking a much-needed vacation in a small coastal Mexican village when a small boat with just one fisherman docked. The boat had several large, fresh fish in it.

The investment banker was impressed by the quality of the fish and asked the Mexican how long it took to catch them. The Mexican replied, "Only a little while." The banker then asked why he didn’t stay out longer and catch more fish?

The Mexican fisherman replied he had enough to support his family’s immediate needs.

The American then asked "But what do you do with the rest of your time?"

The Mexican fisherman replied, "I sleep late, fish a little, play with my children, take siesta with my wife, stroll into the village each evening where I sip wine and play guitar with my amigos: I have a full and busy life, senor."

The investment banker scoffed, "I am an Ivy League MBA, and I could help you. You could spend more time fishing and with the proceeds buy a bigger boat, and with the proceeds from the bigger boat you could buy several boats until eventually you would have a whole fleet of fishing boats. Instead of selling your catch to the middleman you could sell directly to the processor, eventually opening your own cannery. You could control the product, processing and distribution."

Then he added, "Of course, you would need to leave this small coastal fishing village and move to Mexico City where you would run your growing enterprise."

The Mexican fisherman asked, "But senor, how long will this all take?"

To which the American replied, "15-20 years."

"But what then?" asked the Mexican.

The American laughed and said, "That’s the best part. When the time is right you would announce an IPO and sell your company stock to the public and become very rich. You could make millions."

"Millions, senor? Then what?"

To which the investment banker replied, "Then you would retire. You could move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siesta with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos."

 

I originally read this in the 4-Hour Work Week by Timothy Ferriss.

Photo:  Lucas Jans

1.  Teach the concepts to your team.

"You make money when we make money." – Win-Win

This is probably the most important concept to get your employees to buy in to.  In a traditional employer-employee relationship, usually no correlation exists between employee compensation and company performance. If efficiency is lacking, the company loses and the employee doesn’t; if efficiency is good, the company wins and the employee doesn’t.  In a piece work system, the link is made between company performance and employee compensation.  This is a Win-Win situation—when employees perform well, both sides benefit.

"Think like an owner." – Responsibility

Liberate your people to take responsibility and make decisions.  This fits hand in hand with the previous principle.  If they make money when you make money, you will both have the same mindset.  Employees will be thinking like the owner because, like the owner, their compensation is directly affected by the decisions that they make.

Responsibility is a key ingredient in creating a meaningful and fun work experience.  When your crews are able to take ownership of their job, not only will they make better decisions, they also will enjoy their jobs more.

"You get paid for performance, not breathing" – Differentiation

Ask you crew if they have ever worked in a situation where a poor performer was being paid more than or the same as they were–they probably have. Encourage them that if they differentiate themselves and become top performers in your company, they will be directly rewarded.

2.  Give a pay raise.

Because you know that team members in the piece work system will be performing more efficiently, offer a higher hourly wage when they are on piece work than when they are paid hourly.  For example, if one guy normally gets paid $10.00/hr, give him $11.50 when on piece work.

3.  Offer a 2-4 week trial.

Here’s how the trial works. For 2-4 weeks, tell the crew that you will pay them either their hourly wages or their piece work wages, whichever is higher.  This way they have time to get adjusted to the new system.  Make sure that you set a definite end period for this though.  If you don’t, they won’t see the urgency to increase their efficiency.

4.  Show them it can be done.

If your team members don’t think they can complete the work in the estimated/budgeted times, show them how.  Get out there yourself and do it (if you are able ), have your top performer demonstrate, or even take them to visit another company who uses piece work.  (We have had a company visit CLIP Lawn Care for this very purpose.)

5.  Help them.

Ask them what they need to get the work done efficiently.  Do they need better equipment, better routing, a GPS?  Do they need more training on how to perform efficiently?  Make it happen.  The increase in efficiency and morale will more than make up for the investment.

Have you implemented piece work into your company?  What has made it successful for you?  Please share in the comments.

In this series:

1.  Why Piece Work? (Part 1 & Part 2)

2.  How to to set up and track Piece Work in CLIP (Part 1 & Part 2).

3.  Tips for implementing Piece Work in your company.

4.  Common Objections.

5.  Q & A (send me your questions)

This comes from the E-Myth blog.  As you read through the list, be sensitive to your reactions.  Is there anything you need to act on now not to lose any good customers?

