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The Profit Builder

I stopped doing this, and it made me less effective…

For the past few months, the topic of social media has been nagging at me. It’s something I know I need to pay more attention to. Not just because it’s a “should” but because I know that if I’m going to accomplish my goals, I’ve got to get better at what I’m doing in that arena.

Each week I move the “gotta address” list of social media issues from one place to another on my desk, promising myself that I’ll get back to it.  Daily I think to myself “I’ve got to sit down with that list and make a plan.”

That nagging feeling and angst of uncertainty occupies a lot of space in my brain, and always has me wondering “am I going to completely blow it if I don’t do something with this stuff soon?”

Today while meeting with my VA (virtual assistant) Dortha who handles my social media, it suddenly became clear to me what the real problem is. 

About three months ago I stopped meeting with her on our every other week schedule.  We used to meet every two weeks, and when we did, we had an agenda and a list of projects we were working to move forward. 

Without the meetings, those projects didn’t go away. And while we were communicating via email, there was always these pieces that just didn’t get addressed.  Those pieces I kept in my head and kept carrying around on that piece of paper.

Today as we were talking, this sense of clarity and certainty about what we need to do next became completely evident.  My angst and worry subsided, and I felt like we were back on the same page.  

It was clear that our stopping our meetings made me, and her, less effective in what we are doing.  And it caused me to let that “list” to occupy much too much of my mental time and energy.

As we ended our meeting we set our next meeting for two weeks.  I knew that this was the key to my being more effective in this area of my business, and was reminded that when I have a consistent set of practices for managing results with my team, communication flows better, I have more peace of mind, and we get more stuff done!

Recently my friend Josh Patrick invited me to be a guest on his podcast, and on it, I talk more about how to create a consistent set of practices around managing for results, or as the title of the interview says, “Top Down Management.” 

It’s a quick listen, so go check it out.

Do you have a set of practices for managing effectively with your team? Please share your top two most important practices for managing for results with your team. Or, reach out to me on LinkedIn or Facebook and tell me.  

Make it a great day!

Warmest,

Vicki

Vicki Suiter helps people see their businesses differently, then gives them the tools to do things differently.  Since beginning her business in 1990, Vicki has helped hundreds of contractors achieve the kind of success they never dreamed possible. Today, in addition to consulting, Vicki is an in-demand speaker at industry conferences nationally and internationally. Vicki’s articles and opinions have been widely shared in print and across the web. She is also the author of the book “The Profit Bleed” How managing margin can save your contracting business.

The ONE thing you can do to ensure that candidate is a right fit…

When asked what their biggest frustration was as a manager, over 30% of survey respondents said they wished they were better at hiring.

In the early stages of my career, I remember feeling that way as a manager.  I was hiring a lot of people who didn’t seem to be the right fit, and it was super frustrating.

Can you relate?

That frustration pushed me to learn how to hire better.  I learned that one of the key steps was knowing how to ask better questions.

Questions that let you get insight into the candidate’s depth of their skill, practices, and qualifications to the job well.

Questions that let you how they think, their strengths, weaknesses, and how they problem solve.

Questions that help you get to know the candidate, not just on paper, but as a person.

Asking those kinds of questions gives you a whole different understanding of who that person is, and if they are really qualified to do the job.

In this week’s video, I walk you through what kinds of questions to ask, and what to listen for too. I help you understand how to set up the interview to ensure you’re confident and clear if the candidate is a right fit, or not.

At the bottom of this post, is a link where you can get those questions to use the next time you’re interviewing.

I’d love to hear what is one of your practices, systems or discipline you have that has helped you in hiring better – so leave a comment below.  Or, reach out to me on LinkedIn or Facebook and tell me.  

Make it a great day!

Warmest,

Vicki

P.S. Each of the questions has tips on what to listen for as people respond. Those tips can help you listen for “right fit” in regard to skills, qualifications, and personality. And you’ll stop feeling uncertain as to whether or not that person can really do the job.

