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Why should you choose to use RCM analysis, or reliability-centered maintenance, in your facility?

Mainly, you need RCM because it’s an important strategy. Designed for use at the corporate level, RCM analysis enhances your facility’s overall maintenance strategy. When a company has implemented an RCM program, the company becomes more productive. That’s because it becomes easier for managers to make better decisions that lead to time and cost savings.

However, many business owners have their doubts. “Why should I invest my money and time to purchase software programs, gather teams, conduct research, then chase a new plan of action? After all, I already have a pretty good maintenance plan. And besides, I already feel like I don’t have enough time to run my operation properly. How could I possibly find time to make these changes?”

If you have these questions, you’re not alone. As a matter of fact, many business owners are skeptical when they first hear about the importance of investing in CMMS maintenance software and implementing an RCM analysis program. However, in this article, we hope to show you that an effective RCM analysis program can save your company both time and money. (CMMS, by the way, stands for “computer maintenance management system.“)

Four Principles Important for an RCM Program

Four principles that are important for an effective RCM analysis program:

• The ultimate goal is to preserve the functionality of the system.
• Managers need to fully recognize all of the failure modes that affect the functionality of the system.
• Management must set priorities for each failure mode.
• Management must also choose effective and applicable tasks to control all of the failure modes.

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Achieving Your Targets with the Help of RCM Analysis

When your company’s maintenance is centered around reliability, your team can begin to recognize the organization’s most important functions. Then they can choose to enhance and improve their maintenance strategies. When they do, the number of system failures is reduced. Moreover, the reliability of all machines and equipment improves.

Additionally, your team will learn that those assets that have higher chances of failure are the most critical. They will then learn to use the most effective techniques in order to boost the reliability of your entire facility.

One advantage of RCM is that when you implement RCM analysis, more machines and equipment become more available more of the time. This reduces your costs for resources and maintenance. For example, by using RCM analysis, several companies, including Jardine and Tsang, have successfully reduced their maintenance costs by as much as 45%.

However, a disadvantage of RCM is that it does not take the entire cost of maintaining and owning an asset into account. This includes those ownership costs such as evidence-based maintenance.

Optimizing a Maintenance Plan by Utilizing RCM Analysis

The steps for optimizing a well-managed maintenance plan utilizing RCM analysis include:

• Selecting the right equipment
• Determining the function of each piece of equipment
• Recognizing any failure of functions
• Recognizing the possible effects of these failures
• Identifying the causes of failure modes
• Determining the maintenance jobs that will meet the needs of the failure modes

A Final Word

Overall, RCM analysis is a technique that brings together all of the information necessary for understanding the way in which each piece of equipment best performs. Moreover, an RCM program defines the actions necessary for boosting a machine’s uptime while reducing effort and cost to the least amount possible.

You can best apply RCM analysis when you understand the failure rates of your equipment. Moreover, RCM requires a disciplined team that carefully analyzes the data and continuously develops the company’s maintenance plans. Moreover, it does so in alignment with your company’s policies as well as with governmental rules and regulations.

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The decision about how you should be billing your clients is an important one. This is true for many business areas, such as IT, design, and architecture.

There are two common approaches: billing by the hour or billing a flat rate for each project. Each option has its benefits and its drawbacks. Let’s try to figure out which approach is best for your situation.

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Billing by the Hour

Hourly rates are the most transparent way of billing. Your clients can be sure that you are not overcharging them. Moreover, they will be assured that you’re not billing them for time your workers spend on Reddit. That’s because time tracking software makes every bit of work traceable. So when clients have questions, you can show the in detail what you were doing all that time.

With this method, managers can count and bill every minute workers spend on a client's project. Therefore, emails, phone calls, and any changes to the work brought about by clients’ modifications of their requirements will end up appearing in the invoice.

Importantly, hourly billing decreases your risks in case the work takes longer than you first estimated. However, your reputation is at stake as well. With an inaccurate estimate, you could have a dissatisfied client.

However, the most important drawback to billing by the hour is that you’ll have too many details. Many clients prefer to know only the overall figure, not what you had to do to arrive at it.

Another drawback is that you might have a more productive team than your competitors. In this case, you might end up with less income for the same amount of work, just because it takes you fewer hours.

And finally, it is difficult to explain hourly rates that are higher than average. That’s because you might have a hard time proving that your team performs better than your competitors.

Flat Rate per Project

The main benefit of this billing method is that it gives clients more certainty about the total cost of the project. For instance, if you tell a client that you'll do the project for $4,000 and your competitor's rate is $40 per hour for the same work, it can be difficult for the client to understand which offer is better for them. However, the flat rate is a perfectly understandable scale.

One of the drawbacks of this method is the risk of spending more time than you planned. And even if you include risks in the cost of the contract, there's still a possibility that you won’t bill for all of the time you spend a project because of poor time tracking.

Additionally, a fixed rate billing method is not transparent. Some clients, such as official governmental bodies, need a detailed report of all performed work.

