noscript

Business Builders Blog

Planning for Profits – Your Company’s Budget

Imagine it’s December 2020, and you’re reviewing the results of your business for the past year and you notice that compared to 2019, your profits are WAY up, AND, you didn’t have to kill yourself to make it happen! How great will that be?!

That’s what’s possible when you operate your business with a plan. Planning for increased profits by creating an operating budget for your business. I don’t just mean a revenue plan (most people have one of those), I mean planning for bottom-line net profits and increased cash flow. In today’s video, I’m going to share with you the tools and steps to employ to help you do just that for your business! Read More

Planning for Profits – Be Intentional About Your Money

image with coins in the background and the words How intentional spending can change your life for the better!

It was a huge wakeup call for me when one day I was faced with needing to buy a new set of tires I desperately needed for my car, and no money in the bank or available credit to buy them. The realization set in that my habit of living from paycheck to paycheck was not workable.

The story of, “When I make more money, I’ll have more money,” was a lie.   Because every time I got raises and my salary went up, I still never seemed to have any extra money for unexpected expenses.

Being in my mid-20’s at the time, and starting to look at not just surviving, but actually wanting to buy a house some day, I knew something had to change.

It was while channel surfing one Saturday morning that i stumbled upon the Suze Orman Show and her voice blared at me “your problem with not having enough money isn’t really about not making enough money, it has to do with the fact that your not being intentional with how you spend your money.”  I immediate stopped changing the chanel, and started to pay close attention.

That wake up call, and her books and courses completely transformed my relationship with money and began to show me the principles of how to always make a great profit and have money in the bank when I want and need it.

Read More

Pricing for Profits: The Story Your Numbers Tell

Stephen Few quote:

My client, Bob, called saying, “I’m a little freaked out, and I need your help.” He continued, “I’ve been working my butt off to get my revenue up, but my bottom line profit is dropping.”

If you’ve ever experienced your revenue increasing, but your bottom line staying flat, or worst yet declining, then you can probably relate to why Bob was freaking out.

Making a consistent profit can be a common problem for many contractors, but it doesn’t have to be your problem.

When things like this happen, I tell clients to start with the data. Numbers always tell a story. So Bob and I sat down together armed the company’s profit and loss reports.

Sure enough, he was right. Revenue was steadily increasing, but the gross profit margin had been falling little by little from 30% a few years ago, to 27%, to 25% this year.

Contractors live and die by gross profit margin, so this decrease was worth a closer look.

If you’re working super hard, but you’re just not seeing the results you want, keep reading . I’ll explain to you why this happens, and then, what you can do to change it.  We’re going to talk today about what causes gross profit margins to drop, how to avoid “overhead creep”,  and how to price for increased profits.

Read More

How to Price for Profit in Your Construction Bids

image of blueprints and people's hands pointing on blueprints

When my client Joe and I met a while back, he shared with me his recent revelation that has caused him to completely re-think how he bids projects.

It all started while reviewing his financial results (prompted by his concern over a declining bank balance).  It didn’t take long for him to see a pattern… his company’s gross profit margin was steadily dropping.  Joe knows that construction companies live and die by gross profit margin, which meant he needed to dig deeper.  As he did, here are a few things he discovered..

1) Pricing in the estimate for materials was not the price they actually paid. There were two reasons for this:

a. The price paid for materials were not what was in the estimate. It’s easy to let this happen, especially if you do long term projects like Joe’s company, where there’s a lag time in between writing an estimate and placing a purchase order.

b. The quantity of materials purchased was over what was in the estimate. When they were self-performing the work (as opposed to using a subcontractor), the final material take off had far less material than they actually needed as shown in the plans.

2) The estimated hourly cost of labor for different positions was too low.  This was only affecting the work that was self-performed. So the work done by subcontractors was profitable, but self-performed jobs were losing money.

In today’s video we’re going to talk about why this type of problem occurs on porjects and in bidding, and what you can do to make sure it never happens to you.

We’ll tackle one of the biggest challenges construction companies face when bidding jobs, and I explain how to always make sure you’re pricing for profit.

Read More

A Contractor’s Succession Plan – Part II

This is the second part of a two-part series on succession planning for a contractor, and the process of finding and developing a new leader for a business as the owner nears retirement. If you’re thinking of someday selling a construction company, wondering about the future of your business, or curious about what your retirement could look like, you don’t want to miss today’s interview.

In this video, we’ll discuss what succession planning is, what does it take to sell a business, what has worked really well for my guests, and what would they do differently after going through the succession process.

I’m talking to Tom and Barbara Weiher, the original owners and founders of Carmel Builders in Milwaukee, WI. Carmel Builders successfully transitioned the business from Tom and Barbara to their son, Louis, a few years ago. (You can watch my interview with their son Louis here.)

Tom started the design, build, and remodeling firm 40 years ago. Ten to 15 years ago, he started wondering, “How’s this going to end?” It seemed ideal to him and his wife, Barbara, for one of their five children to take over the business to keep it in the family. But at the time, none of them were working in the business or interested in taking it over.

(more…)

Get your FREE Business Health Assessment to find out where your business is bleeding profits! Get It Now

Get your "Inspiration to Greatness" with Vicki's Quote Action!