Your next job: install a business plan
There is a procedure or plan to accomplish this. You would not install a system without a plan. If you do, then you run the risk of putting the wrong equipment in or having to run to the supply house to pick up forgotten parts or having an incredibly sloppy job that takes longer than the budgeted hours. Having no plan is a formula for losing money on a job.
If you plan your jobs, you can easily plan your business. Most contractors think that a business plan is many, many pages. It doesn't have to be. The simple one is a list of goals, a marketing flow chart and budget, a cash flow budget and a sales/income statement projection. That's it - five pieces of paper. It does take time to do it. However, it is a lot better to have a plan. As some wise person once said, "If you don't plan, you'll get somewhere, but probably not where you want to go."
During the next few months I will put the pieces together for your business plan. If this seems familiar to you, you are right: this series will be very similar to one I wrote last year. I believe that every year you should look at a planning process and this is one of the best ways to do it. Let's get started.
Are you 'in the know?'
What is really happening with your business? Many times I hear that the owner of a business is the last to know when something is happening. Maybe a key employee is unhappy and looking for a job or a project is not meeting budget, or there is another issue that is being kept from "the boss." So when you start looking for what you want to accomplish, make sure you get out of the office, into service trucks, and on job sites. Talk to customers yourself. Find out what is really happening so you can make reasonable plans.
Your plans should include sales goals, a mix of business goals, a number of customer goals, a target number of residential and commercial service agreements, gross margin goals, net profit and personal income goals (which you don't have to share with your employees).
Here are some questions to ask yourself:
1. What went right last year?
2. What went wrong and what did you learn from it so you don't do it again?
3. How many customers do you have? How many are active customers? (An active customer is one with whom you have done business in the past 18 months).
4. What did your competition do this year? Were there any new entrants who have a desire to run a profitable business? Are your current competitors getting better? Stronger? Taking sales away from you? Disappearing and you aren't running into them any more? Did a consolidator or utility company buy them out?
5. Are you happy with the personnel who work with you? If not, what are you planning to do about the situation?
Once you have determined your goals, put them where all the employees can see them. Break the goals down into monthly objectives. Put them where you can see them and review them each month. Check off each objective as you complete it.
Copyright 2002, Ruth King. All rights reserved.
Ruth King's American Contractor Exchange
1650 Oakbrook Drive, Suite 405
Norcross, GA 30093
800-511-6844, 770-729-8028 (fax)