The Five Best Business Decisions
In a recent episode of the Hammer and Grind podcast, host Brad shared the five best decisions he made for his business. These insights are invaluable for anyone looking to improve their business operations and profitability.
Here’s a summary of the key points and actionable steps you can take to implement these strategies in your own business.
Key Takeaways
1. Job Costing
Job costing is the practice of tracking all expenses related to a specific job, including labor, materials, and subcontractor costs. This helps you understand where your profits are leaking and allows for better planning and estimating in the future.
2. Charging for Estimates or Consultations
Offering free estimates can lead to wasted time and resources. By charging for estimates, you attract serious clients who value your expertise. This not only saves you time but also elevates your perceived value in the eyes of potential clients.
3. Selling Jobs at a 50% Gross Profit
Many contractors struggle with pricing their services effectively. By aiming for a 50% gross profit margin, you simplify your pricing strategy and can significantly increase your profitability. This approach allows you to cover costs while ensuring that profits go directly into your pocket.
4. Hiring an Office Manager
Hiring an office manager can free up your time and allow you to focus on higher-level tasks. An office manager can handle administrative duties, enabling you to work on growing your business rather than getting bogged down in day-to-day operations.
5. Hiring a Business Coach
A business coach provides an outside perspective and can help you identify blind spots in your operations. They offer valuable insights based on their experience with other businesses, helping you avoid common pitfalls and accelerate your learning curve.
Action Steps
Step 1: Start using job pricing for all of your projects. Make a simple chart to keep track of your spending and see how it compares to what you thought it would cost. This will help you figure out how to save money and work more efficiently.
Step 2: Change your business so that you charge for advice. Decide on a fair price that shows your skills and the value you offer. Tell your clients about this change and how it will allow you to give their projects more time and resources.
Step 3: Look at how your prices are set now and change them so that you have a 50% gross profit margin. Find your prices and multiply them by two to get your selling price. With this simple method, your bottom line can start to improve right away.
Step 4: Look at your present workload and figure out what tasks you can give to other people. To handle office work, you might want to hire an office manager, even if it's just part-time. This investment could make you more efficient and free you up to focus on long-term growth.
Step 5: Do some research to find a business coach who works with people in your field. Join a coaching program that offers group support. This way, you can learn from other people's experiences while also getting personalized help.
Implementing these five decisions can significantly enhance your business operations and profitability. Start by taking small steps, such as introducing job costing and charging for estimates, and gradually work your way through the other strategies. Remember, the goal is to create a sustainable business that not only thrives but also provides you with the freedom to focus on what you love.
Resources
Grab Brad's tell-all book: The Contractor Profit Blueprint