1. Ignore Your Customers. This cardinal sin can be achieved in person, on the phone, and even over the Internet. Many retail companies adopt a “10 Foot Rule” that requires customers to be acknowledged if the employee is within ten feet of them. Greeters at the door are not only good for Wal-Mart, and acknowledging customers by answering phones quickly and with a smile is just good business.
2. Make it Difficult to do Business With You. Customers shouldn’t have to work at giving you their money. And they shouldn’t have a fight on their hands if they need to return your product or are unhappy with your service. If you make it hard on your customers someone else is always willing to go the extra mile for them.
3. Display a Lack of Integrity. Whether this is simply staff making excuses for poor service or products, or engaging in sales or marketing practices that can be perceived as deceptive, being a trusted and reliable business is an absolute essential. No one likes to feel lied to or treated in a way that is less than honest.
4. Become Dull and Predictable. This doesn’t mean sacrificing reliability and standards of quality and excellence, but customers expect innovation. And people being people, they are stirred by positive surprise and delight – just because your business has been around for fifty years doesn’t mean it has to look and act like it.
5. Don’t Listen to Your Customers. We live in an age where product and company reviews are being posted for posterity across the Internet, and perhaps on your company’s own website. Therefore, it is critical for you to hear what your customers are saying and respond. This can also mean reviewing relevant blogs, performing regular market research and simply talking to your customers.

5 Ways to Lose Good Customers at e-myth.com

You have probably heard me mention David Allen’s book Getting Things Done on this blog.  It has dramatically improved my productivity and peace of mind in the day to day game of work.

Recently, I cam across “10 big ideas from GTD”, an exceptional summary about Getting Things Done.  Here are the 10 big ideas:

1. If your day-to-day life is out of control, it’s almost impossible to think strategically or plan effectively.

2. Define what being “done” looks like.

3. Mental work has five distinct phases: Collect, Process, Organize, Do, and Review

4. Get everything out of your head.

5. Projects and tasks are two different things: track them separately.

6. Focus on the Next Action required to move forward.

7. Use the “2 Minute Rule” for small tasks.

8. Use Reference and Someday/Maybe files for things that have no immediate next actions.

9. Build a trusted system that helps you keep track of your commitments.

10. Schedule non-negotiable time for a Weekly Review.

I highly recommend the rest of the article and the book.

Read the whole article: 10 big ideas from GTD

Buy the book:

In our last installment in the piece work series, we discussed how to set up piece work in CLIP. In this post we will discuss how to pull reports for employee efficiency and payroll.

Employee Efficiency Report

The most essential report for piece work is the employee efficiency report.  The employee efficiency report will give you the information needed to analyze your crews and to complete payroll.  This report can be accessed from the menus at the top of the screen in CLIP.

Click on Reports > Employee > Efficiency Report > Report Hours only.

 

After clicking on it, you can select the date, crew range, specific employee id and layout options.

This is the setup I most commonly use:

Click “Output” to preview or print the report.  Here is the report:

Here is an explanation of the most important columns:

Budgeted Man Hours:  Total budgeted man hours completed.

Actual Man Hours:  Total time spent on all jobs (not including travel time)

Paid Hours:  Total working hours (from beginning to end of day)

Actual vs Budgeted:  Compares time spent on property to budgeted man hours.

Actual vs Paid:  How much of the clock time was spent on jobsites.

Budgeted vs Paid:  Compares budgeted man hours to total clock time.

This report is a great resource for your crews. Providing this report on a daily or weekly basis gives the crew an accurate measurement of their efficiency so they can see where improvement is necessary. 

The most important column for the crews to pay attention to is the Budgeted vs. Paid. If they are above 100% in this column that means that they are doing well. If they are less than 100%, they need to improve.

How to Use this Report for Payroll

Run the efficiency report using the dates for the payroll payroll period.

Review the report to ensure that everything is correct.

For payroll, you are going to use two columns: Budgeted Hours and Payroll Hours.

