We are often asked if shops should wait to sign up for the Velocity Pricing System until they improve their cash flow, their level of sales improve, or they may be hesitant to sign up if their shop has just lost a customer.

Our advice would be to go ahead and contact us to request a free Strategy Session sooner, versus later. The reason being is that the Velocity Pricing System can help you no matter where you are – whether you’re making money, treading water, or taking on water.

We have a proprietary pricing model that makes the Velocity Pricing System a great value. In fact, our pricing approach is so unique that we only disclose it once we are under a Mutual Non-Disclosure and Confidentiality Agreement on a free Strategy Session.

If you’re interested, contact us to request a free Strategy Session by clicking here.

Which of the two Systems you decide to implement first is up to you and largely dependent upon your situation. The Systems are complementary to one another and we find that when done together clients enjoy improvement in both their operational and financial performance.

Although they can be done independently, we see the two Systems acting as catalysts for one another: not necessary, but when done together they dramatically increase the impact of either one done individually.

Do the Velocity Scheduling System first if long lead times and low due date performance are jeopardizing your performance the most, as it helps your shop “get more jobs done faster with the same people and resources” (cut lead time and get on time). When your operations are responsive and reliable the Velocity Pricing System can then be implemented to help you translate the responsiveness and reliability that VSS has created into better profitability.

Alternatively, do the Velocity Pricing System if you are struggling financially or are up against stiff competition with your pricing. As we go through the Velocity Pricing System, it’s not uncommon that we find that VSS can be one of the most impactful productivity improvements a shop can make which can be leveraged in their pricing.

Thus, it really depends on your starting point and the most pressing challenges that you’re facing.

Now, if you are able to implement only of the Systems, but do not have the support for the other at first, that’s fine too – start with the System your team is willing to try. There’s no disadvantage to this route and it’s likely once your team goes through either System your team will see the tremendous value that the other System can bring to your shop.

When done together, you will be positioned to capitalize on the unique value of having both Systems implemented together. With the Velocity Scheduling System (VSS), you are able to “get more jobs done faster with the same people and resources”. With the Velocity Pricing System, you have “a complete system to understand your capacity and job costs so you can quote faster, win more work, while ensuring every job is profitable.”

Taken together VSS gives you significantly improved productivity that can be capitalized on with the Velocity Pricing System to substantially increase your Net Profit.

Yes. The Velocity Pricing System is designed to help you price the most complex type of work out there – the type of work found in a job shop. If you have production work, although not as demanding as job shop work typically is, your production work can also significantly benefit from the tools, techniques, and insights provided by the Velocity Pricing System. It’s why we call it a complete system to understand your capacity and job costs so you can quote faster, win more work, while ensuring every job is profitable!

If you’re interested, contact us to request a free Strategy Session by clicking here.

Yes, definitely. In fact, we find that the Velocity Pricing System can conquer the complexities, challenges, and extraordinary environment of MRO and field service very well. We have had many clients in these fields work with us and we have developed industry-leading pricing solutions to their unique problems.

What makes shops that work in MRO and field service so unique is the very intractable problem of how to use the same resources to be reliable and responsive at the same time. The Velocity Pricing System has a unique solution that is an integral part of how shops that do MRO or field service work should approach their pricing.

Yes.  In fact, the more specialized you are, the greater opportunity we believe exists.  We love to find job shops that run what we call “custom-custom” jobs because we believe they create a greater opportunity for a substantial increase in Net Profit.

Together, we will determine what is “the essence” of what you do.  While your job shop is undoubtedly complex, the Velocity Pricing System will help reduce the “noise” and help you sift out what’s critical to your pricing system. And with this understanding of what is critical to your pricing you can then enjoy a substantial increase in your Net Profit.

Yes, and Yes.  After working for larger companies with access to excellent resources, Brad bought and owned a small job shop and was appalled by the lack of world-class consulting resources available to smaller job shops.  And when he could find the resources, they were invariably very expensive.

So, learning from that experience, the Velocity Pricing System is affordable for job shops of all sizes.  The online conference calls avoid the need for expensive travel and expensive day rates. 

The time saved means we can more effectively help you implement the Velocity Pricing System.

No, the Velocity Pricing System is not about getting rid of “unprofitable” customers.

Throughput Accounting provides a totally different perspective regarding the meaning of “unprofitable”. The Velocity Pricing System system explains this new paradigm and provides the tools you need to select the “winners” and not “losers”, in terms of both customers and jobs.

It’s likely that the customers and jobs you consider to be “winners” and “losers” today may not be the “winners” and “losers” under the Velocity Pricing System. In fact, it’s likely that some of the “winners” are “losers” and some of the “losers” are “winners”.

But, please realize there is a lot more to it than that, which is all explained in the Velocity Pricing System.

