Friday, November 26, 2010

Space Heater Business.

Space heater is a one of most important tools to endure coldness in winter. A space heater is a self contained device for heating an enclosed area. Space heating is generally employed to warm a small room in the house, and is usually held in contrast with central heating, which warms many connected spaces at once. The reason people choose space heater is because the cost of space heater is lower than the central heating.  Space heater are usually portable or wall-mounted, and may use natural gas or propane as its energy source, but are most commonly powered by electric.

Space heater can be divided into two categories where one of them is that transfer their heat primarily by convection and another one is transfer the heat by radiation. The convection heaters, heating elements either warm the air directly or heat oil or another filler, which in turn transfers heat to the air. The example of convection heater is Big buddy heater. The air then warms the objects and people in the space. Convective heaters are suitable for providing constant, diffuse heat in well-insulated rooms. Oil heaters warm up slowly but do not reach dangerous surface temperatures while wire-element heaters that fan assisted can be reach desire temperature and can warm up the air more quickly. The example of radiation heater are Dimplex compact electric stove and Dimplex electric fireplace insert.

The Radiative heaters or halogen heaters usually comprise tungsten filaments in heat-resistant quartz envelopes, mounted in front of a metal reflector in a plastic case. They operate much like halogen light-bulbs, but radiate their energy primarily in the infrared spectrum. They convert up to 86% of their input power to radiant energy, losing the remainder to conductive and convective heat. The main advantage of radiative heaters is that the radiation they produce is absorbed directly by clothing and skin, without first heating the air in the space. This makes them suitable for warming people in poorly-insulated rooms, or even outdoors like a hall or garage.

The space heater that powered by electricity usually has ceramic or Nichrome heating elements, and may be fan-forced with a blower or a squirrel-cage fan to improve heat transfer. These often employ efficient heat pumps, which use reverse-cycle air conditioning to transfer heat to the inside from the outside. The other type of energy source is natural gas such as propane, butane, or liquefied petroleum gas. They may be convective or radiative, in the latter case by heating a matrix which then emits infra-red radiation. Gas heaters burn their fuel in air and produce carbon dioxide. In well-insulated rooms the oxygen concentration may drop and carbon monoxide may accumulate to toxic levels due to incomplete combustion. For this reason gas
heaters should be used only in rooms with adequate ventilation. But new technologies such as Big buddy heater and Portable Kerosene Heater have an ability to control the carbon monoxide level in the room.

As conclusion the space heater business should consider the type of space heater and its operating manual. This is important for the seller to suggest the most suitable space heater for their customer and provide the safety guide to operate the space heater. The knowledge from the seller will increase the customer trust and this will turn them into loyal customer. Beside that the basic technical skill about the space heater is really worth to help the customer if they have a problem with their

space heater.

Therefore I suggest 4 most compliance space heater:

Dimplex compact electric stove
Dimplex electric fireplace insert
Big buddy heater
Portable Kerosene Heater

Thursday, November 25, 2010

Benchmarking: Avoid comparing yourself to the industry average.

Most organizations conduct employee surveys of various types either annually, every two years or sporadically. Some organizations use the data from the employee survey to affect real change that contributes to their ongoing success. There are organizations who like to focus on comparing their survey scores to the scores of other organizations and there are the organizations that do little with their survey results. The focus of this article is to discuss the middle group: those organizations that like to focus on and compare their employee survey scores against the average scores of all the organizations that are in a third party database.

Many surveying companies sell their services on the basis that they will be able to compare the scores of the one company against the average score of all of the organizations in their database. Comparing yourself to someone else is enticing. We have been exposed to comparative data from the first day we stepped inside a school. Throughout our primary and secondary education we were compared to the rest and typically this comparison was against the “class average”. We knew who the smartest and the dumbest kids were but it was the average that counted. Was I above or below the class average? That was important in terms of dealing with our own self esteem and dealing with our parents. This was not the case for all students. The parents of some students demanded top marks and that is exactly what those few students worked towards. They had to be the best. They had to have the top marks.

