Posted on

Dear David: Affordable perks to offer millennial employees

June 11/18, 2018: Volume 33, Issue 26

By David Romano

 

Dear David: 

I just spent the past couple weeks interviewing people for two retail sales positions. Most of the people I interviewed were less than 30 years old and a lot of them asked some very weird questions about benefits. I know you owned a recruiting company for the flooring industry and I was wondering if you could help me. Do I really need to give employees free food, memberships to gyms and be so flexible on hours worked? It seems pretty silly to me because I didn’t need any of that when I was that age and neither did my older employees. 

Dear Owner,

What you experienced in those interviewers is what all companies are now facing. The mix of benefits desired by today’s workforce is much different than past generations. The time to get on the bus and change how you think is now. In fact, according to a study conducted by Deloitte Consulting in 2018, 66% of millennials expect to leave their organizations by 2020.

Companies are at risk of losing a large percentage of their next-generation talent if they fail to adjust. That’s why cultivating workplace culture and incentives that keep employees happy and productive is critical.

One solution to consider for overcoming the millennial retention issue is company perks. Perks pack the potential to attract new and retain existing millennial talent. In the same Deloitte study, it was found that 64% of millennials care about company benefits (compared to 54% of Generation X and 51% of baby boomers). Perks and benefits are the No. 2 thing behind culture and values that millennials want to know about a company. According to Perkbox, 69% of 18-to-24-year-old millennial employees say company perks are crucial to job satisfaction, compared to about half of baby boomer employees.

Following are what millennials listed as important perks.

Travel perks. According to a study led by Harris Group, 72% of millennials prefer spending money on travel and social events. Allowing your employees to travel for vacation will make them love working for your company. They will also feel less stressed.

Flexible hours. Millennials value personal time. According to a recent study on The Cost of Millennial Retention, 45% of millennials chose flexibility over higher pay. There is no reason to have your entire sales staff come in at 9 a.m. and leave at 6 p.m. Let some come in later and some work from home.

Offer free food. Many companies are picking up the tab for meals. Other companies also found that free food during meetings and on Fridays encouraged more employee productivity and attendance.

Training and team-building. Millennials are proud to describe themselves as life-long learners. Team-building activities are ways to relieve stress and keep work relationships strong. Sandler Sales classes, bringing top sales associates to education day events at conventions and staff bowling nights should help.

Gym membership, spa or yoga. A healthy employee is a happy employee—and happy employees get the job done. Millennials are one of the most health-conscious generations. If you want to keep them, wellness programs will help.

Off-site charity events. Many millennials believe companies should contribute toward a good cause. If your company hosts off-site charity events from time to time, you’ll likely attract millennials and generate good press at the same time.

David Romano, formerly the founder of Romano Consulting Group as well as Benchmarkinc Recruiting, is currently the director of Dallas-based Romano Group. You can contact David at david@romanogroup.com.

Posted on

Dear David: Effective management tips for all generations

May 28/June 4, 2018: Volume 33, Issue 25

By David Romano

Dear David: 

I’ve been a general manager for the last 11 years and make it a point to attend educational events at conventions focusing on managing a millennial team. My struggle is that I’m having just as many problems managing my older staff. Do you have any suggestions on how I can manage my team regardless of age?

Dear General Manager,

There are many nuisances to managing different generational teams, but effectively managing a team is pretty basic. Ironically, managers in some of my organizations were having similar difficulties. However, once they adopted the following concepts, their ability to manage their teams improved.

Be courageous. A leader’s courage is based upon his knowledge of subject matter, confidence in his abilities and understanding of his functional role. Employees will not tolerate being told what to do by a manager who does not possess self-confidence.

Maintain self-control. Be in control of your actions, especially in pressure-filled situations. Without self-control, you cannot lead effectively. Self-control sets an example for your personnel. This is a case of “Do as I say” and “Do as I do.”

Be consistently fair. Employees expect to be treated fairly. If they do not have a sense that their treatment is measured, fair and just, they will not pay you the respect you need.

Make clear, decisive decisions. An indecisive manager broadcasts to the staff that he is not sure of himself. Be clear, be decisive and stick with your decision. You may not always make the correct decision, but you will be respected in making one and following through.

Plan effectively. You’ve probably heard Joe Paterno’s quote, “The failure to plan is planning to fail.” A manager who works reactively without definite plans is comparable to a plane without landing gear—it will land, but the result will be everything from bumpy to disastrous and fatal.