P.P.S. If you found this post helpful, would you please share it?

Vicki Suiter helps people see their businesses differently, then gives them the tools to do things differently.  Since beginning her business in 1990, Vicki has helped hundreds of contractors achieve the kind of success they never dreamed possible. Today, in addition to consulting, Vicki is an in-demand speaker at industry conferences nationally and internationally. Vicki’s articles and opinions have been widely shared in print and across the web. She is also the author of the book “The Profit Bleed” How managing margin can save your contracting business.

Attracting “A-Players” to work for you…

In a survey I did last week, I asked respondents where they would like to be more effective as a manager or leader.  45% said attracting and hiring “A-Players” to their team.

The complaint I hear a lot these days is “it’s tough to find good people to work for us – it’s an employees market.” 

That statement has me think back to 2009 when people were saying “it’s tough to find work these days – it’s a buyers’ market.”

While I fully appreciate the reality of supply and demand, this thought occurs to me…

When those conditions exist, what are you and I doing to develop a company where “A-players” want to work, or that the best clients want to hire?

Last year when I was teaching a webinar (titled “How to Get Your Team to take More Ownership), someone I’ve known for many years, Peter, asked if he could share something.

Here is what Peter said…

“If you want to attract the best, be the best.  It doesn’t come from outside, it starts with you. Your processes, your disciplines, and the every day practices as a leader.” Peter went on to say “it was when we implemented better systems and process, and commit to following them, that we became a stronger better company.  It was when we started making ourselves a better company, we attracted a higher caliber of person to work for us.”

After the webinar I reached out to Peter and asked him to tell me more about what prompted his share.  He explained that as he listened to people talk about their struggle in hiring great people, he could so empathize.  Here’s what he told me…

“I’d been in business for eight years, working 60-70 hours a week, always babysit my team to get things done, and not being able to be away from my business without worry.  I was exhausted and beyond frustrated.  I wanted to change all that, and knew I needed change something about how I ran my business.

It was while at a conference and talking with some peers and their staff that I began to realize that it WAS possible to change all that – but I needed to change how I approach my business. From that day forward I committed to finding out how.

I became friends with those business leaders, and we began talking often.  They were incredibly generous in sharing with me what they’d done to grow their businesses, and develop teams of “A-players.”

The two thing they all had in common was this . . .

  • They implemented solid systems and process, and then followed them. 
  • They got clear about accountabilities of their teams and then hired people who possessed those skills. 

So that’s what I did. 

Slowly week by week, month by month, I built solid systems and process, which allowed us to start systematizing what we did, and as a result become more efficient in production.  

My team started to step up in whole new ways.  Where before I used to babysit people all the time, now what I manage is results – and I hold people accountable.

I became fiercely committed to having the discipline to follow through, and have my team do the same. 

Now I work less than 40 hours a week, take off 5 weeks a year, and we’re being sought after by great people to work for us. 

And the other great thing is this – I’m loving what I do now more than ever before!”

I loved hearing about Peter’s success.  One of the things his story clearly demonstrates was his discipline in building a better company was the very thing that allowed him to build a team of “A-Players” who have that same discipline and rigor.

Be what you seek.

As we chatted, Peter shared one practice he has, that he says has transformed his company culture and positively impacted his ability to build a business where great people want to work.

The most successful companies I work with do this one thing too. 

It’s simple…

Do what you say you’re going to do when you say you’re going to do it. 

If you say you’re going to show up at the meeting at 8:00, show up at 8:00.  If you say you’re going to have that bid to them on Friday, have the bid to them on Friday.  If you say you’re going to call back by the end of the week, call back by the end of the week. 

It’s a practice. And one that if you do it consistently will instill discipline in your company that can completely transform your identity and reputation.  It’s a discipline that builds trust, confidence AND uniqueness.  We can all agree, it’s not a discipline everyone has.

Stand out from the crowd

I guarantee that if you strive to do this ONE thing, it can completely transform your business and your life.  As you build an identity of someone who can be trusted, more people will want to work with you.

