Security Today
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MAKE YOUR YARDSTICK
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FOUNTAIN VALLEY, CA - Set goals so you can measure the company's progress and health at critical early stages.
Kenneth Jacobs was content to be an employee of a large security company until the owner prepared to sell it.
" I saw the handwriting on the wall, that the company would go through major changes," Ken says. " I was 37, and thought if I ever wanted to try something on my own, this was the time."
In 1987, Ken started JMG Security Systems in Fountain Valley, California, to install burglar alarms and other security devices. Within two months, he had an ulcer.
"I was so used to a healthy paycheck, and here I was with zero income and worrying about money and paying bills," Ken says. "Rather than worry day in and day out, I decided to set some performance goals for the next six months, then reassess where I was at that point."
The only significance of six months, he says, was that he had enough money to live for that length of time.
"I didn't know if six months was long enough, but it gave me enough time to get my name out there and attract some clients," Ken says. "It was a mental game, but it totally relaxed me and freed me up to do my best work."
Some entrepreneurs fret about what goals to set. To start, they might use industry standards. Some trade groups keep track of performance averages. Dun & Bradstreet Corp. annually publishes Industry Norms and Key Business Ratios, which gives typical financial statements and key ratios, such as current assets divided by liabilities or annual net sales divided by inventory, for major Standard Industrial Classification (SIC) codes. This book is available in many public libraries.
To Ken, however, the goal itself wasn't as important as the act of setting it. The important step was to have a benchmark against which to measure performance.
"How do you know how you're doing if you don't have anything to measure your performance by?" he asks.
Ken determined he wanted 10 percent of the security alarm business in his area within five years.
"I had no idea what that meant," he says. "Now I know that 2 percent is a number. I can tell you I'm a significant player in the field."
Initially, Ken wanted to make sure JMG Security Systems was increasing its revenues and adding accounts - the right kind of accounts. By his standard, this meant larger commercial clients that don't stop based only on the lowest price and that pay their bills on time.
" I couldn't so that at first, but I wanted to make sure I was moving in that direction," Ken says.
At the end of six months, Ken sat down with his wife to decide whether JMG Security Systems was reaching its goals.
"If yes, we would go forward; if no, then we wouldn't sink more money into it. We'd be smart enough to look for something else," Ken says.
The Jacobses gave their venture the go-ahead, but Ken acknowledges now that if the company hadn't been moving in the right direction, closing it would have been a tough decision.
After the first year, Ken never questioned JMG Security Systems' viability. He deliberately pursued and won well-known accounts, such as Nordstrom department stores; Edison International Field, the baseball stadium of the Anaheim Angels; Knott's Berry Farm; and Home Depot Stores throughout Southern California.
"Once you have one of these plums, no one questions your credibility," Ken says. "I have outlasted all my major national competitors."
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