Budgeted Man Hours

Your employees will be paid total Budgeted Man hours x their hourly rate. For example:

98 hours x $12.00/hr = $1176.00

Payroll Hours (total working hours)

Because of minimum wage laws, the total working hours for your employees must be tracked.*  Your employees must be paid at least minimum wage (including any applicable overtime) for the actual hours they were on the clock. If their piece work pay is less than this, you must pay them the minimum wage instead.

Example:

Enrique Salvador gets paid $9.00/hr on piece work. He was on the clock for 40 hours during the payroll week. In that time, he completed 28 budgeted hours of work. We need to check the following two calculations:

Piece Work

$9.00 x 28 = $252.00

Minimum Wage

$7.25 x 40 = $290.00

In this scenario, we would be required to pay Enrique the minimum wage of $290.00. Hopefully, this won’t happen frequently because that would be 70% efficiency on Enrique’s part.

I have attached a spreadsheet here that you can use for checking piece work pay against minimum wage.

Minimum Wage Check Spreadsheet

That’s it!  With the Budgeted Man Hours and Payroll Hours from the Employee Efficiency Report, you have everything you need to calculate payroll.

Questions?  Feel free to email me or post a comment.

In this series:

1.  Why Piece Work? (Part 1 & Part 2)

2.  How to to set up and track Piece Work in CLIP (Part 1 & Part 2).

3.  Tips for implementing Piece Work in your company.

4.  Common Objections.

5.  Q & A (send me your questions)

*Disclaimer: I am not a lawyer or legal expert. It is your responsibility to make sure you are in compliance with all applicable laws in your area.

Here’s one of the main differences:

The key distinction is when you know it’s going to work. The mass marketer doesn’t know until the end. The direct marketer knows in the beginning.

This is a great short article on the two types of marketing:

Getting to scale: direct marketing vs. mass market thinking

What is your mentality?

In this post, we will discuss the specific methods for setting up and tracking piece work.  In the next post we will cover reports and payroll for piece work.

Method

The method I recommend uses budgeted man hours for the basis of pay.  Every job has a budgeted man hour rating.  For example a job could be rated at 25 minutes (.42 hrs.), 1 hour, 10 hours, etc.  Employees are paid the total of all of the budgeted hours they complete times their hourly wage (ex. $10.00/hr).

Other methods for paying piece work, such as paying a percentage of revenue or paying by credits, exist but the budgeted hours method is superior for the following reasons:

1.  Budgeted hours is easy for employees to understand.  Because their pay check is still based on an hourly wage, they will most likely grasp the concept more quickly.

2.  CLIP is already set up to track budgeted man hours; therefore, no additional set up is necessary.

3.  Differentiation in pay among employees is simple. To pay one employee more, you only need to raise their hourly wage, rather than calculate percentages or factors of credits.

 

Ok, now for the set up.

Job Detail

For each job that you set up in CLIP, make sure that you have a budgeted man hour assigned.  You will find this in the Job Detail tab. 

If you know your dollar-per-hour labor rate and know that your pricing is accurate, you can use the Calc 2 button to automatically calculate the budgeted man hours.  Calc 2 will divide the price (minus materials) by your dollar per hour rate.  For example:

If you charge $40 per hour, a $100 job would be calculated as follows:

$100 / $40 = 2.5 hours.

Route Sheets

Now, when you print your route sheets (depending on the options you choose), your crew will be able to see their budgeted man hours for the day and for each job specifically.

(The route sheet I am using here is a customized version of the Enhanced Route Sheet)

Recording Work

When you record the work as done, CLIP will automatically record the budgeted man hours for each job and will divide them up among any employees on the crew.

Tip:  When recording work, watch out for 0’s in the budgeted man hour field.  This is a common occurrence when a mistake is made setting up the job.

Before posting, you can review the total budgeted man hours recorded.

After posting you can view the totals recorded on the Final Work Done Report.

 

Stay tuned for Part 2 on how to run reports and obtain payroll information for piece work.

Continue to ask questions if any of this doesn’t make sense

 

In this series:

1.  Why Piece Work? (Part 1 & Part 2)

2.  How to to set up and track Piece Work in CLIP (Part 1 & Part 2).

3.  Tips for implementing Piece Work in your company.

4.  Common Objections.

5.  Q & A (send me your questions)