Last week we talked about the dreaded finances. Old standbys like Balance Sheets and Income Statements leave many people running scared. If you want to be successful, at business or really just life in general, you need to understand finance basics. Whether for your personal finances or your company’s, knowing how much goes in, how much goes out, and how much is left, will keep you from digging a hole so deep it may take years to get out of. It seems like knowing what the problem is (expenses too high for example) would make the problem easy to fix. HOW is the next step and the one that’ll make the difference in the long run.
Recently, I’ve been assessing this in my own company. This is a never ending process. As the business grows, things that worked well before may not anymore and identifying them when they start to become a problem is the key to keeping things running smoothly (and profitably). What I found most recently is that key exchanges were killing us. It was frustrating for dog walkers to show up to get a key only to find that the previous walker hadn’t put it back or something had changed etc. It was also expensive. Paying dog walkers to drive to meet each other to exchange keys or drive to our central location every day really adds up. If we assume $3 for 15 minutes and all 15 dog walkers do that at least once a day that’s a minimum of $45 A DAY that clients aren’t paying me for. Like the difference between billable hours and not. This isn’t including having multiple copies of some keys (to prevent too much driving around) and all the time that’s spent tracking down keys and sorting out how to get them from one dog walker to another. Weekends were even worse because people were out of their regular zones and would forget to check for keys. They might get all the way to the house and realize they need to come get one and then would have to go all the way back to the walk. Now we’re late for at least one walk and we’re discounting them. That happens roughly once a week and we lose anywhere from $15-30 on it. So conservatively, we were spending around $330 a week on keys. There were certainly weeks when it wasn’t that bad, if the stars aligned and everyone had the keys they needed for the day we’d save a bit but even if it was happening half the days and the weekend wasn’t a problem we were looking at $150-200 a week. Profit margins in dog walking are razor thin and this was basically just lighting money on fire for us.
Problem found but now what? This is how I had always done it. I didn’t want to require lock boxes, what if people couldn’t have one? I looked into finding space around the city for regional lock boxes but I couldn’t find a good solution for it that way. Then I sat down with a couple people who I trust and who often help me think outside the box. Both said, why don’t you just charge for not having a lock box? Change is scary. I thought for sure I’d get a ton of push back from clients. I began texting the ones that had been the most challenging (usually because of location or time of day walked etc) and almost all of them said yes. Of the handful that said no, many agreed to the fee without trouble. Only one client said they may look elsewhere. They may, and that would be unfortunate because they’re a good client but the more I expanded the more that cost would skyrocket and eventually I wouldn’t be able to float it anymore. So it would have been built into the price already or we would be out of business. This way, instead of raising my prices $3 per walk I was able to raise them $2 and only charge people who are causing the extra work the fee. The fee is only $1 but it should be enough to offset most of the expenses and it’s more to encourage people to take advantage of a free lock box than it is to pay for the trouble. It also means less overall management. Going from 30+ clients with keys to under 5 will simplify things a lot. And yes, as a company we do anywhere from 350-400 walks a week right now. It was only 30 clients that had keys and were causing this much extra work/cost.
Diving into the nitty gritty is never fun. It’s time consuming, tedious, and solving the problems usually forces you to think outside the box. It’s a lot of work but when you discover something like this, after you get over the initial frustration from wondering why you didn’t see it before, you will feel like a champion. Like you can conquer the world.
What nuances make your business or personal life run more smoothly than others? Do you have a super cool bill tracking system? Did you reinvent the wheel or follow a path already forged?