Here are a few tips on how to implement this…

  • Stop making agreements you know you can’t keep. We often say ‘yes’ to things just so we won’t look bad. It doesn’t serve you or them.
  • When you know you can’t meet the deadline/time agreement you made, renegotiate it BEFORE it becomes a broken agreement
  • Start making more explicit agreements – like what and by when. You’d be amazed, but this actually helps you be less overwhelmed because instead of having a lot of “open-ended” agreements, you have time driven agreements, which will help you better manage your time.

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I’d love to hear what is one of your practices, systems or discipline you have that has helped you build a better company – so leave a comment below.  Or, reach out to me on LinkedIn or Facebook and tell me.

Here’s to your continued success.

Warmest,

Vicki

p.s. in the comments below, share one of your best practices, systems or disciplines that have helped you become a great company!

Vicki Suiter helps people see their businesses differently, then gives them the tools to do things differently.  Since beginning her business in 1990, Vicki has helped hundreds of contractors achieve the kind of success they never dreamed possible. Today, in addition to consulting, Vicki is an in-demand speaker at industry conferences nationally and internationally. Vicki’s articles and opinions have been widely shared in print and across the web. She is also the author of the book “The Profit Bleed” How managing margin can save your contracting business.

Doing this 1 thing can help alleviate your worry…

As Don sat down across from me the worry and angst on his face was palpable.  “What’s up?” I asked?

“I know we’re in better shape at the beginning of this year than we were last year at this time, but I’m worried that it’s not enough.  I’m concerned that the economy is going to turn, and we won’t have enough work.”

I can relate.  We’re all wondering when the economy is going to take a turn. And none of us have a crystal ball that will tell us that.

But what we do have is data.  Data that can help us alleviate at least some of that uncertainty and worry.

I asked Don if he knew how much his backlog was as of the beginning of the year.  “No” he explained, “we have just been pushing to get as much work done as we could by year-end to meet schedule deadlines, and we’re trying to ramp up bidding right now.”

With all the balls we must juggle as business owners, it can be difficult to take the time to stop and look at the data.  And yet, it is exactly that which will allow us to get more clarity, focus, and certainty about what we need to be doing to “have it all turn out okay.”

Finding relief in the numbers        

Looking at the data will let you move from worry and uncertainty, to have certainty and focus on what actions you need to take.

I asked Don if he could easily access this information, and could we look at it together. He said yes, and as we started to dig into his project reports we pulled out the following information…

               The balance remaining on contracts at 12/31/18.  I asked him to include T&M projects and an estimated amount that he would bill for the balance of the project.

               Value of contracts on projects signed, and not yet started

With this data in hand, we spread out over 12 months the amount he projected to bill on each project by month.  I suggested he be conservative.

Then we took his revenue goal for the year and split that out by month, taking into accounts fluctuations of when he is busier or slower.

We then tallied up the amount he projected to bill each month in total and compared that to his revenue goal by month. 

This allowed Don to see exactly how much he was short or over per month and for the year to meet his revenue goals. 

As we reviewed the data, Don’s face began to soften, and the look of worry faded from his face. 

He suddenly smiled and said “wow, that’s the biggest backlog I’ve ever had at one time! And while I’m a little freaked out by the fact that I have that much more to sell this year, I now can at least see exactly how much that is!”

When you can see it, you can do something about it

 

In today’s video I walk you through how to use this kind of tracking tool and give you a link to a worksheet I’ve developed that you can use right now to develop your own backlog tracking worksheet.

As I told Don, and I’d recommend for you, if you want to have more peace of mind and alleviate the worry of whether your going to make it, update this spreadsheet every month.

Even if the numbers don’t show a picture you want to see, it will at least let you get clear on how much of a gap exists between where you are and where you want to be, so you will know definitively how much you still need to sell.

Hope you find this information helpful. 

