We all want to be successful; it’s part of being human. We want to be better at what we do, particularly when it comes to our business; whether that’s increasing revenue, implementing better processes, improving how we hire, or perfecting a skill. Finding success and getting what you want is often attached to making a change or improving in some way.
We start, then we put it down. We put it on our to-do list, and then it sits there. We put in a stack on our desk and assign a due date, and then it sits. Undone. Incomplete. Nagging at the back of our minds, “gosh I really need to …”
Making a decent profit starts with bidding. There are a couple of bidding pitfalls that, if you’re not alert to them, will negatively impact your bottom line, and will render your powerless to protect your profits once in production.
1 ) Not using the most up-to-date figures for the cost of employees (everyone is paying more for employees these days).
2) Not using the correct overhead markup percentage (many people get this wrong). See my post of May 17, 2018, for more on this.
3) And, if you don’t understand the difference between markup and margin, your profits will start to bleed before a project even begins.
In this post, I want to focus on #3 – Markup vs. Margin.
Markup vs. Margin
A surprising percentage of contractors and business owners will confuse markup and margin. Each figure helps you set prices and measure productivity but, a margin vs. markup chart shows that the two terms reflect profit very differently. It’s important to know the difference between margin and markups in your pricing because when you don’t you can mistakenly price yourself too low.
Let’s face it, everyone strives to attain profitability. We seek abundance, prosperity, options. We want financial stability, success, and freedom. There’s absolutely no shame in that. When we own a business, we focus on providing great service, building a remarkable reputation, which in turn, should lead to a strong client base, and a highly profitable business, at least in theory.
Yet, time and time again, businesses run into walls. Despite the best of intentions and all that hard work, their income is barely covering overhead costs. I see it all the time.
In hopes of reaching a higher profit, they end up taking on more work, chasing after anything they can get their hands on, which leads them into a vicious cycle. Seemingly overnight, they’re giving up weekends; abandoning their own health, relationships, and happiness in exchange for endless coffee sipping and yet another late night at the office.
Sound familiar? read more…
Guest blog by Sonja Stetzler, MA, CPC
I met Sonja a little over a year ago, and when she told me about her use of improvisation in the workplace I was fascinated. How is that possible I thought – it’s just that silly stuff they do on Whose Line is it Anyway.
As Sonja explained more, I realized it is so much more than that. And as someone who cares deeply about creating cultures where people can win together and create great results, I wanted to learn more. The next month I took an improv class.
In doing so I found that the principles of improv really do apply to creating great work environments. That led me to ask Sonja to write this blog post. I found what she said to be spot on with my experience in working with teams. Hope you find her message to be valuable too.
Are you regularly checking your business’ vital signs?
See, to me, there are a few key numbers in your business. They act as an impartial, unbiased review of what’s going on in your business. They can tell you if there are problems, unmet quota, faulty systems and more.
They are, in essence, the vital signs – such as the heartbeat – of your business.
Today, I’d like to go over a few of these key numbers. Allowing you to get into the heart of your business and see just how well it’s actually beating. As well as potentially highlighting some issues that may be holding your business back.
What’s more, you don’t even have to be an accountant to make use of these numbers. Pretty exciting, right? So, without further ado, let’s get into these numbers and how to monitor them.
1, 2 and 3. Revenue, Gross Profit Margin and Net Profit Goals.
The reality is, most businesses have clear revenue goals.
However, they’re not always great at keeping track of gross profit margin or net profit goals. Which is like checking for a pulse without checking for breathing. They go hand-in-hand. The success of revenue, margin and net profit goals are all intertwined.
Do you wish your staff took more responsibility in their job?
For a number of years, I’ve worked with business owners and managers struggling with teams not taking ownership and responsibility. Many of them are left dreaming about it rather than believing it to be possible, and many think it’s the key issue holding back their business growth.
In my early days as a manager and business owner, I struggled with these same challenges. And I saw that if I didn’t do something different, my business would never grow. That wasn’t going to work for me – so I started researching what might be behind this phenomenon.
That research set me on a course of deep learning from some of the great thought leaders on the topic of management and leadership.
