3 Things That Can Boost or Destroy Your Contracting Business

By: Joe Crisara

3 Things That Can Boost or Kill Your Contracting BusinessWhen you own and run a contracting business, it seems like there’s always something urgent to handle.

There are always emails, phone calls, meeting, employee questions, customer concerns… the list goes on and on. From the second you walk in the door to the second you power off your phone at night (if you even get to do that), there’s no shortage of urgent matters for you to handle.

So when exactly is someone in your position supposed to get anything BIG done… like grow the business?

Well, honestly, if you keep spending your time on those urgent things, maybe never.

That’s one of the reasons why so many companies in our industry seem to grow like crazy for a while and then hit a ceiling. At some point, their growth stalls because they’re in a constant mad dash to handle all the urgency.

The question then, is… what can you do about it?

The Nature of the Beast

You might think, “Hey. It’s just the nature of the beast.” Maybe you’ve accepted that your life is always going to be a sprint, stomping out little fires all day every day.

You want things to be different. You want to work on the big picture and see your business grow, but for now, you feel like you have to keep stomping out those urgent fires and hope that some day things will somehow work themselves out.

Well, the honest truth of the matter is that mountain of urgent things isn’t going to go away on its its own.

You have to take action and shift your focus.

And the good news is that you absolutely can do that.

You just need a systematic process to shift your focus off of the urgent things, and put as much of your time and energy as possible into tackling the important things like growing your business.

Three Points of Focus

If you really want to focus on the big picture and grow your business, you need to work on eliminating, scheduling, or delegating as much of that urgent stuff as possible and turn your attention as the owner to what’s really important.

  1. Marketing
  2. Operations
  3. Finance

When you can spend a greater amount of time focused on these three areas from a 30,000 foot view, instead of being in the weeds, you will see your business grow, your stress reduce and your profits increase.

The problem we see with most service contracting business owners is that they know of these 3 areas, but usually only spend a little amount of time on them, instead getting bogged down in a ton of detail and micromanagement.

Even if you are brand new to the business and are just getting started, you need to be carving out time each week to focus on these 3 areas and how they impact your overall business.

You maybe thinking this is a lot to cover and frankly it is, so for this post I’m going to provide you with a nugget or two under each that will make the most impact for you in the shortest amount of time.

#1 – Marketing

Let’s face it, marketing and advertising are important… and expensive. And because it’s both of those things, they key word you need to remember with regard to your company’s marketing is TRACKING.

As a contractor owner, you should know exactly how much money is going to each marketing and advertising effort such as…

  • Referral & loyalty programs
  • Website SEO & advertising
  • Social Media
  • Coupons
  • Display
  • Broadcast

Tracking allows you to weigh your dollars invested against the dollars each marketing or advertising effort. Remember that you’re not looking for which thing brings in the most gross revenue. You’re looking for a ratio between how much you invest and how much it brings in.

When you know your marketing numbers inside and out, you’re able to allocate more money to the best performing ones, and stop pumping money into the ones that don’t generate revenue.

#2 – Operations

In this business, we use the word “operations” pretty broadly, but when I use it, I’m talking mostly about the development of your business (and your people) from the inside out. Too often contractor owners become less and less involved with these items as things get busy.

My advice, if you want to steer your numbers upward, is to be involved in 3 key areas of operations daily… and as deeply as possible.

Hiring
A successful contractor owner knows that you always need to be recruiting and looking for new talent. Even if you’re full up at the moment and you’re happy with your staff, tomorrow can bring a nasty surprise if you’re not prepared. Always have a file full of resumes and interview on a regular basis. Good people make for good business.

Training
I realize you have managers, but the most successful contractor owners get involved with and closely manage training. Always be assessing which areas of your company need more training to strengthen the team.

Make sure sales, service, installers, CSR’s, dispatch, and everyone else all have the proper training and the opportunity to strengthen their skills on a regular basis. Learning companies are the most successful companies.

Coaching
As an owner, your role in coaching may be hands-on with your employees, or you might delegate it to your managers. Either way, it’s your job to make sure that the training you spend your time and money to provide is followed up on with regular, one-on-one coaching and support.

#3 – Finance

Whether or not you have a CFO or an accounting team, it’s vital that the owner be involved in the finances of the company on a regular basis. The bottom line is that if you’re the owner, you should know your way around your P&L statement. The key areas you’ll want to monitor regularly are..

  • Sales results vs goals
  • Labor and material costs
  • Gross profit
  • Overhead costs
  • Profit to reinvest or take out of the business

You might look at other areas too, but these are the numbers you should be able to recite off the top of your head. If you’re not up to speed on your P&L statement, have someone who understands teach you ASAP.

Put this into Practice…

In my opinion, there is no such thing as a problem too big to handle. All you have to do is break it down. So don’t get overwhelmed here, just take the first step.

For today, I want you to simply start gathering the information you need in each area with the ultimate goal of creating snapshot reports that you view weekly and take action on to increase your results.

Marketing:

  1. What are your marketing campaigns?
  2. How much do you spend on each?
  3. How many calls do you get from each campaign?
  4. How many of those calls are booked?
  5. How much is sold on each call?

Operations:

  1. Are you adequately staffed? If not, list out who you need now, in 6 months and in 1 year.
  2. Is your team trained properly to generate the most revenue for your business? If not, list out the training gaps.
  3. Are you regularly coaching your team to excel?

Finance:

  1. What are my weekly, monthly & yearly sales goals?
  2. What are my labor and material costs for each job?
  3. What is the true cost of my overhead?
  4. How much gross and net profit am I making daily, weekly & monthly?

Remember, everything else needs to be eliminated, delegated, or scheduled for later. The BIG 3 (Marketing, Operations & Finance) can either keep you from growing, or catapult your company above and beyond your goals… and they need YOUR attention every day.

Make them your primary focus.

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