This was all very interesting but in the end it was irrelevant. When it came time to apply to university a new standard had to be reached. University entrance requirements varied but one thing was clear. Average marks were not good enough. In fact being above average in many instances was not good enough. University entrance requirements were demanding and one had to strive for a new and much higher standard than “average”. The profile or status of a university that you were interested in attending, determined the level of academic excellence you had to achieve.

It is puzzling to see how many organizations fall into the trap of placing a great deal of emphasis on comparing their surveys scores to a database that represents the average of a number of companies. These comparisons are sought not only for the overall scores of the employee survey, but for every question in the survey.

It would appear that a fundamental question needs to be asked by every organization-why are we conducting an employee survey in the first place and what are we going to do with the results. 

From a strategic perspective it would seem reasonable to think that an organization would wish at the very least, to demonstrate that the survey is helping the organization to achieve their strategic goals. In other words, they are conducting the employee survey as a way of obtaining employee information that can be used to improve for example, workplace practices in order to lift their employees’ working experience. In turn this will lift the customer experience and profits.

However, if this or some other strategic purpose is not being fulfilled by the employee survey than the value of conducting the survey is questionable. One could argue that comparing oneself to other organizations is in fact a legitimate strategic objective. It is worth knowing how you compare to the best. How does your stock performance compare to the best in your business sector-not the average of all the companies in your business sector but only the best? How do your employee survey scores compare to the best in your business sector-not the average of all the businesses in the database but only the best? 

Comparing oneself to the very best is legitimate especially if the best sets a benchmark that you adopt as your own. But to compare oneself to the average serves no useful purpose. If a senior management group knows that their scores are better than the average of all the companies in a database, strategically of what use is this information. Perhaps it may give them a sense of pride knowing that they are better than the average. But it may also lull them into a false sense of confidence. The question that should be top of mind is “are we really as good as we can be and are we really achieving a level of excellence that will sustain us over the long term.”

For example, employee turnover in the retail sector is fairly high. Most retailers take it for granted. Entec Corporation has been working with Gap Inc. Canada for several years. Gap offers excellent training programs especially for their associate managers and store managers. In 1999, Gap was routinely being raided by other retailers and their annual turnover rate for store managers was 39% and for associate managers it was 48%. This was costing Gap hundreds of thousands of dollars each year in recruiting and training. With over 200 stores and 10,000 employees across Canada, these costs were unacceptable. Entec Corporation was engaged by Gap to conduct an Organizational Health Survey. Gap acted upon the recommendations in the survey and was able to reduce manager turnover rates to 13% in one year.

But these lower turnover rates were accompanied by real business gains. For example, secret shopper scores increased by 5% after only eight months and sales in Canada over the last few years have improved to a level where the Canadian operation moved from being about in the middle to becoming one of the most profitable divisions in the world. The survey results were linked directly to the bottom line.

If Gap accepted “the trap of comparing themselves to the average” and accepted the conventional wisdom that “this is the average turnover rate in retail so we are OK”, they would not have saved thousands of dollars each year in training and recruiting. More importantly they would not have experienced the benefits that reduced turnover brought them; namely preserving human capital of highly trained managers that helped to grow Gap’s business. This last point is typically overlooked. The impact of a reduction in turnover of well trained employees to the bottom line of a company is considerably higher than the cost savings achieved from reducing recruiting and training.

Several points need to be considered when embarking on an employee survey: 
1.    Develop clear strategic objectives
2.    Measure towards those objectives
3.    Inform your employees of the survey scores
4.    Follow up with positive implementation
5.    If you must compare yourself to others, compare yourself only to the best

If this process is not followed the organization can expect:

1.    Employee participation rates in the survey to be low (30% or lower)
2.    Rising employee cynicism with the organization (why bother if the activity of completing an employee survey does not make a difference) 
3.    Employees become disengaged from the organization
4.    The organization loses an opportunity to make significant strides in performance  

Conclusion

The trap an organization falls into when they become focused on benchmarking themselves against others is that they lose sight of what is really important-what is it that we are doing well and where do we need to improve in order to create an even better organization than the one we already have. If you must compare yourself to others, compare yourself only to the best and do not get side tracked.