Over-deliver on expectations. Always lead by example. People don’t care as much about what you say as they care about what you do and how you go about doing it. A leader must be willing to do more than they demand.

Have a pleasant demeanor. Being rude and overbearing is not a quality anyone should have. Leadership demands respect, both of others and of you. Staff will not respect a leader who does not conduct himself in a proper manner.

Be firm but empathetic. A leader must understand his people and their problems. Remember, the customer is always right, except on occasions when she is wrong. As leader, there will be times when you must defend your staff.

Pay attention to detail. In retail, it’s important for you to see the store through the guests’ eyes and through the staff’s eyes. Remain vigilant and look for ways to improve the customer’s experience and make your staff’s functions easier.

Cooperation is key. A successful leader understands cooperation and applies it consistently. He uses cooperation as part of his standard operating procedure and, through his example, causes his followers to do the same. Do not confuse cooperation with weak command and control. A weak leader will only gain cooperation begrudgingly.

David Romano, formerly the founder of Romano Consulting Group as well as Benchmarkinc Recruiting, is currently the director of Dallas-based Romano Group. You can contact David at david@romanogroup.com.

Posted on

Dear David: Secret to sales success—Rarely be yourself

April 30/May 7, 2018: Volume 33, Issue 23

By David Romano

Dear David: 

I just don’t understand why I spend so much money getting people in the door and less than half of them buy something. My salespeople are paid a commission, so they should be motivated. They are all experienced and well trained. My prices are competitive. My selection is the best in the market. What is going wrong? 

Dear Blinded Owner,

Let’s start this off with an important ratio: Success in business is 15% what you know and 85% how you interact and get along with others. You can have the most experienced, well-trained sales team on the planet, but until they understand this ratio, you’ll continue to have issues closing customers.

I was once introduced to the DISC method and was blown away with the concept. DISC teaches a key element: Don’t treat others the way you want to be treated, treat them the way they want to be treated. In other words, find out one’s personality style, adapt your basic style and use your persuasive skills to manipulate someone into doing what you want them to do.

In a sales relationship, the other person doesn’t care what you like or don’t like, they don’t care how you want to be talked to or treated— they care most about how you are treating them. Some like a hard close, while others prefer soft; some like a close that highlights what a great choice they are making; some decide on the spot and others need some time. Get this right and manipulating a customer to a sale will be a whole different ball game.

According to DISC, there are four types of personality styles and the percentages of the population they represent: D—Outgoing and task focused (10%); I—Outgoing and people focused (25% to 30%); S—Reserved and people focused (30% to 35%); C—Reserved and task focused (20% to 25%).

My basic style is a D/I blend, and I represent less than 4% of the population. What does that all mean? If I treat everyone the way I want to be treated, I would alienate 96% of those I encounter. I spend a majority of my time being someone I am not—I figure out the customer, I flip a mental switch and temporarily become just like the person in front of me.

This is your biggest issue: Your sales associates are treating your customers the way they want to be treated. Here is some data to back up my conclusion. The highest segment of the population is an “S” type (30% to 35%), and the average close rate in the industry is (30% to 35%). If your “S” sales associates talk the same language to your “S” customers, you should close at the same ratio—assuming your prices, services and selection are competitive.

The solution to your dilemma is simple—your sales associates need to be trained in DISC and use those skills, along with the other intangibles you mentioned, and I guarantee you will see a difference in your close rates. They will be able to identify personality cues with just a handshake and subtle mannerisms. When doing measures, they will gain insights by the type of pictures on the walls and how the home is organized. Those cues and flipping a switch to match the customer’s style will lead to both higher close rates and average tickets.

David Romano, formerly the founder of Romano Consulting Group as well as Benchmarkinc Recruiting, is currently the director of Dallas-based Romano Group. He writes frequently on hiring and sales training, Contact David at david@romanogroup.com.

Posted on

Dear David: Effective ways to better manage your time

April 16/23, 2018: Volume 33, Issue 22

By David Romano

Dear David: 

In one of your columns you stated the No. 1 motivating factor to happy employees is a sense of accomplishment. I guess that is why I feel so burnt out and frustrated. It seems the longer I own my business, the less I get marked off my to-do list each day. Any advice you can give on how to get more done would be greatly appreciated.  

Dear Normal Owner,

You are not alone. The good news regarding your dilemma is it is completely mental. You create it—and anything you create you can manage. It’s time to remove any self-sabotage or self-limitation you have around starting a new project or improving what you are currently doing.

