One way to stay in business is by giving incentives to your employees. There are various ways to do this. The most direct way is to give unexpected cash bonuses and other rewards. When a job has returned an unexpectedly high margin of profit, a few hundred dollars or more, given as appreciation for your employee’s skill and effort, is not much, but is a great investment because it helps to ensure that the employee will focus on profit. Weekend trips and paid vacations are another method of showing your appreciation. Allowing your employee the opportunity to do a simple labor intensive job on the weekend or after hours, which you had no time to do, might unexpectedly double their paycheck; it might also fulfill their need to feel like a contractor. I always try to err on the side of generosity.

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There are many ways of providing incentive. If someone is making a good weekly salary and is continually rewarded, they tend to stay with you and not look for greener pastures; they are happy with the status quo. This tends to create an engaged and committed employee who is focused on making the maximum profit on every job. You no longer have to supervise and make common job decisions for them. A committed employee frees you to do more of the company’s daily work. Now you earn close to what you were making before you hired your first employee and, while it is true that your new employee only makes the company half as much as you do because you deduct their labor and incentives, it allows you to make 25% more than you were earning on your own. Grooming a committed and motivated employee generates good service and workmanship; this places you in position to hire another employee when the business’s work load increases.

Gradually, you can train enough technicians to take responsibility that your job becomes exclusively administrative, which frees you to develop new ways to expand and enhance your business. It’s a long, challenging process, but in the end you have created a substantial, solid business that you can be proud of and on that can sustain your family for many generations.

Gary R. Tanner
Owner – Town and Country Plumbing