Warmest,

 

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p.s.  Get my Backlog Tracking Tool at no charge, and start having a greater sense of clarity and stop the worry!

p.p.s.  If you found this article helpful, please share it with an associate or friend?

p.p.p.s.  In my book, The Profit Bleed, I talk in more depth about other ways you can get more peace of mind and stop worrying.  AND start having more control over the results of your business.  For a limited time, it’s available for FREE, so check it out.

Vicki Suiter helps people see their businesses differently, then gives them the tools to do things differently.  Since beginning her business in 1990, Vicki has helped hundreds of contractors achieve the kind of success they never dreamed possible. Today, in addition to consulting, Vicki is an in-demand speaker at industry conferences nationally and internationally. Vicki’s articles and opinions have been widely shared in print and across the web. She is also the author of the book “The Profit Bleed” How managing margin can save your contracting business.

Celebrating the wins…

Each December I ask my clients to share with me their biggest wins for the year.  And as the discussion begins, I notice the stranges thing happens…

People want to tell me all about what they didn’t get done!

It’s funny how we’re wired to look for where we’re lacking, or not perfect, or falling short.  Somehow we have this strange idea of that until we’re perfect, we can’t celebrate the wins!

In this weeks video, I share with you how I’ve helped my clients get past this – check it out… maybe it can help you too. 🙂

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I’d love to hear what one of your wins are from this year in the comments below! Or, reach out to me on LinkedIn or Facebook and tell me.

In closing, I wish the happiest of holidays and may 2019 be your best year ever!

Warmest,

 

p.s.  sneak peek… my book, The Profit Bleed has just been released in Kindle version – check it out.

Vicki Suiter helps people see their businesses differently, then gives them the tools to do things differently.  Since beginning her business in 1990, Vicki has helped hundreds of contractors achieve the kind of success they never dreamed possible. Today, in addition to consulting, Vicki is an in-demand speaker at industry conferences nationally and internationally. Vicki’s articles and opinions have been widely shared in print and across the web. She is also the author of the book “The Profit Bleed” How managing margin can save your contracting business.

Done for you marketing – with Kyle Hunt

When your super busy, it’s hard to think about marketing.  You know you “should” but who has time? 

And, with all the choices for how you could be marketing – social media, networking, sending postcards, etc. – which is the right one to choose? How do you know which one will have the greatest return?  It’s often this question that keeps us from doing any marketing.

The problem is this – when you don’t market when your busy here’s what happens…, after the current flood of work is over, you start to panic, you begin marketing like crazy, work comes in, you get busy, you stop marketing, and then work stops, you panic, then you market like crazy – and the cycle continues.

I call this the “roller coaster” of being in the contracting industry.

Last month while I was talking with my friend Kyle Hunt with Remodel Your Marketing, he had some great tips for helping remodelers (and any business) know how to focus on a few key things you can do easily and naturally to “prime the marketing pump.”

This blog post is a video of me interviewing Kyle as he explains what those few tips are. 


As always, if you have any questions or comments to add to the topic – please drop a comment below or feel free to reach out to me on LinkedIn or Facebook.

Warmest,

 

p.s. make sure to watch the video to the end – Kyle offers some great resources that can help you implement the ideas he shares.

Vicki Suiter helps people see their businesses differently, then gives them the tools to do things differently.  Since beginning her business in 1990, Vicki has helped hundreds of contractors achieve the kind of success they never dreamed possible. Today, in addition to consulting, Vicki is an in-demand speaker at industry conferences nationally and internationally. Vicki’s articles and opinions have been widely shared in print and across the web. She is also the author of the book “The Profit Bleed” How managing margin can save your contracting business.

2 Numbers in your business you need to know

The one report I see most business owners don’t look at very often, if ever, is their balance sheet. The bummer is this – that means they don’ know two of the most important numbers that will help them grow a successful company.

It’s not because their lazy, or don’t care. Mostly it’s because they don’t know how to interpret what it says, or how to use it.

Is this true for you too?

