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Contact / About | Numbers Cruncher |
Flat
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Who is Gene Burch, and how he did get involved with Numbers Cruncher? The beginning I feel that I am very much your typical Plumbing Heating & Cooling contractor in as I started out as so many of us do. I entered the industry as an apprentice plumber after being discharged from the Navy in 1959. I first starting out working for my Father, and then moved on to a couple of other companies before starting my own business out of my garage with a freshly repainted used telephone company truck in 1975. The company was able to succeed, and I was fortunate enough to be able to retire and sell the company to my two sons in 2005, and it is still going strong. Again like most of us, I was a very good at my trade as a Plumber, and I had some knowledge about running a business as I had worked as a supervisor earlier on. However, my problem was that I did not know how to create an accurate Line Item Budget, and therefore was unaware of what my hourly labor rate should be, let alone make a profit. Since I really did not know how to find out, I phoned up one of the other plumbers in town, and asked what he charged per hour. Based on what he told me, I then established my rate $2.00 per hour or so higher than his, and I was in business. Sound familiar? Using the same numbers that other companies charge in your area for your own is a very common and dangerous way of doing things, and is referred to as the “Going Rate”. Doing this is foolish if nothing else, as every business has different costs. I also feel it is the primary reason why most businesses either do not make a profit, or eventually fail. There is an old Chinese Proverb that addresses the folly of not knowing ones costs; it goes like this. To guess is cheap. To guess wrong is expensive. The early years By 1977 we were making money due to the fact that we did good work, and I had decided to double the “Going Rate”, and was working 60 to 70 hours per week. For the next few years whenever we needed extra money for the business, I would have to borrow it personally since a large percentage of the company's money was always tied up by contractors who were 30 to 90 days behind in paying me. In fact, during a couple of earlier recessions, we also had to refinance our home just to keep things going. The near demise of our company began with the onset of a brutal 2-1/2 year recession in our area that started for us at the end of 1989, when my ignorance of what it was really costing to run our business finally caught up with us. The end is in sight By early 1990 things were hopelessly out of control as we had been installing plumbing in new houses built on spec. which were not selling, and the contractors who owed us a lot of money were not paying us. Within a few short months we went from a 13 plumber operation to just my two sons and myself, while still owing a lot of uncollected money to our suppliers. Fortunately, I had started to finally make some changes for the better a year or so before, as I had been a member of the PHCC for some time, and had started networking with some successful members on how to improve our company's finances. I really took a great leap forward in late 1988 when our local PHCC sponsored a seminar by Frank Blau, and he confirmed what I already knew. I had become a fairly good business person who still did not know enough about the money side of the business. What finally came to me while attending that Seminar, is that I had really always been afraid to find out about the numbers. The fix was really very simple; the fear of not knowing, finally overcame the fear of knowing. In my case it was solidified by Frank Blau’s in your face no nonsense style of teaching. I have since discovered while helping other people over the years that I was not unique in this, as I repeatedly hear similar versions of my own story. A new beginning Also on that day, Frank convinced me that if we were going to ever become a successful company; we needed to convert our old new construction company into a new Flat Rate Service and Repair company. About the same time, I came across an advertisement for a software program from the NSPG Company called "Numbers Cruncher", which claimed it would allow you to determine your cost of doing business in a very quick and easy fashion. That was just what I needed; something simple and easy to use that would help me. I ordered the program, and since I did not know how to use a computer at that time, I had a contractor friend of mine help me install the program and input the numbers furnished by our bookkeeper. In less than an hour we had the answer. I was dumbfounded, our Breakeven per Hour Number was twice what our "Going Rate” per hour guesstimate was which was already higher than most shops in the area. The reason being, I had now included all of our costs, as well as the Productivity Ratio loss which accounted for the non-productive time lost by our Service & Repair Techs. Going Flat Rate After seeing how high our breakeven number was, I called Mike Conroy at NSPG and told him there must be something wrong with his software, and the numbers had to be wrong. He laughed and said that he heard this all of the time, and that the numbers were probably correct. He then spent some time going over our numbers with me again, and determined in fact they were correct. I then purchased a Flat Rate book system and started our new company Flat Rate business model. I had finally decided that I was not only going to save our company, I was going to create a professional and profitable Service and Repair company. The system we installed is still working under the care of my Sons, of which I am very thankful for and proud of. Over the years I have heard it all by people who were afraid of Flat Rate. "It will not work in this area, we live in a small town", "I will lose all of my customers", "My competition will not let me go Flat Rate", and/or "My customers are different". Then of course there is always, “If I charge that much I will never get a job"; even though the company is currently losing money on every job they do. How can I help you? I am now representing NSPG, and am supporting the Numbers Cruncher software program as well as their other business products. I can help you by giving you "real world" information and experience gained by salvaging a once failing business and turning it into a successful and prosperous operation. I will offer you straightforward, no nonsense advice on how to change your business and your life. I am not just a salesperson trying to sell you something. I have been where many of you are, and I have fixed it! I sincerely do not want anyone to have to go through what my family and I did years ago. My goal is to help you make the changes you must in order to become successful before that happens to you. Thank you, Gene Burch |
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