In the years since, I’ve been developing and implementing systems that have not only helped me, but helped hundreds of other business owners and managers as well. The results? People started taking ownership of their jobs. And that wishful dream became a reality.
Now, I’m going to share that system with you.
Back in the early years of my business I was struggling.
Not from a lack of direction, workload or help either. It was all there in abundance. I had a clear idea of what I wanted to achieve. And I had clear goals for my team as well.
But, no matter what I did, these goals were frustratingly not being met by my team.
And according to a recent survey I did, 77% of the respondents are feeling exactly how I did. They’re struggling with the same obstacle. Their teams not taking ownership in their jobs.
They’re trapped feeling like they need to micromanage their staff to get anything done.
This feeling had caused me a great deal of stress over the years, even before I’d started out in my own business. Despite several leadership courses and books I’d digested on the topic.
It was when I was faced with unhappy clients that were about to leave, that I knew I had to do something different. I needed to learn how to motivate my team.
That started me looking to the great thought leaders on the topic of management and leadership. The first few were Michael Gerber and his book The E-Myth, and Dan Pink’s talk on Motivation.
In this post I’m going to share the two key lessons I learned that have been the cornerstone of my own transformation as a manager and leader.
1. Successful Leaders Don’t Micromanage
This was the first realization that transformed how I motivated my team.
In Michael Gerber’s book, which I read several times as I stood face-to-face with the prospect of losing my business, he made a clear distinction that revolutionized how I led my team.
I could no longer be a micromanager for the results my staff were meant to be achieving.
I needed to delegate the business’ workload and know – with confidence – that the work was going to be done. Correctly. Without me having to step in and fix it every single time.
Otherwise there’d be no point in me delegating. And there would be no weight taken off my shoulders. I’d still be working a job, instead of running a business.
For the past several days I’ve been asking clients and colleagues what they’re hearing about how the housing shortage issue will be addressed in the wake of 2800 homes being destroyed in the North Bay / Sonoma County fires. One person I spoke with last night who works for the Sonoma Planning department said they are working on ways to ease up the permitting process to allow people to begin re-building sooner. Today, I came across a great article by Selma Hepp is Pacific Union’s Chief Economist and Vice President of Business Intelligence that talked about the housing market in the area, and what the projected recovery and rebuild times may be, and how prices for rentals and purchases will be impacted.
While there’s still a lot of unknowns, it felt comforting to get some answers in a time that is filled with so many questions and concerns about how this community will rebuild. You can see the article here.
If you have been affected by the fires, my good thought and prayers are with you.
Let’s face it – you started this business with the dream of freedom. You wanted choices. You wanted to have the ability to be your own boss, call the shots, create your own destiny. Then somewhere along the way all the “business” of business started weighing you down. Your found yourself struggling to make a profit. Wondered if there was a way to not work so hard. Wished you could have more time away from your business and know that it would still run without you. Maybe even, dare I say, have more fun. You’re not alone – these are the kinds of challenges business owners just like you are facing and asking themselves all the time. Here’s the good news – it can be different. You don’t need to work more hours, or juggle more things to get all that.
The truth is, making a few simple changes in your business can make all the difference in helping you be more profitable, have more time, and even have more fun. In my interview on The Sustainable Business podcast I talk about these simple steps. Here is the link to the podcast – it’s worth a listen. Even if you just do one of these simple things, I promise you’ll get closer to living that dream.
Make it an extraordinary day.
Author of forthcoming book “The Simple Truths of Business” Your key to amazing success!
Every once in a while I meet a kindred spirit in the consulting world, Someone who inspires me, and who speaks to the things I’m passionate about. Josh Patrick is one of those people. As a business coach and consultant he has a strait forward style that is intriguing and engaging. Josh is a great writer, who has a wonderful ability to make direct point, while making you laugh at the same time. I asked him if he’d be willing to write a post for my blog and he graciously accepted.
Managing others is one of the biggest challenges I see leaders face. In Josh’s article, he shares some great advice on how to shift how you interact with staff and ultimately, alter your experience. Hope you enjoy.
There have been thousands of pages written about how to motivate your people. They range from doing contests to just saying thank-you. Although these are great things to read about my true belief is that you don’t really ever motivate anyone. Motivation comes from inside: we motivate ourselves. read more…