Saturday, November 20, 2010

Cash Flow Planning for Solo Professionals

You’ve heard it a million times – cash flow can make or break a business.  Lack of cash flow planning is the reason why many businesses fail.  In fact, many PROFITABLE businesses fail because of cash flow issues.  Without adequate cash flow, you can’t pay your bills and you can’t make plans for your business. 

So… what is cash flow planning?  Cash flow planning is projecting your future cash inflows from sales, services, and loans, and comparing them to your future cash flow needs (suppliers, salaries/wages, loan payments, taxes, etc.).  The difference between the two is your net cash flow.

Why is cash flow planning so important?  Cash flow planning can help you identify problems down the road, and fix them before they occur.  Cash flow planning can also help you make decisions such as should I attend that conference I’ve wanted to attend, should I buy the new computer I’ve been wanting, or do I need to work extra hard this month to avoid a cash flow deficiency next month? 

The first step in planning your cash flow is knowing where you spend your money!  Solo entrepreneurs need to have a good grip on both their personal and business spending, as most solo entrepreneurs rely on their business income to meet personal finance goals (i.e., pay the bills!).  So, you should track both your personal and your business spending, although I recommend that you keep them separate (that’s a topic all by itself).

What’s the best way to track your spending?  You can use pen & paper, spreadsheets or a software program.  The best method for you is the method that you will actually use on a regular basis.

You should project your spending for at least the next 12 months so that you include annual and other periodic expenses.  If you are experiencing a cash flow crisis, you should track & project your cash flow on a weekly basis, instead of monthly. 

If you are an existing business, you can project your cash flow for the next year by reviewing your expenses for last year.  If you are a new business, you will need to estimate your start up costs in addition to regular operating expenses. 

Start up costs include inventory, legal expenses, advertising, licenses & permits, supplies, and many more costs that you may not have thought of.  To research startup costs you should contact your local Small Business Development Center, contact a SCORE counselor, join groups of similar business owners, and read as many books or articles you can find on the subject.

To improve your cash flow, you should:

1. Complete the first 3 steps.  You have to understand cash flow planning, track your cash flow, and project your future spending needs before you can improve your cash flow.
 
2. Create best and worst case scenarios and create appropriate responses to both scenarios.  For example, if your best case scenario is to increase sales by 50%, how will you use the profits?  Will you put the profits back into the company by investing in new equipment, training, etc.?  If your worst case scenario is a drop in sales by 50%, how will you continue to cover your monthly expenses?  By planning for the best and worst case scenarios, you’ll be ready for any situation.

3. When estimating your future income, realize that some people will pay late, and account for that fact in your projection.

4. Charge what you’re worth.  Many businesses, especially service professionals, under-charge when they are first starting out.  This is a great way to go out of business.  Make sure you are charging what you’re worth, and remember you’re in business to make money, not to give your expertise away for free.

5. Watch your business spending.  Focus on the value the item brings to your business, and avoid lavish spending (i.e., do you really need the fastest, newest computer available?).

6. Don’t hire until necessary.  Consider using virtual assistants or temporary employees before hiring permanent employees.

7. Give incentives for early payment for products and services.  On the flip side, chase down invoices the minute they’re late.  Charge interest or late fees to encourage timely payments.

8. Update your cash flow regularly.  Your cash flow plan will change frequently as your business grows.  You may want to update your cash flow plan weekly when you first get started, then switch to monthly once you’ve got a good handle on your cash flow.

Remember - whether you are a new or growing business, your cash flow projection can make the difference between success and failure.