KickStart: STOP🛑 losing money BEFORE you focus on increasing gross sales. Read on…
Profit: “The revenue remaining after all costs are paid. These costs may include labor, materials, interest on debt, and taxes.”
Ah yes, that wonderful and too-often elusive word, “profit”. And yes, as a Home Service Business owner you need (and deserve) LOTS of profit.💲💲💲 (Which should be calculated AFTER paying yourself a fair wage for your labors.)
To me money (and profit) should just be a means to an end. The “end” goal of achieving wealth? To gift yourself (and your family) a life of Personal Freedom! This leads us back to one of my ‘Core Concepts’: “More money is better than no money!” Am I right… or am I right?
“More money, Steve? That means I need to do more work, right?” 🤔 Maybe. But even better is to first…
FIX the Profit-sucking ‘Black Holes’ in your business!
Here’s why this is so important. The tendency is to obsess on growing gross sales! (Most of us are macho entrepreneurs, after all!) But it is much more productive to analyze and root out these profit-sucking business sink holes. If you continue ignoring them they’ll sneakily suck the profits out of your company!😲 Here’s some Profit-sucking Black Hole (PBH) candidates:
PBH #1: Pricing your residential services way too low. (Many of my students desperately need to raise their prices… and don’t even know it!) WARNING: Far too many in our Home Services industry have fallen into the old trap of “Losing money on every job but making it up in volume”!😣
SOLUTION: First, collect accurate production numbers and times. (Do you know EXACTLY how long each service takes a worker to perform? You should!) Second, do a ‘deep dive’ into your accounting reports. Analyze your business income and overhead with your accountant or a business mentor. Then suck it up and CHARGE MORE! Here’s WHY you must do this!
You hate accounting? (Me too!) But remember, “Every number tells a story”! And to motivate you? Focus on how your ‘life story’ can accomplish- Achieving the ever-elusive ‘Personal Freedom’!👌
PBH #2: Marginal customers. For me, defining a ‘good client’ had nothing to do with the value of the home nor the income of the home owner! Instead, I wanted loyal customers that valued our work AND the high-end service we provided. (Bonus points for homeowners that morphed into delighted Cheerleaders!)
SOLUTION: ‘Service Engineer’ the delivery of the residential services your employees perform. (And hire the Very Best People (VBP) that high-end home owners feel comfortable with.) Plus, have I mentioned “raise your prices”?🙄
NOTE: Quality, high-end clients are correctly suspicious of cut-rate home service providers. (Who can blame them?) Charging higher prices really will attract more of the customers you want.💖
PBH #3: ‘Marginal’ workers. Sure, in today’s brutal labor market hiring ANY employee is tough right now. And yet, I still beg my clients to ‘never settle’. A loser (or even ‘non-engaged’) employee is destructive on ever-so-so many levels.
Marginal worker’s production and initiative will always be lower than the ‘Very Best People’. Even worse, the VBP will bring everyone in your company down including you!😥
SOLUTION: Develop ongoing recruiting/hiring systems to avoid the dreaded ‘Desperation Hiring’. NOTE: I share 100’s of recruiting and hiring tips and systems in our 3-hour, online SFS: Hiring the Very Best! LIVE seminar. To learn more and/or easily register online click HERE.
Folks, I realize that the three profit-sucker’s above are no-brainers. I’m sure you’re already focused on them! 👍👍 But other less obvious PBH’s may be flying under your radar. Let’s focus on these extremely dangerous Profit-sucking Black Holes very soon!