But the biggest drawback is that a flat rate often seems unreasonable or unaffordable. There is a chance that a customer prefers an offer from your competitor that has clear hourly rates. So make sure to do some market research before you bid on a project. You need to know the common billing method in your area.

Is It Possible to Combine Both Methods?

Actually, a combination of both is what many companies choose. They combine a fixed rate for simplicity and detailed time reports for better transparency. A popular approach is to give the client an estimate of planned work and an approximate total cost.

But make sure to estimate as accurately as possible. You could lose money if your bid is too low and you have to end up doing the work for less than it’s worth. But if your bid is too high, you might not get the job.

Summary

The choice of client billing method depends on the nature of your business. Think about what will bring more value in the current market situation. And finally, consider what will positively influence your relationships with your clients as well as what method will best motivate your team.

The post Billing Your Clients: Should You Charge by the Hour or per Project? appeared first on Business Opportunities.

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When is the right time to get a small business loan? Well, that depends.

The right time might be when you expect to have a flurry of business and need to increase your inventory. Perhaps you need to hire more staff. Or maybe you'll need a small business loan when you need to expand. On the other hand, maybe you'll need a small business loan when you need some cash to cover unexpected expenses.

But there are other factors to consider as well. For example, variations among industries and business types can also affect how you search for the right loan and when you should do so.

Moreover, you don't always have time to work through a lengthy loan process. Fortunately, fast business loans and funding can provide you with what you need in minimal time. You can get approval for your small business loan, often within twenty-four hours.

Let's look at some of the various factors that can affect the time when you should look into taking out a small business loan.

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In the Healthcare Industry

People in the healthcare industry understand that patient volume ebbs and flows throughout the year. For example, many people try to cram all their visits into the last few weeks of summer vacation. That’s when kids need updated immunizations for school.

The back-to-school rush means more money for the business eventually. However, beforehand it means beefing up on new equipment or upgrading old systems. It also means paying for additional staff while you wait for your accounts receivable to be paid.

As a doctor, therapist, dentist, or other healthcare professional operating your own practice, you need to start thinking about funding these additional costs long before late summer. Therefore, start your loan search in the winter or spring, well before you need the funds, to be sure you have them available when the rush starts.

For Retailers

Many retailers see a spike in sales through the holidays. This means big business in November and December. However, you need to be ready well ahead of time for Black Friday sales, Small Business Saturday promotions, and Cyber Monday deals.

This holiday frivolity will need to be backed by extra staff working long hours. Naturally, your employees will be hoping for big paychecks or annual bonuses. But before the mayhem begins, you must consider how you'll pay for all of the help you'll need.

Applying for a loan in the spring or summer gives you the cash on hand you need to hire staff, keep your business open longer hours, beef up inventory, and update your website to increase online traffic and sales.

Other Factors for Retailers to Consider

Short-term loans, merchant cash advances, and lines of credit are flexible options to cover any extra costs you incur prior to your seasonal rush. The idea is that you'll make the money back in holiday sales quickly. Therefore, you’ll be able to pay off the loan right away.

Analyze your past sales trends and look at other businesses in the area to figure out how much money you need to stay competitive. In this way, you'll be able to accurately estimate your income and expenditures. This will help you to apply for a reasonable loan that won't overextend your financial abilities but will be enough to get you through.

For Construction Businesses

Summer is construction season. The weather is finally nice again, and inclement weather doesn’t interrupt your work as frequently. It's time to hang up your winter coat, dust off your boots, and get to work.

Applying for a construction loan in early spring allows you to lease new equipment, hire certified contractors, and cover the cost of the big project you just landed. Starting the application process early gives you the cash you need to prepare for the construction season. Additionally, it can supply you with enough left over to get you through the next slow winter.

If it took you longer to get up and running this year than last, and you didn't have time to secure funding, short-term loans and business lines of credit are flexible. Moreover, some lenders fund them faster than they do other options.

In the Restaurant Industry

Restaurants don't often see the spikes in business around the holiday season that retailers do. As a matter of fact, many people spend holidays at home, enjoying meals with family around their own dining room tables.

However, the problem for restaurateurs is that their expenses don't decrease just because their business does. As a restaurateur, you must continue to find a way to cover the costs of servers, cooks, food, rent, utilities, and other overhead, regardless of how full your restaurant is.

Therefore, the best time for restaurant owners to look for loans is in the fall before business slows. Hopefully, however, you'll have a surplus from a busy summer to carry you until you need to look at loan options.

You might also need equipment financing to help you buy new appliances. Additionally, a commercial mortgage could allow you to renovate during the slow season for a fresh look in the spring. You could also investigate a merchant cash advance. Then you can pay it back when business picks up again.

Don't Hesitate to Look into a Small Business Loan Today

Don't wait until it's too late to look at loan options for your business. The right time is always today, not tomorrow. If you need it desperately, there's no reason to delay. On the other hand, if you don't need it now but know you will soon, it's never too early to look into a small business loan.

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