Overcome Your Business Problems by Dealing With the Problems, Not Ignoring Them
Richmond Alarm Co. President Wayne Boggs describes how to problem solve and when to take risks in the market.
I’ve known Wayne Boggs, president of Richmond Alarm Co. (RAC) in Richmond, Va., since the early 1970s. We’ve been partners, along with his younger brother Jimmy, on several business ventures and we’ve all been friends from the moment we met.
Soft-spoken, seemingly introspective and certainly knowledgeable, Wayne Boggs has done at all. Now, at age 68, he has the advantage of looking at the security landscape with a keen eye and insight from decades of experience.
RAC has been around since 1947, and was founded by Wayne and Jimmy Boggs’ father, Samuel Boggs, a true entrepreneur. Both boys joined the company as soon as they were old enough to strap on a tool belt or sell an alarm system. The company grew, and I recall visiting them in the early 1970s when they retained my firm to perform an overview analysis of their business. By that time, Wayne and Jimmy Boggs had pretty much taken over, and I spent most of my time with Wayne.
Analysis Reveals Key Deficiency in Subscriber Fee
I recall that early on I asked him a typical consultant’s question: If you could identify just one problem that you would like to solve with this visitation, what would it be? And while I don’t remember the exact wording, his answer had something to do with the fact that they weren’t generating enough revenue to meet their expenses (sound familiar?) and didn’t know what to do. Borrowing from a bank was out of the question because back then banks didn’t lend on a book of RMR.
We spent the next few hours going through the business and eventually I discovered that their monitoring fees, which had been established in 1947, had not changed. I hope the Boggs family will forgive me if I’ve missed the exact amount, but as I recall the monitoring services for an individual subscriber was $12 per month. RAC had its own central station, of which Wayne was rightfully proud. Unfortunately, with the size of the account base, it was a money-eating, negative profit center.
I asked him, “If I could solve your cash flow problems with some advice, would you take it?” He agreed and I told him to increase his monitoring charges by $5 per account, per month. That would bring them up to breakeven. Then I suggested they close their central station and move their accounts into a wholesale monitoring provider, thus saving a fair amount of overhead. They agreed with the first piece of advice, ignored the second and were on their way to building the business that we see today (certainly the largest in Richmond, and one of the biggest in the region).
Don’t Lose Sight of Risk-Taking Rewards
Boggs’ “big idea” for the industry is twofold: “First, this business is not rocket science … and not dealing with problems IS the major problem that many businesses have. Second, somehow when a business has grown to the size of many in the medium size bracket, their owners don’t take the risks that they did when their business started. And as a result, the momentum that was there in the beginning has been lost, thus leaving senior management in a quandary as to what to do next.”
Let’s take a look at dealing with problems related to customer service. Customer A calls, for the umpteenth time in the past 10 days, with one problem or another. It’s becoming unpleasant to talk to customer A. You don’t return the call, ever. And the customer never calls again. When it comes time for renewal, customer A has become customer gone. At the same time, customer B is having a problem, does not call and eventually the problem goes away. And so does customer B when it comes time for contract renewal.
Books have been written about how to deal with these kinds of problems, but just remember that the best way is to actually deal with it. It’s not going to go away by ignoring it; in fact, ignoring the problem is more than likely exacerbating what it is, which creates a bigger problem. If this is an issue for your firm, place a big “DEAL WITH IT!” sign on the back of the door to your office and follow the advice.
Boggs also has a way of dealing with business risks. Anytime he looks at an opportunity that has some risk attached to it, he asks himself, “What’s the worst that can happen?” If the worst is something he could live with, more than likely, he will take the risk. When faced with whether he should expand his central station services with wholesale monitoring, Boggs looked at the worst that could possibly happen, decided to take the risk and RAC now has one of the premier wholesale monitoring companies in the region.
Eliminate problems, take risks, enjoy the benefits. Not a bad entrepreneur’s creed.
Next: 3 Young Security Execs Reveal Their ‘Secret Sauce’ and What Keeps Them Up at Night
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