Raising prices is very risky.  It could jeopardize not only the job, but also the customer.  It is hard enough to win the business in the first place, so raising prices must be done judiciously, if at all.

All the other options should be evaluated first.

For example, we are going to tell you to improve productivity.  We want you to improve overall productivity, and productivity on individual jobs.  Especially for those jobs that that are not performing as well as other jobs (see #2 above).

We want you to understand your preferred market segments and preferred job mix.  We want you to have a robust sales funnel full of excellent opportunities.

We want you to understand your competition.  We want you to understand how their insistence on using cost accounting has blinded them to opportunities and provided you a price umbrella on a significant amount of business that would be a good, profitable fit for your shop.

Once you have done that, maybe there will be some jobs that do require price increases.  But we will not have to tell you.  Rather, with all the information in the Velocity Pricing System you will be telling us which jobs, why, and by how much with confidence, clarity, and strength of purpose.

During the Strategy Session, we will discuss what might be possible for your job shop as we review your financials presented in a Throughput Accounting format.

Our starting assumption is that Net Profit can be increased by as much as 10 percentage points in the first year of implementation and then to 20% or more Net Profit over time.

(Note: we don’t mean a 10% or 20% increase in Net Profit. We’re talking about taking a shop from a 5% return to a 20% return. That’s a 4x increase in that case. You may be saying this is crazy or unbelievable, but click here to check out the Success Stories to see for yourself.)

Of course, there are a myriad of factors that may affect that negatively. We want you to be prudent.

Our aim is to help you maximize your profitability without you taking real risks in a competitive marketplace.  You are always in control and decide what prices you quote. 

If you’re interested, contact us to request a free Strategy Session by clicking here.

We could go on and on about how we look for win-win solutions, how we’re both under ethical obligations to various professional bodies, our personal values, mission statement, etc. We ourselves have experienced that too many times, people will say those things and not actually mean it.

To be honest, until you have a free Strategy Session with us, you don’t. We’re confident once we get to know one another during the Strategy Session and we walk you through our pricing model, you’ll see that we’re different and not making false promises.

If you’re interested, contact us to request a free Strategy Session by clicking here.

One opportunity to increase your win-rate will come from selecting the type of jobs and market segments you prefer.  As you become expert at these, and “no-quote” jobs that are not a good fit, you have a higher chance of winning the quotes that are a good fit for your shop.

Another opportunity to increase your win-rate is quoting with “competitive” times.  If you have ineffective equipment and people, you are probably using your actual times in your job cost estimating and quoting process.  That is a recipe for losing the quote! 

But losing the quote might actually be preferred, because the margin on the job using your ineffective resources might be very low – too low.  You may be better off to “no quote” these jobs as well. It all depends on your Special Circumstances.

Yes!  In fact, in many cases we do not recommend price increases for this and a number of other reasons.

Knowing how to significantly improve productivity is one of key benefits when “The Number” is used as the prime measure for your shop.  What this means is that you can substantially increase your Net Profit through gains in productivity – not in price increases.

“The Number” is only found in the Velocity Pricing System.

It’s likely you’re saying to yourself, “Everyone has a little bit of wiggle room in their pricing – no surprise there – but our shop is under contract for most, if not all the pricing on our jobs. We literally just can’t raise prices because we’re under existing contracts with our customers.”

Well, as you know, there are many things that impact your pricing, and what you charge is an outcome of all those factors.

Well, suppose you were to begin to differently manage those items which impact your pricing: operations, marketing, quoting methods, etc. You may find that you can make the money you want without raising prices – truly a win-win scenario.

For example, we worked with a company that co-developed products with big chemical companies like Dow, DuPont, and 3M. The big companies would send in their teams to develop the product, and in so doing they knew everything about the customer’s process: the cost of material, the machines they used, the speed of the machines, output each hour, so on and so forth.

Would you believe they are one of the best examples we have of how to make more money without raising prices? That’s exactly what they did – they made more money without raising prices (or buying a machine) – despite being under contract and literally not having any ability to raise prices. To learn more about their success with the Velocity Pricing System, click here.

We’ve seen these circumstances before and have designed the Velocity Pricing System to incorporate all aspects of your shop that influence your pricing. It’s all inside of the Velocity Pricing System.

Don’t let this stop you from taking the next step, contacting us to request a free Strategy Session, and substantially increasing your shop’s Net Profit.

It’s not an obstacle we can’t overcome in the Velocity Pricing System.

A common concern companies have before starting the Velocity Pricing System is the quality of their data. Some companies have excellent data, while most have somewhat suspect data, and a few have unreliable data.

However, we can work through the process effectively no matter what quality of data you have because we can make some reasonable estimations when and where required, and/or you can make improvements in your data tracking during the implementation.