In this week’s video, I show you what those two numbers are, and how to use them to build a stronger, more profitable business.

By the way – these are the 2 numbers your bank looks at to determine if they will extend you credit.

In addition to watching the video, you can also download my guide on “How to Read Financial Reports.” It explains exactly how to calculate these 2 numbers and more.

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I hope you’ve found this post to be helpful – and as always, I’d love to hear your thought.  So please leave a comment below or reach out to me on LinkedIn or Facebook.

Warmest,

 

p.s. if you found this post valuable, will you please share it with your network? Thanks!

Vicki Suiter helps people see their businesses differently, then gives them the tools to do things differently.  Since beginning her business in 1990, Vicki has helped hundreds of contractors achieve the kind of success they never dreamed possible. Today, in addition to consulting, Vicki is an in-demand speaker at industry conferences nationally and internationally. Vicki’s articles and opinions have been widely shared in print and across the web. She is also the author of the book “The Profit Bleed” How managing margin can save your contracting business.

Want ideas for year-end bonuses?

Do you ever feel stuck by not knowing the best way to structure year-end bonuses for your team?

Do you wish you knew what other people were doing?

Since I get this question a lot, I decided to focus this week’s blog on different ways to structure year-end bonuses.

Vicki Suiter about Year End Bonus Ideas

It’s not just about the money…

Bonuses aren’t just about money.

You no doubt have heard before that money is not the only motivator for employees. While everyone wants to be paid fairly, equally important is that we feel like what we do matters, and has a sense of purpose, contribution and meaning. 

In a time when it’s tough to find and keep great people, it’s our job as leaders to create environments where people feel valued and appreciated.  To create an environment where people want to work.  

So as you’re coming up with what you’ll give people for bonuses this year, give equal thought to how you’ll present them to your team. Your presentation of that bonus will have much more impact and be more valued if you present it with a note of specific appreciation. 

Below I’ve shared with you ideas for how to do both. 

Bonuses can come in different forms…

Here are some ways I’ve seen clients bonus their teams.  Sometimes its just one of these, but I’ve also seen people mix and match bonuses.

  1. Give the week between Christmas and New Year’s off – PAID! 
  2. Give the week between Christmas and New Year’s off, WITHOUT pay, plus a cash bonus.
  3. Choose a dollar amount for bonuses and distribute based on a percentage of gross wages. To calculate, take each employee gross annual wages as a percentage of total annual wages for the entire company. 
  4. Provide all employee new jackets with the company logo
  5. Do 10% profit sharing split among employees at amounts chosen by the owners and/or senior management.
  6. A flat amount for each position in the company.
  7. Gift cards to a grocery store or big box store.

Acknowledge a job well done…

How you present the bonus is just as important as the money or gift part.  A well delivered gift includes a note (or conversation) that lets people feel acknowledged for their contribution by providing feedback that is specific.  Here are some ways you can do that…

  • Give them a hand-written note or sit down with them. Tell them what you value and appreciate about them specifically, NOT just “good job” or “you are great.”  Give it more depth. 

    Here are some ideas to help you come up with specific things you can share with them.

  • Something specific they did well – maybe fixing a problem, handling a challenge, etc.
  • Qualities about them that you appreciate – maybe pro-active, thoughtful of others, a good teacher, listener, trainer, leader, etc.
  • A behavior that makes them a great team member – maybe worked to solve an issue with other people on the team to get a project done on time, or helped to resolve a problem on a project that wasn’t theirs where a teammate needed help, etc.

These are just some suggestions, but you get the idea.  I’ve seen it time and again where the acknowledgment was valued more than the gift itself.  

Fundamentally, we all want to feel like what we do matters.  When people feel like you value them, and appreciate their contribution, they are going to tell their friends about what a great place this is to work.  They’re going to want to stay because working for you feels good!

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Do you have other ways you bonus or acknowledge your team?  I’d love to hear what they are.  So please leave a comment below or reach out to me on LinkedIn or Facebook.

