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Old 03-07-2019, 10:40 AM   #101
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Yes, but not drastically more. In fact you can use a calculator made just for that if it is easier. You can set up a spreadsheet with it too.



Business decisions should be made on good accurate data, data that reflects the true day to day operations. This is exactly why you shouldn't be using this "Unicorn" data to make any type of business decisions.

Unless they are the norm, they need to be excluded when running certain numbers, like an average ticket. The jobs count to your bottom line, they make you profit and that is great, but they are not a true representation of what you normally do.

Let's say you include those large numbers when trying to figure out what advertising is working. You calculate it out and find that the $1k a month you spend on Home Advisor is brining you in $20k a month, so you keep dumping in money to HA and in fact bump up the budget.

Low and behold you don't seem to be getting the return that you thought you were. Why? Because the outlier job skewed the numbers and made you think something was working and more valuable than it actually was. What you thought was making you money, was really just breaking even or even costing you money.
I never really thought of this at all. Thanks for posting it.
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Old 03-07-2019, 08:39 PM   #102
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Let's say you include those large numbers when trying to figure out what advertising is working. You calculate it out and find that the $1k a month you spend on Home Advisor is brining you in $20k a month, so you keep dumping in money to HA and in fact bump up the budget.

Low and behold you don't seem to be getting the return that you thought you were. Why? Because the outlier job skewed the numbers and made you think something was working and more valuable than it actually was. What you thought was making you money, was really just breaking even or even costing you money.
That is a very good point, and one I hadn't considered.
However, in the scenario above, IF the 1k/mo to HA only yielded 1 job BUT the one job was worth 20K (highly unlikely), wouldn't it still be worthwhile to continue to invest in that lead source?
I agree that if you're looking at it over a short period such as 1-3 months, those larger figures will skew the data.
But presumably, over a longer term (1yr+), HA would produce sales of varying size and it would average out no?

And that raises another question: over what period of time is it most valuable to look at average sales numbers?
Are you saying that it is more beneficial to look at average sales/job on a weekly-monthly basis?
That would make sense if the objective was to monitor trends in short term sales performance.
I'm genuinely curious Switched, how do you do it?
Are you crunching sales stats for each tech on the weekly or over a longer period of time?
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Old 03-08-2019, 08:33 AM   #103
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I’m not switched, but I think all of the periods are important. I look at my daily sales (and other categories) , weekly, monthly, quarterly. The longer periods are good for understanding your averages and trends. Shorter periods better for measuring your immediate production. If you are interested in growth you compare each period with the previous or last years chart. Knowing how to read your reports is a basic business skill.

The longer periods will help you see how well you do when you factor in the one big job vs many small ones.

Profit and loss
Expenses by category
Cost of goods sold
Labor expenses

Check them all
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Old 03-09-2019, 02:04 PM   #104
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Iím not switched, but I think all of the periods are important. I look at my daily sales (and other categories) , weekly, monthly, quarterly. The longer periods are good for understanding your averages and trends. Shorter periods better for measuring your immediate production. If you are interested in growth you compare each period with the previous or last years chart. Knowing how to read your reports is a basic business skill.

The longer periods will help you see how well you do when you factor in the one big job vs many small ones.

