The Big Idea with Ron Davis
September, 2010

Success Is All in the Details

Idea of the Month

If you had just one really great idea you could share with the alarm industry, what would it be?

This month’s great idea comes from Dean Guyette, executive vice president of Per Mar Security in Davenport, Iowa.

Guyette’s Great Idea:

Know your accounts receivable intimately. You can tell how well a company is run by how current its accounts receivables are.

I guess when I first heard Guyette’s idea I was a bit disappointed. I was expecting something profound; deep, something that would change my perception of how things were done. The idea didn’t exactly do it for me.

First, a little bit about Guyette. He’s a studious, financially oriented executive who really functions as the No. 2 person at Per Mar. He and the president, Mike Duffy, handle all of the company’s acquisitions, and I suspect for the most part Guyette is responsible for the financial control of the company.

As I pondered his idea for this month’s column, I started to think about what it is that differentiates successful people in this industry from those who are not successful — or even failures. Time and time again it comes back to the concept of taking care of the little things so the big, burdensome things will never materialize.

Sales managers do it by reviewing every lead and every appointment. It’s not so much for control or even for constructive criticism of the salesperson, but rather being aware of what’s going on in the field that salespeople can control. Knowing where leads come from is important. Knowing how many appointments come from those leads is important.  Knowing how many sales result from those leads is equally as important.

In accounting and control of a company, knowing the exact status of your receivables will almost always indicate whether or not there are larger problems somewhere else in the company.

The answers to these and dozens of other questions can help you determine whether or not there is a problem in your company and provide the opportunity to correct it.

Minding the To-Do List

I’ve seen Guyette at work and how he executes due diligence in acquisitions. He is meticulous and relentless. When something doesn’t add up, he will not quit until he finds the answer. And that too is a lesson for all of us: When something doesn’t add up it’s indicative of a problem that needs to be identified.

I recall the time I received a financial report at the end of a very busy month. Anticipating a very successful month, I looked down at the bottom line and saw that we had actually lost money. What I thought was in the bank was not; the amount of cash we had to work with was bracketed with red parentheses. The time to discover such issues is ahead of time, not when you’re reviewing a financial statement.

Had I taken the time to look at past-due receivables, I would have seen that a lot of what our group was working on were pending orders, rather than actual orders for work to be done immediately. Regardless of your skills, if you look for the little things you won’t have to worry about the big things – like running out of cash. Accounts receivable is a window into the soul of your business. If the customer’s perception of your business and his willingness to pay for the services you have provided is evidenced, you probably don’t have a receivables problem.

I would suspect Guyette is a big supporter of checklists to make sure he’s not missing something. We were traveling to a meeting on one occasion and I couldn’t help but notice his focus on everything he needed. I suspect in his mind he was plotting an itinerary. As with any trip, you won’t travel far if your car doesn’t have any gas. It is equally important that a company has cash to keep the business running.

Guyette knows that. He and Duffy have built one of the largest businesses in the industry.

Ron Davis is Security Sales & Integration‘s “What’s the Big Idea?” columnist and contributing market analyst. He is president of Davis Group, a full-service consulting firm serving the security industry, which also includes GraybeardsRus. He has 35 years of industry experience, including founding Security Associates International in the 1980s.