Warmest,

 

p.s. if you found this post valuable, will you please share it with your network? Thanks!

p.p.s.  for a limited time you can get my book, The Profit Bleed, FREE.  You just pay shipping and handling.  

Vicki Suiter helps people see their businesses differently, then gives them the tools to do things differently.  Since beginning her business in 1990, Vicki has helped hundreds of contractors achieve the kind of success they never dreamed possible. Today, in addition to consulting, Vicki is an in-demand speaker at industry conferences nationally and internationally. Vicki’s articles and opinions have been widely shared in print and across the web. She is also the author of the book “The Profit Bleed” How managing margin can save your contracting business.

The Secret to Having Certainty in Pricing

I had the most interesting experience last month being a guest on my friend Kyle Hunt’s podcast, Remodelers on the Rise.

I came prepared to talk about pricing for profit and ready to answer the questions we’d outlined ahead of time.  But right from the get-go, Kyle went off script.  At first, I was concerned and thought “where is he going with these questions?”

He’d make these funny comments, or intersperse a light-hearted observation while I’d be making a point, which threw me off a bit.

Vicki Suiter on podcast with Kyle Hunt

But within a short time, it occurred to me that what Kyle was doing was digging for a deeper answer than the one I’d come prepared to give.

He wanted to know the nugget of truth.  He’d ask, “so why is that important?”

As his questions peeled away the layers of my thoughts, I found myself getting excited to dig deeper into the “why.”.  He pulled from me, the essence of what I know to be true about pricing, and, about growing a business that can thrive and prosper.

The “essence of truth” that Kyle pulled out of me was this… know your numbers.

I mean really know your numbers.  Not because it’s what your “supposed to do” and not because you want to model what other successful contractors are doing, but because it will make your life so much easier.

Last week while ending a meeting with my client Joyce she said to me “you know, my life has been completely transformed in the past few years.” When I asked how she said…

“Because I no longer live in worry and wonder.  I no longer fret whether there will be enough money in the bank, or if I’ll meet my revenue goals.  Now I know because I have the right feedback and numbers to tell me to know where I stand.  Even if I’m off course, at least I know how big or small the gap is.  I have certainty and confidence in what I’m doing in ways I never had before, and I love my work again.”

That is why you want to know your numbers.

If the idea of having more confidence and certainty in your pricing sounds appealing to you, check out the podcast I did with Kyle.

In my book, The Profit Bleed, I share with you what specific numbers you want to pay attention in your business that will let you get more control over your bottom line, and your life like my client Joyce.

For a limited time, I’m offering the book for free, you just pay the shipping and handling.

As always, I’d love to hear your thoughts about this post and the video – so feel free to leave a comment below or reach out to me on LinkedIn or Facebook.

Warmest,

 

p.s.  you may find my article “Beyond Breakeven” a good tool to help you know your numbers better when your pricing.

Vicki Suiter helps people see their businesses differently, then gives them the tools to do things differently.  Since beginning her business in 1990, Vicki has helped hundreds of contractors achieve the kind of success they never dreamed possible. Today, in addition to consulting, Vicki is an in-demand speaker at industry conferences nationally and internationally. Vicki’s articles and opinions have been widely shared in print and across the web. She is also the author of the book “The Profit Bleed” How managing margin can save your contracting business.

Doing this one thing when bidding will increase your profits…

Contractors I know who do this one thing when bidding make more consistent profits on their projects and their bottom line.
Before I jump into telling you what that one thing is, it’s important to understand this . . .

 

Here are the links I mention in my video – check it out https://suiterbusinessbuilders.com/markup-vs-margin/

and https://theprofitbleed.com

How gross profit dollars differ from gross profit margin…

Gross profit dollars are the difference between your bid price and your project costs. Gross profit margin takes that gross profit dollars and divides it by your bid price. That’s your rate of return or your gross profit margin. It’s a percentage.  Basically, margin is synonymous with percentage

They both mean the same thing, so whenever you hear margin, it just means that it’s a percentage.