There are countless techniques that can be covered such as the use of a “do not disturb” sign on your office door, doing a better job of delegating the small stuff, to turning off your phone or email for extended periods throughout the typical workday. I have outlined several proven techniques that have made a real difference in my life when it comes to juggling multiple businesses while still having time to spend with my family and friends.

Plan ahead. Take the last 30 minutes of every day to plan your next day. Don’t end your current workday until you’ve completely outlined what you need to get done and in what order for the next day. The most important part of your day is the time you set aside to schedule time.

Make a list. Create a Kanban board listing what you have to do, what you are currently doing and what is already done. Better yet, paint a wall with chalkboard or whiteboard paint and section it off into the three grids. Use post-it notes and place a new task on “to do.” Move it to the “doing” section when it is being worked on, and then to “done” when completed. This board is a great visual that is always top of mind and hard to forget what needs to be done.

Time box your tasks. Time boxing refers to containing your tasks within fixed time slots. For example, box task A from 9 a.m.–10:30 a.m., task B from 10:30 a.m.–1 p.m. and task C from 2 p.m.–4 p.m., etc. Time boxing helps you stay disciplined and prevents your tasks from dragging on.

If you set a specific time frame and strictly adhere to it, you will find a way to get the work done. Note: Set a time that is challenging, yet achievable. If a task takes three hours, don’t allocate more time than it requires. Box for three hours or less so you can learn to optimize your output during the time frame.

Use the 80/20 rule. This rule states 80% of output is brought about by 20% of effort. The remaining 20% of output is achieved by putting in 80% of effort.

Let’s say you have a report due; but, in order to produce the best report possible, you need 100 hours. According to the rule, you can get 80% of the quality in by spending 20 hours (20% of 100 hours). In order to boost the report’s quality to 100%, you’d have to spend 80 hours (80% of the time). From an effectiveness standpoint, that doesn’t cut it. The 80/20 rule tells us to get 80% of quality in and chuck the remaining 20% since the time needed doesn’t justify the value we get. You can keep revising something to perfection, but that time is probably better spent working on a new task.

David Romano is the founder of Romano Consulting Group as well as Benchmarkinc Recruiting. He is currently the director of Romano Group, headquartered in Dallas. You can contact David at david@romanogroup.com.

Posted on

Dear David: Achieving a better work-life balance

April 2/9, 2018: Volume 33, Issue 21

By David Romano

 

Dear David:

I purchased two flooring stores from my parents about 10 years ago. My wife works alongside me and we have two children. Growing up, I watched my parents spend most of their time inside the store, which took a toll on my childhood and their well-being. I swore I would not let that happen to my family, but I find myself doing the same thing. Help me break this pattern before this business breaks me.

Dear Owner,

You are not alone. A recent study by Family Living Today and Now Sourcing uncovered surprising statistics about work-life balance across the country. Right now, the United States ranks 30th out of 38 countries that have positive work-life balance. Maybe that’s because, according to the research, more than 11% of American workers say they work 50 or more hours a week, and 66% do not believe they have a healthy work-life balance. In fact, many people (33%) also find themselves working weekends or holidays.

According to the same study, some of the short-term effects at home of a poor work/life balance include: 38% lack of  focus and engagement at home; 51% missed important life events; 40% ruined time spent with family/friends (conference calls, called away from activities); and 50% less time with friends and family.

Some short-term effects at work include: 36% poor productivity; 68% poor morale; and 41% feeling burnt-out or fatigued.

What’s even more alarming are the long-term health effects for employees working over 55 hours per week: higher risk of coronary heart disease and stroke; higher risk of anxiety (1.74x) and depression (1.66x); higher stress and cortisol levels throughout the day when expected to be available to work on their off-hours.

Here are some things that can be done:

Switch off your phone. Checking updates and emails during your time off interrupts your relaxation and stresses out your body.

Make time for exercise. Physical activity boosts energy and concentration and is usually the first thing scratched from your schedule when you are busy.

Eliminate the extras. People who are overworked tend to overwork themselves. I recommend painting a Kanban chart on  your office wall organizing tasks, with “to do,” “doing” and “done.” This will allow you to keep track of tasks, become more efficient and feel comfortable walking away from the office when everything you set out to do for the day is done.

Delegate. This is normally the Achilles heel of small business owners. There is glory in being involved in every facet of your business and putting in more hours than everyone else. However, studies have shown no correlation between working longer and harder and the profitability of a business. The most successful entrepreneurs own a business and not a job and spend their time managing people and process. Once you build a strong, self-reliant team with detailed job descriptions and dashboards your life will change in an instant.

