When I started running a boot camp for gutter companies, I quickly came to realize that few contractors are familiar with the financial workings of their own operations. I think I know why: most start out as installers, working for someone else. They don't realize what it costs to run a business. And they're not in the habit of writing things down.
That's where getting control of your business actually starts. Writing things down (a business plan) is essential. It gives you and your business clarity and a road map showing where you want to go.
Critical Measure Businesses are measured by sales growth and by consistent profitability. Here are some things I do to keep my $4 million gutter and gutter protection business growing and profitable:
Set financial goals. I set sales and revenue targets at year's end, laying out what I'd like my company to do in the coming year. Then I compare sales and bottom line results with the month's projected goal and with what we did last year. Each department —sales, production, and administration — also has its own goals.
Track leads daily. If your organization relies wholly or in part on leads, pay attention, daily, to the number of leads you're getting. Compare them to your weekly, monthly, and yearly goals. If leads aren't coming in, your sales are not going to be what they should be. You should also know what percentage of those leads you're closing on, again, on a daily basis. Train yourself and your salespeople to sell your products, not give them away in the bid process.
Weekly sales reports. Every Friday I get a weekly report that tells me how we're doing by salesperson and by lead, and the percentage of leads that are generated by advertising versus repeat, referral, or self-generated. We will get about 6,000 leads a year, and 53% are repeat, referral, or self-generated. These sales figures and closing ratios should be compared with figures for the previous year, as well as with monthly goals. A track record allows you to constantly upgrade and train your weaker salespeople.