Profit and loss
Expenses by category
Cost of goods sold
Labor expenses

Check them all
Thanks, this is very good advice!
I'm OK at reading the reports and understanding what they mean, but I do not do it consistently.
The other issue I do have is that I tend to overthink / over-analyze the reports and confuse myself as to whats really important.
I understand what KPIs are, but have never really taken the time to establish them for my business.
What would you recommend for a good (simple) set of financial KPIs?
Also, do you recommend any other tools for analyzing the financial data?
I use QB but have not much success with generating good charts or graphs (instead I just stick to reading the reports, mostly the P&L and am primarily interested in my %gross profit and %net profit).
Exporting to excel is an option, but my excel skills are also pretty basic.
Any recommendations?
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Old 03-09-2019, 11:40 PM   #105
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Thanks, this is very good advice!
I'm OK at reading the reports and understanding what they mean, but I do not do it consistently.
The other issue I do have is that I tend to overthink / over-analyze the reports and confuse myself as to whats really important.
I understand what KPIs are, but have never really taken the time to establish them for my business.
What would you recommend for a good (simple) set of financial KPIs?
Also, do you recommend any other tools for analyzing the financial data?
I use QB but have not much success with generating good charts or graphs (instead I just stick to reading the reports, mostly the P&L and am primarily interested in my %gross profit and %net profit).
Exporting to excel is an option, but my excel skills are also pretty basic.
Any recommendations?

Iím no expert. But as I understand, your key performance indicators are pretty much as a standard based around your revenue and profit. As a matter of getting a grasp on how your numbers relate to your business performance you need to first of all set realistic goals and use the reports as a means towards analyzing your actual progress towards those goals or maintaining the maximum efficiency in your production / profitability. For this you need to be checking your year over year, quarter over quarter revenues and also your net profit is a great number to watch over time. For shorter term performance indicators check your gross profits job to job, or over a shorter period of time, especially as you are looking to increase productivity.

But it all has to be done with the backdrop being written long and short term goals. For me, this awakening happened when discussing hurricane repairs, someone here suggested I could be doing 25k in sales a week with my then 4 man crew. I wasnít anywhere near that sort of revenue, but that got me thinking and pushing some ideas around in my head. It became my goal to do $75,000 a month in sales. Made some significant pricing changes, made some scheduling changes. My average gross profit went from around 35% to close to 45%, and was able to exceed my sales goal the next month. Right now i have 3 men and maintain a very consistent revenue - my 90 day report always looks the same even if the month to month my fluctuate a bit, I have greatly reduced the volatility that I was experiencing before and improved my own sales tactics. Getting away from hourly jobs more was one of the changes I made as I had daily sales goals and my pricing began to reflect that. My goal is to maintain these numbers- they are comfortable and

Iíd have never dreamed it 3 years ago, but now in my 3rd year of business, and 3 employees, Iíve done almost $220,000 in sales since Jan 1 of this year. I did land a couple sweet projects and this is the product of a very high demand for electric service in a still recovering disaster area, but I have bowed out of disaster repairs and finding the people who are willing to pay top dollar for quick service. We also opened the door for overtime and have been doing some night time and weekend projects.
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Old 03-10-2019, 02:39 PM   #106
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Iíd have never dreamed it 3 years ago, but now in my 3rd year of business, and 3 employees, Iíve done almost $220,000 in sales since Jan 1 of this year. I did land a couple sweet projects and this is the product of a very high demand for electric service in a still recovering disaster area, but I have bowed out of disaster repairs and finding the people who are willing to pay top dollar for quick service. We also opened the door for overtime and have been doing some night time and weekend projects.
Those are some good solid numbers to be starting out the year with, looks like you'll be on track for closing close to 1M this year!
Also, thank you for the above advice (stuff I kinda already knew, but have been ignoring...).
I'm going to start looking at my KPIs on a more regular basis.
Definitely agree with putting any kind of goals, sales or otherwise in writing.
Lately I've been taking the "Hope & Pray" method of sales, but no more.
I need to write my goals down, look at them every day and JUST DO IT!
Good move to get away from the disaster repair work.
Its a short term boom, but you want to be ahead of the curve BEFORE it all dries up.

Out of curiosity, how much time to you spend on the tools vs selling/managing?
Do your techs sell, or just you?
If the techs are ONLY doing installs (no sales) do you have an average figure of how much each produce annually ie revenue(or manhours)/tech/yr?
OR if your techs do sell how much can they sell vs what they can produce?
I'm interested because as I grow my business I'd like to be able to project manpower needs: hire too soon and theres not enough to go around, too late and then I get sucked back into being on the tools full time and cant run my business.
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