The E-Myth Foundation found that business owners who took more than one month vacation each year were both more efficient and more profitable than those who took less time. Spend individualized time with each member of your immediate family every year. This allows for bonding and an appreciation for those who have sacrificed for the good of your career.

David Romano is the founder of Romano Consulting Group as well as Benchmarkinc Recruiting. He is currently the director of Romano Group, headquartered in Dallas. You can contact David at david@romanogroup.com.

Posted on

David Romano sells Benchmarkinc Recruiting

Screen Shot 2017-08-24 at 11.05.45 AMWichita, Kan.—Earlier this year, Bradley Cotlar, former vice president and CFO of Big Bob’s Flooring Outlet of America franchise group, and his wife, Jennifer, acquired Benchmarkinc Recruiting, the recruiting division of Benchmarkinc Consulting, from David Romano, founder and well-known consultant, trainer and author. The division is one of the leading job recruiting firms in the flooring, disaster restoration, window coverings, home furnishings, electronics and home improvement industries.

“David Romano and Benchmarkinc have a strong reputation and are the leaders in recruiting, consulting and training in the industries they have serviced,” Cotlar, owner and chief matchmaker, said. “Their proven practice and systems made it an easy decision to pursue this opportunity.”

With this acquisition, Cotlar will be able to leverage the company and systems Romano created and continue on his legacy of providing clients exceptional, hassle-free service by quickly finding and placing top-notch candidates into their companies.

“We were adamant our successor understood exceeding client expectations was as important as profitability,” Romano said. “We considered many proposals and believed Brad to be the most capable of carrying on our legacy, because his ethics are impeccable and he understands the industries that we serve. We are grateful to all of those who have allowed us to be part of their companies and feel supremely confident the new version of Benchmarkinc Recruiting is poised for even greater success.”

Since the acquisition, the office in Raleigh, N.C., has been moved to Wichita, Kan. The Benchmarkinc Recruiting name will remain.

For more information, visit: bmarkinc.com.

Posted on

Dear David: First impressions of your showroom count

August 14/21: Volume 32, Issue 5

By David Romano

Dear David:
Screen Shot 2017-03-06 at 10.37.51 AMI have tried just about everything to get my sales associates to better organize the floor but nothing seems to work. I know we need to look better, but there is only so much I can do myself and I cannot afford to hire a cleaning company to come each night to clean and organize the showroom. Any thoughts?

Dear Fed Up Owner,
I am sorry to hear that your sales staff is giving you such fits when it comes to cleaning and organizing the showroom floor. The first thing I suggest you do is make them aware that keeping the showroom in good working order is their job. Many times they push back and say they are paid to sell and not clean; I push back and say if they are not clean they wouldn’t sell anything. Here are common situations to avoid when organizing your showrooms.

  • Dirty bathrooms. Restrooms should always be sparkling clean, whether they are open for public use or not. Make sure to stock the bathrooms with plenty of paper products, soap, trash receptacles and clean it daily
  • Bad quality of the floors. If you sell flooring and your floors are dirty, worn, scratched, missing transitions or outdated, how in the world do you expect people to want to buy from you?
  • Loud music. Playing music in a retail store can help create a certain atmosphere for your shoppers. However, music that is too loud, inappropriate or of poor quality can ruin a positive shopping experience
  • Handwritten signs. In this era of technology, there is no excuse for displaying handwritten signage and price tags. Printed versions simply look more professional, and hard-to-read handwriting can be a customer turn-off.
  • Stained ceiling tiles. Ugly ceiling tiles can turn off many shoppers. Who wants to buy products for their home from a company that cannot even clean their ceiling?
  • Poor lighting. Replace any burned out light bulbs as soon as possible. Make sure all customer areas of the store have ample lighting and take into consideration shoppers with aging or less than perfect eyesight.
  • Offensive odors. Shoppers don’t want to smell an employee’s lunch drifting across the store or musty carpet that should have been replaced 10 years ago. Use neutralizers to combat any offensive odors or remove the source of the aroma altogether.
  • Crowded aisles. Consumers like a wide selection, but not if it means sacrificing comfort while shopping. Be sure your store is designed to allow adequate space between aisles and keep walkways free of merchandise.
  • Poorly maintained parking lot or exterior. Overgrown bushes and grass, old signage, litter or a poorly maintained façade is sure to send folks back to their cars before entering the store. Send out the warehouse guy every morning to take care of the exterior and hire professionals to maintain the building appearance.