It is not necessary to implement a new ERP system before starting. In fact, while implementing the Velocity Pricing System, many companies alter their existing ERP implementations to better fit their new pricing systems.

It’s a good question to ask, but we approach this question from a totally different paradigm.

You see, many of the costs you’re probably referring to we don’t consider to actually be “costs of a job”. Costs like direct labor and overhead.

That doesn’t mean we aren’t going to cover those costs – we certainly are, plus a healthy margin as well – we just have a completely different and better system to cover those costs and produce a profit.

You can dedicate as much or as little time as you want to because we go at your pace. 

Most of the homework assignments take a few hours, at most, to prepare by someone who is good at spreadsheets.  Those trusted employees that prepare the homework really seem to enjoy the challenge and opportunity to show their skills.

Many times, you’ll find the analysis so informative that you’ll continue to enhance the analysis above and beyond our initial request.

We find that many clients take time and make the time for doing their homework in the Velocity Pricing System as it establishes the key priorities that the shop as a whole is working on as it’s doing what other initiatives have failed to do: substantially increase their Net Profit.

The Velocity Pricing System is delivered by Brad Stillahn and Beau Ganas, Throughput Accounting Pricing Experts, Science of Business, Inc.

Brad developed the Velocity Pricing System and has years of experience helping job shops customize it to account for their Special Circumstances.

Beau has furthered the system developed by Brad and helps brings owners into the new “Throughput World” paradigm of the Velocity Pricing System and away from the distortions of the “cost world”.

He’s also a CPA and Certified Management Account (CMA) who is expert at Throughput Accounting, Cost Accounting, and Information Systems.

Together, they’ll help you implement the Velocity Pricing System.

There’s no “right answer” per se, but allow us to explain a few situations where we’ve had tremendous success and hopefully you can determine what’s best your shop.

Core Team Approach

We’ve had many shops that bring together “core team” to go through the Velocity Pricing System together. They meet as a group and discuss what they’re learning and the improvements they wish on our calls.

With this approach, there emerges one person who takes on the task of preparing the homework for our calls. Typically, they have strong Excel skills and are considered key employees. This person generally has a bit of the “inside track” as to how the business really operates and find the homework to be good opportunity to showcase their skills and knowledge.

Many times, when using this approach, the shop we’re working with may use our calls as management team meetings as they find that we’re working on the highest priority issues for the shop as a whole. This can be an effective approach if you have a close management team that works well together.

Lone Ranger Approach

Some shops don’t have a large team, or the owner may prefer to go through the Velocity Pricing System and then communicate the insights throughout the shop, as they implement improvements.

We often find that many shop owners have a key employee they see as a trusted advisor in the business and may have that person join them in working on Velocity Pricing System.

This can be an effective approach is you’re a smaller shop or if other members of your management team have limited availability.

Situational Approach

The Situational Approach is a hybrid of the other two approaches described above. We’ve had some shops that have the owner and perhaps a key employee or two on each of our calls with other select members of the team joining the calls as they pertain to an area of the business they are involved with.

For example, if we were discussing sales, perhaps some of the salespeople and sales support personnel may join a call. In examining your operations, it may be useful to have the shop manager, foremen, and other such individuals on a call.

This approach allows for a core team to work with us in planning improvements while brining in the experience and expertise of others in the company as needed.

We find this approach to be particularly useful when English is not the primary language of the team or time zones preclude everyone from being together at the same time.

Hopefully you can use the above illustrations to determine what’s best for you and your shop. Also, keep in mind we can discuss this during the Strategy Session.

If you’re interested, contact us to request a free Strategy Session by clicking here.

As much as it takes based on a professionally respectful relationship and with the assumption that you’re committed to doing what’s required in the Velocity Pricing System. 

We provide all the necessary knowledge transfer, guidance and coaching, and also make resources available to you for tailoring the Velocity Pricing System to your shop and your Special Circumstances.

Once you “get it”, you’ll be doing the customizing and then checking with us to make sure you got it right and you aren’t taking unnecessary risks.

We’re in this for your success over the long haul.

No, not unless you want to. We recognize the value of having your team aligned to good measures, but we are not fans of open book management.

We have a unique set of measures that we provide to you in the Velocity Pricing System that gets your team focused on improving, without having to see or understand your b.

Thus, for the shop owner that wants to keep the financials private, the Velocity Pricing System has been designed so that your team has the right measures needed for success and you’re able to maintain confidentiality over your financial statements.

Thus, there’s no need for everyone at the shop to know the company’s bottom line, yet we can still help you substantially increase your Net Profit.

First: Read the eBook –>  Second: Watch the webinar –> Third: Contact us to request a Strategy Session.