Tara Vagen October 23, 2008 Highline Community College

Utilization Valuable method of assessing trainer productivity - self employed or employee Universal definition: –The percentage of production capacity which is actually used over a period of time –The relationship between actual output and potential output Common business measurement in industries where “time is money” Familiar examples: –law firms – bill in 6 minute increments –consulting firms – bill in hours or days

Utilization for Trainers Determine work schedule Fill schedule Measure utilization Optimize utilization

Determine Work Schedule Set limits, establish schedule, stick to it Evaluate single work location versus multiple locations Be realistic Don’t forget to schedule breaks - clients expect you alert and focused on them!

Fill Schedule Strive to minimize gaps Stick to your work schedule without necessarily revealing your constraints –“I have 8am and 2pm open on Monday” implies you are busy the rest of the day, without revealing that you have to leave at 3pm –Give clients a couple of choices

Measure Utilization Revenue generating hours / total hours # clients seen / # hours scheduled to see clients 4 clients in an 8 hour scheduled day = 50% utilization NICE … ½ of time is generating revenue BUT … potential to generate up to 100% more revenue within set work schedule Set target utilization and measure regularly! (75% utilization is a very reasonable target for trainers)

Optimize Utilization Fill your schedule Get recurring clients and minimize gaps –“8am has opened up – would you like to move from 2pm to 8am?” –“If that time works well for you, let’s lock it in through the month” –“That’s a popular time; do you want me to hold it for you for xxx timeframe?” Have a “to-do” list for downtime and cancellations The list should include MORE revenue generating activities than other activities Know your number and watch it go up!

Revenue per Hour A variation on utilization Saw 10 clients in 8 hour day: –4 one-on-ones at $75 each = $300 –1 one-on-one at $65 (legacy rate) = $65 –1 small group of 5 at $25 each = $125 –Total revenue for day = $490 Key measurements –Utilization = 75% (6 hrs booked of 8 hr day) –Revenue per hour “billable” = $81.66 –Revenue per hour “scheduled” = $61.25

Automation Big bang areas –Accounting –Tracking –Payments –Scheduling Other – web site, marketing software, etc.

Automation: Accounting Not to be confused with Tracking (spreadsheets) You CAN run your business with spreadsheets alone – not recommended Recommendations: –Start with an accounting system from Day 1 –Have accountant set up company and accounting system; consider having an accountant do your annual taxes; take the time to learn your accounting system to minimize accountant fees –QuickBooks (QB) from Intuit –Skip the up sell items from QuickBooks

Automation: Tracking Know your business –Small business owner should know monthly revenue; revenue trends; expense run rate; high/low expense months; utilization Recommendations: –Can track most through accounting system standard reports but not easy to add other data like utilization or averages –Microsoft Excel spreadsheet software is great for combining data, slicing and dicing

Automation: Payments Trainer could easily see 30+ clients a week; 30+ payments to collect Can be a tracking nightmare… –Suzy comes in with Jane most weeks and pays $45 –Jane got sick; Suzy’s mom already made out check for $45 but Suzy owes $75 today –How are you going to remember to tell her to write a bigger check next week? What if she doesn’t? –What if it happens to 5 others in a month? That’s 60 events in a year  –Or the check bounces, or the sales tax rate changes, or you misplace some checks, or forget to track cash payments, or cash is stolen…(these are all real live examples)

Automation: Payments Recommendations: –Seriously consider accepting credit card payments –Two components – 1) cc clearing house, 2) cc POS –Credit card clearing house – we use Authorize.net –Credit card POS (point-of-sale) – lots of options – we use the feature in our scheduling software –Rates vary considerably – shop around –Go for Visa and Mastercard only Benefits: –Increased client satisfaction (don’t have to worry about having the right amount) –Decreased accounting costs more than make up for expense – easier to track; download into QuickBooks; less errors

Automation: Scheduling Single best administrative time saver Recommendations: –Web based so it can be accessed anywhere by anybody –Automatic reminders –Evaluate whether or not to use client online scheduling –We use Appointment Plus Benefits: –Greatly reduced no shows with automatic reminders and cancellation policy stated in reminders –Increased trainer and administrative productivity with online scheduling - no phone tag! –Download appointments to tracking spreadsheets Most don’t automatically interface to QuickBooks Watch the fees!

Questions