To avoid the above scenarios, I recommend you create a “zoned” maintenance plan where you split the showroom up into regions and assign certain duties to your sales and reception staff. Each morning assign a zone to at least one member of the team outlining the areas to be maintained and provide a checklist to ensure everything is in good condition and well organized. More importantly, be sure to be consistent in the execution. At first it might seem like a lot of work but over time it will be very easy for employees to maintain. Remember, you pay them to clean up after themselves.

 

David Romano is the founder of Romano Consulting Group and Benchmarkinc, a group that provides consulting, benchmarking,
recruiting and software solutions to the flooring, home improvement and restoration industries.

 

Posted on

Dear David: Managing a business amidst sibling rivalry

July 3/10: Volume 32, Issue 2

By David Romano

 

Dear David:

Screen Shot 2017-03-06 at 10.37.51 AMMy father transferred our business to my three siblings and me quite some time ago. We didn’t pay for it and all have equal ownership. I now find myself doing more for the business than my siblings. When I ask them to work harder and play a larger role they throw our equal ownership in my face. I am now considering opening a separate flooring store without them. Do you have any suggestions before I make this decision and cause more conflict?

Dear Owner,

Starting a separate company may cause even more strife than your current situation. The thought of starting a new company may get your heart pumping and sound like a good solution, but when the adrenaline wears off and you are hit with your new reality it may be more than you can handle. If you are the one carrying the largest workload, you will most likely end up with two full-time jobs because completely exiting the family business could cause irreparable harm to your family.

If your father had structured the transfer differently you could have avoided this mess. Not assigning one of you controlling interest is the main issue and is a real impediment to an effective solution. Here are some recommendations:

  • Sit down with your dad and siblings and discuss what you’re feeling. Let them know just how bad it is and that you are considering opening your own flooring store without them. During the conversation ask for a renewed commitment from each sibling. They may not know what they are doing is having such a negative effect on you or the business.
  • If they do commit, define roles and responsibilities. A clear understanding of what is expected is important for everyone whether or not he or she is part of the family. This exercise may be enough to get them re-engaged. You need to define what each should be doing and what each task looks like when done right. Check on their progress in 90 days to ensure no momentum is lost.
  • Make adjustments to how everyone is paid so they are rewarded for their direct effort. Just because you are all equal owners doesn’t mean you all need to receive the same amount of pay. If you all sell, set up a plan where each gets a lower salary and then earns commission or bonus once their salary is covered. If anyone’s function is not sales related, research what his or her position would be paid if you were to hire someone else to do the job. If the position should be paid less, pay them less. If the position should be paid more, pay them more.
  • If all else fails get an objective evaluation of the business done to find out the value of each shareholders’ stake in the business. If some are not willing to pull their weight buy them out. If you do not have enough cash to pull this off, I suggest you look at getting some funding. If you cannot get the funding you may consider buying enough equity from them to gain controlling interest.

Best of luck in this venture, and if you one day find yourself in the same position as your father where you want to transfer the business to your children do not repeat the same mistake. Have them buy into the business, assign controlling interest and be involved in setting clear expectations.

 

David Romano is the founder of Romano Consulting Group and Benchmarkinc, a group that provides consulting, benchmarking, recruiting and software solutions to the flooring, home improvement and restoration industries.

Posted on

Dear David: The cost of negotiations

May 22/29, 2017: Volume 31, Issue 25

By David Romano

 

Dear David:
I recently had a discussion with my sales associates about the current mindset of consumers regarding negotiations and the true cost of discounting. They got defensive and said the ability to negotiate is an important tool to closing sales. I disagree but need some advice or data to counter. Can you help?

Dear Owner,
Screen Shot 2017-03-06 at 10.37.51 AMThe most common stories about negotiations seem to center around sitting in front of a car salesman dickering over the price of a new vehicle. Millennials—which will soon become your largest customer base—are used to purchasing everything from music to groceries online and are changing that decades-old model. To accommodate this new type of buyer, more companies are embracing fixed pricing.

Last year Costco struck a deal with General Motor dealerships to sell 465,000 cars at fixed prices. Electric carmaker Tesla has made a practice of it, and other brands like Subaru and Lexus are experimenting with it in certain locations.

One reason is that instead of just dealing with a salesperson, millennials tend to research purchases online, visiting an average of 25 sites. That means they’ve largely made up their minds before they arrive on the lot. If this is happening at car dealerships, one must assume the same can be said for those looking to purchase flooring.

