For over a dozen years,
NSPG has been providing the tools that allow contractors to
increase profits and minimize business hassles. With our
simple-to-use-tools, you can make being a business owner
what you always wanted to it be -
successful, profitable and rewarding.
Are You
Big Enough?
One of the most
difficult decisions any company has to make is
how big
is best. Most one to three tech companies want to
grow larger. Many larger companies long for the
"good old days" when they were smaller. Last
month, Gene Burch gave his views on this issue in a message to
the Plumbers Discussion List.
He hammers home the need for
all of us to take a hard look at our numbers, and to
take the time to think about where we'd like our
business to go.
I feel, if you have a good
system in place and are charging what you need to in
order to make a profit; you can make it with 1 truck, or
5 Trucks. I favor having 5 or 6 trucks, because you can
control it without having too many people in the office,
and you have a lot of billable hours to play with to
help keep good cash flow. Also, you have more
flexibility in covering other Techs due to vacations,
jury duty, illness, etc.
The never ending problem
most one man bands deal with everyday is if they do not
work, there is no money coming in period. If they go on
vacation, they have to work seemingly endless hours
trying to get ready to go, and face even more hours
trying to extinguish the raging fires burning out of
control within their company when they return.
Is it a problem finding
five or six good Techs? Boy Howdy is it! However, no one
ever said going is business was going to be easy.
That is why something like 85% of them fail the first
year.
When working with all kinds
of business's over the years, one thing that stands out
is the overhead for a one man band is the highest of all
companies. This is because they can only bill out a
limited amount of hours a year while trying to balance
some sort of home life with the mind numbing effort
required too run a successful company while doing
everything themselves including working in the field.
I have found many of these
folks are under the misconception that they have very
low overhead when in reality when you run the numbers
accurately including productivity loss, you find their
breakeven number can sometimes be in the $200 / hour
plus range.
 I feel that one can only do
this business thing for so long without getting help
and/or relief of some sort. Once again, this does not
just apply to plumbers only. It is the common
denominator for most small businesses
Just my thoughts,
Gene Burch
G B &
Associates
Whatever size you choose for your
company, you've got to do it right. You need to
create a business that allows you to set goals and
benchmarks tied into your Flat rate system.
Without this, you will not know if you are succeeding no
matter the size of your company.
The owner/manager needs to know what
their job is and how to measure their own performance.
He must be able to communicate the tech's goals and
benchmarks and offer coaching to increase the
performance of the specific benchmark.
If you need a hand setting your goals
and benchmarks, give Mike Conroy a call or drop him an
email at
nspginfo@nspgweb.com.
He can help you combine your current numbers with your
target company size, so you can set measurable
benchmarks and build your own right-sized company.
Measure Monthly, Adjust Quarterly
& Achieve Annual Profit Goals
IRS Guidelines for Energy Efficiency Tax Incentives
TIAP has links
to new IRS guidelines on the new federal tax credits
for energy-saving technologies and practices. For
existing homes, homeowners can claim credits totaling up
to $500 for any combination of eligible measures
installed in their primary residences.
 A
credit of 10 percent of material costs for:
- Insulation
- Windows, storm windows, storm doors
- Sealing to limit air infiltration.
A
credit of $150-$300 for heating and cooling equipment and
a credit
of $300 for water heaters. All items must
meet efficiency standards explained on the IRS site.
 Manufacturers or contractors must provide purchasers
with a certification that a measure is eligible for the
tax incentives, so it will pay to understand these new
rules.
As
we've said before, your low-ball competitors will
probably not know the details of these programs and will
not use them effectively to sell their services.
Are Your Prices
Keeping Up with Reality?
Here's a news item that directly relates to your
business that you may have missed.
WASHINGTON — Consumer prices galloped ahead in
January at the fastest pace in four months, especially
pinching the wallets of motorists and other energy
users. But excluding energy and food, inflation was
moderate.
 The government's most closely watched inflation
barometer, the consumer price index, advanced 0.7%.
A separate report showed that workers' average weekly
earnings, adjusted for inflation, dropped 0.4% in
January from a year ago.
For
most workers last year, paychecks didn't keep pace with
inflation.
The main factors behind January's higher CPI reading
were rising energy and food prices. Energy prices
rose 5% in January, the most since an 11.8% surge in
September.
So, the
message that most people hear on the news is that
inflation remains moderate. What they
are really saying is that your costs are probably rising
at the highest rate in more than a decade. Are
your profits keeping up?
The other
part of this cost equation is workers' paychecks.
Are your employees falling behind? Will they be
looking to your competitors to try to
improve their financial situation because their wages
aren't keeping up with inflation?
It's
important that you keep track of your costs to be sure
that you're making money, and also that you're paying
your employees what it takes to keep your team together.
Just
another reason the Crunch your Numbers and update your
Price Books regularly. |
Most
of us use our cell phones all day long. We store contact
information and even photos on a tiny device that we
constantly bang around and generally abuse. When
your phone crashes, and chances are it will, you could
lose everything stored in it. With
