STEP #1 - Money makes the world go round, Let’s make sure you have enough cash to carry you through the next six months ahead. As we all know that cash in the bank takes the pressure off, gives you money to pay your bills, and room to deal with anything else unexpected.
- Cash in the bank: Collect outstanding daily/weekly, increase invoicing speed and check to see if received, negotiate a payment options if necessary.
- Review and reduce expenses: Are they adding value right now?
- Debt Restructure: Vehicles/Assets/Loans – Interesting to see what a % decrease can do over a year.
- Cash out of the Bank: Think about your Loans/Taxes/Credit cards/ Supplier/Sub trades/Wages; Talk to them and review rates, payment plans and know when they need to be paid. Get clear on operational expenditure – breakdowns and maintenance.
- Your Terms of Trade: Are they up to date with your current clients, collect deposits - allows you to lock in materials and costs related to the job and shorten timeframes on payments claims.
- Know your Numbers: Reduce liabilities and increase your assets always, next….
Understanding your numbers
Most business owners sleep better once they take control, allowing for smarter decision-making — based on logic, rather than fear.
- Performance: Business grow or die based on the Gross Profit Margin – know what’s bleeding and what’s making gross profit on your projects/ jobs/maintenance. Eg. Driving around the country for a job that might need rework.
- Profit Centres: Commercial /Residential /Industrial /Maintenance - track daily/weekly hours worked /paid – I am still amazed on slippage and wastage.
- Back costing: Add the real cost into the jobs/ projects – Marketing /Sales /Quoting /Admin /Cost of Sales and % of overhead with an extra % for negotiation.
- Increase versus Discounting: 10% discount can relate to 50% more sales to make the same income. 10% increase can relate to 25% less sales, let’s do the maths based on GPM. Find ways to value add, this way – you don’t burn yourself and your team.
- Financial Goals: You will be amazed at how close you come to making it when having a budget (planning for profit and growth takes cash).
- Sales Focus: Keeping the pipeline full is next,
Build consistency in sales
So that you’ve got enough work to sustain your business.
- Database: let customers know all your service offerings, cross-sell if needed.
- Low-hanging fruit: build strategic connections with suppliers, previous customers, other subbies, builders, architects and insurance.
- Lead management: qualify and follow through to quotes turnaround.
- Conversion: measure and make sure you have the resources to deliver.
- Communication with booked jobs: Contact them regularly to talk about your plans and start dates, reassure them you can do the work and have things in place.
- Just-in-time stock: make sure suppliers got what you need and helps cashflow.
- Onsite upsells: incentivize team with checklist to add value on site where possible, or quote onsite for other future work.
- Quality Control: Measure twice, cut once.
- Customer Service: Ask happy customers for a 5-star review on Google or Facebook
- Planning: wisdom, the ability to evaluate by taking time to think ahead is next,
Making time for strategic thinking
Develop the muscle for thinking ahead, like the old saying goes; failing to plan – is planning to fail, having your A-Team involved is good as gold and then taking ownership on those ideas.
- Opportunity minded: government work, insurance work, and sectors that are growing right now, such as medical/health, food production, supply chains, critical manufacturing, IT and telecommunications, delivery services, repair/emergency work — be proactive and get on the phone with any contacts in these areas
- Risk management: your biggest client ideally wouldn't be more than 30-40% of your business, what happen if a key team-member leaves?
- A, B or C: what are your criteria of an A- Class customer?
- Business development: innovating automation, new products / services or accreditations that will leap-frog your business.
- Knowing your strengths and weaknesses: outsource or sub–contract what you not good at and build on your strengths.
- Life-Time Value: Average Clients value and number of transactions.
- STOP, KEEP and START: business decisions are based on good leadership and management, next…
Leading and managing
Growing your people and managing your business from the angle of truly what’s best for it based on your Vision and Culture.
- Personal development: you grow and so does your business.
- Prioritize: always reviewing urgent verses important allows for effective use of your time, either your plan your time or the world will take it.
- People: Invest upfront in A–Players and set a clear direction with transparency and understand what motivates them and delegation becomes a reality.
- Returns: on your time, energy and investment – start with the end in mind (shareholder thinking). The business must serve the personal goals (Commercial/Residential Investments etc.) So, as the director it should pay you well for the work that goes into growing a profitable business that can be sold for multiples of future profits.