These buyers aren’t looking for a salesman; they’re looking for a customer advocate. The job of your sales team is to build rapport, establish trust, understand the features and benefits of each product and sell on value, not price.

When I owned a flooring company, I’d ask my sales staff: Do you think this customer is going to pay your rent/mortgage this month? Do you think they are going to buy you groceries for the next few months? Are they going to invite you over for dinner and the holidays?

When they’d say no, I’d ask, “Then why are you so willing to give up some of your commission to someone who doesn’t understand your sacrifice and doesn’t care?” I instructed them to stop relying on negotiating and sell on the merit of the product.

According to data from my company Benchmarkinc, the average flooring retailer generates just over $2,600,000 in sales. That company sells products at a margin just under 36%, with an average transaction around $2,200 and closes its opportunities at a rate of nearly 35%. Benchmarkinc is also able to analyze the effect certain practices have on business. Following are the results of allowing sales associates to negotiate: gross profit is 0.4% lower, average transaction is $35 lower and close rate is 0.5% lower.

Those numbers may look small, but the compounding effect is quite large. Based on the numbers above, the average number of opportunities is 3,376. If you take those 3,376 opportunities and close just 0.5% more you would have an additional 17 transactions, totaling 1,199. With an average sale of $2,235 ($2,200 + $35) you would generate $2,679,765 in sales. If you take that $2,679,765 and multiply by the 0.5% increase in gross profit you would have an additional $13,398 in gross profit dollars. For an average store generating $2.6 million in sales the effect is just over $13,000.

You can do the same exercise using an individual sales associate’s numbers and show him how much money he has lost by giving things away at a discount. When your sales team realize how much money they give away to complete strangers, I’m sure they will change their approach to negotiating.

 

 

 

Posted on

Dear David: Grow your bottom line without increasing sales

April 24/May 1, 2017: Volume 31, Issue 23

By David Romano

 

Screen Shot 2017-03-06 at 10.37.51 AMDear David:
Every time I go to convention, read articles and talk to my membership consultant I hear that I am supposed to have a 10% bottom line. However, I am not even close and I feel I run a pretty tight ship. What is a good bottom line and how can I increase my performance?

Dear Owner,
Increasing your bottom line should be top of mind every day. Getting to that optimal level of performance requires constant monitoring and swift action. It also requires an intermediate understanding of financials, in-depth knowledge of your operating system and the desire to make changes.

A bottom line of 10% is simply a magical number. There is a small percentage of flooring dealers with that level of profitability and most are either very small (less than $1 million) or fairly large (over $15 million). In fact, the average flooring store generates just over $2.6 million in volume with a bottom line less than 1%. The silver lining is the small percentage of top performers generates a bottom line of nearly 12%.

What are the top performers doing differently from everyone else? They are just running a better business. Their sales volume is nearly identical to the average, their gross profit is less than two points greater, but where they really shine is how they control all their general operating expenses. If you want to make more money you need to have better controls/systems and a lot of discipline.

Here are some industry metrics to consider when analyzing your performance:

  • Personnel costs should be no more than 18% of net sales. Top performers show this cost just above 15%.
  • Occupancy costs should be less than 6% of net sales. Top performers show this cost just below 5%.
  • Advertising and promotions should be less than 2.5% of net sales. Top performers show this cost just above 1.5%.
  • Other general and administrative expenses should not be more than 8% of net sales. Top performers show this cost just above 5%.

I would venture to say that if you took all your expenses below the gross profit line and analyzed them, you would find a way to reduce many of those expenditures. Sure, sales and margins are important, but the real opportunity lies in squeezing as much juice from all areas of the business. Following are some places to start:

Telephone. Look at switching cell carriers, transition to a VOIP phone system and limit the amount of data for all cell lines.

Occupancy. Get Nest to help control the climate, look at reducing the frequency of your disposal pickup and reconcile inventory to the proper level to reduce property tax.

Personnel. Analyze your manpower plan to see if you are overstaffed. Do a market compensation audit to ensure you are not overpaying. Switch to a pay-for-performance plan for revenue generating positions, etc.

Advertising and promotions. Review your mix of traditional vs. online media to get the best return on your investment.

General and administrative. Look at those over 20 lines and shave a bit off each. Can you reduce your entertainment budget, office supplies, insurance policies, vehicles, etc.?

I also suggest you enroll in some basic financial and managerial accounting courses. Then spend time going line by line to determine what needs to be done, when and by whom.