Welcome back to our series, “Plugging the Profit Leaks in Your Contracting Business.” Today, we’re tackling the mystery of financial statements. They might look like a puzzle of numbers, but they hold the keys to a successful contracting business.
In today’s video, we delve into two crucial financial tools: the Profit and Loss Statement (P&L) and the Balance Sheet – how to read them and use them as a powerful management tool!
The Profit & Loss is like a report card. It shows your income, expenses, and profit or loss over a year. Knowing how to read and use this report lets you have more control over the ROI of your operations.
The Balance Sheet, on the other hand, is a snapshot of your business’s value or worth from the time you opened your doors. Knowing how to read and use this report lets you have more peace of mind and ease around cash flow and when and how to have the financial resources available when you need them.
I understand financial statements can be daunting. But without them, you’re running your business in the dark. Understanding your P&L and Balance Sheet sheds light on your path to profitability, especially when you know how your numbers stack up to industry standards!
In this video, I break down these statements, pointing out potential red flags and providing you with a roadmap for how to read, interpret and IMPACT these numbers and the ultimate profitability of your contracting business!
And, in this video, I share with you industry standards for what kind of profit margins you want to be targeting in your contracting business!
At the end of the video, I share this powerful resource to help you evaluate your financial reports and see how your data stacks up against industry benchmarks – How to Read Financial Statements (with industry benchmarks)