Percentages are what I call the great equalizer. They’re the great equalizer because it gives you an opportunity to have a benchmark of what you want to be making on every job regardless of how much the dollars go up, or down.

I’ve often seen where a company will grow rapidly in revenues, but then their gross profit margin (rate of return) goes down. While it looks like they are making more, in fact, when that gross profit margin starts to decline, so does their bottom line, and their business can often end up losing money.

If you’re like a lot of contractors, you’re working as hard as ever and you’re not making the profits you’d like, and you want to figure out how to NOT work so many hours AND make more money. One of the best way to do that is to manage gross profit margin.

So how do you manage gross profit margin?

The first step is to set a gross profit margin goal.

How do you do that?

One way that I do this with clients is to look at five years’ worth of profit and loss statements and look at how margin has trended year to year.

  • Is there a gross profit margin pattern, or is it all over the place?
  • Were they making higher margins in the earlier years and now it’s declining with higher volume?
  • Is their gross profit margin within industry standards (what the market will bear)?

Often, I notice gross profit margins declined as volume goes up, or they are below what I know the market will bear.  This knowledge is based on my working with many contractors here in Northern California.

For yourself, look at your own data and ask these same questions.  As for “what the market will bear” here are a few ways you can find that out:

  • Go ask your CPA. If they work with other similar contractors, they may be able to tell you if your gross profit margin is within the range it should be (what the market will bear).
  • Go ask another contractor in your field. Your first thought might be, “Why would another contractor share that information with me?” Because successful people want to help other people to be successful. Choose somebody who has built a profitable contracting business, and who’s in your area of specialty.
    • Keep in mind – a company that does $2M a year is going to have a higher margin than a company that does $30M a year, so listen for that distinction.
  • Check with trade associations or groups specific to your field of work – they may have resources that can help you come up with a gross profit margin goal.

Wherever you look to find your gross profit margin goal, the important thing is to set a goal. Then start to manage your bids against that goal.

The ONE thing…

If you do this ONE thing on every bid before it is finalized, you’ll make a more consistent profit on all your projects, and your bottom line. It’s super easy…

  • Once you’ve got a bid price, subtract your cost, that’s your gross profit dollars.
  • Then calculate gross profit margin (gross profit dollars, divide it by bid price).
  • Then ask yourself this “does that gross profit margin match up with my goal?”
  • If not, go back to the drawing board, and see where you may not have marked up enough.

The most profitable contractors that sustain success, are the ones who manage to a gross profit margin goal.  In fact, they manage their entire business on specific, measurable goals.

Are you ready to be one of them?

Your mission should you choose to accept it…

  • Set a gross profit margin goal for your company.
  • Verify every bid before it goes out to ensure it’s at or above your goal.

Start managing this one number in your bidding, and you’ll grow a more profitable business. And who knows, maybe you’ll even be able to stop working so much!

If you’re wanting more information on markup vs. margin, I’ve explained it in my article titled Markup vs. Margin Explained.

As always, if you have any questions or comments to add to the topic – please drop a comment below or feel free to reach out to me on Facebook or LinkedIn. I’m happy to help and very interested to hear how others get on with implementing these tools in their business.

Warmest,

 

p.s.  My book, The Profit Bleed is all about how you grow a sustainably successful contracting business. In it, I give you the thinking and the tools (there are a ton of free resources you can download)  that will help you build the business and life you desire.  For a limited time you can get it for FREEcheck it out.

Vicki Suiter helps people see their businesses differently, then gives them the tools to do things differently.  Since beginning her business in 1990, Vicki has helped hundreds of companies achieve the kind of success they never dreamed possible. Today, in addition to consulting, Vicki is an in-demand speaker at industry conferences nationally and internationally. Vicki’s articles and opinions have been widely shared in print and across the web. She is also the author of the book “The Profit Bleed” How managing margin can save your contracting business.

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