"It was the best of times, it was the worst of times..." That's how Charles Dickens started off his classic A Tale of Two Cities, but it's also a fitting opening to this tale of two contractors. The contracting business can bring the best of times for those that master it and the worst of times for those who don't. Consider these two contractors and their tales.
Busy Bob fights an uphill battle. He drives to work in the wee hours of the morning dreading what his day will bring. He's at the office long before his employees. He's understaffed and is stuck in the truck running the few service calls he has. He can't pay his employees the wages they deserve and can barely scrape the money together to pay the bills every month. His suppliers call every day to collect what he owes them.
Bob's technicians drive shabby-looking, nine-year-old trucks since there's no way to afford new ones. He's unable to provide health care and 401(k) plans for his team, and he has no plan for his own retirement. He'll be the last one leaving the office tonight. His business is running him, and he'll be stuck working there until the very end.
Now, contrast that with Profit Pete. He peacefully drives to work each morning in his brand-new pickup. He doesn't have to be the first one into the office, and, in fact, he rarely is. He spends just a few hours a day at the office to check on their goals, look over the numbers, applaud his team, and make sure all is running smoothly. His employees are excited to work there because they receive the highest wages and the best benefits.
In Pete's world, his customers love the service they receive and often refer their family and friends. He has the highest-paid and best-trained technicians. His fleet is made up of the brightest trucks that he buys new every three years. His business is building him wealth, and he'll be able to retire worry free.
Profit Pete doesn't worry about having the money to pay bills and make payroll because it's all in his plan. He's running his business and working on it rather than in it.
Welcome To Money TalksOver the next 12 months, you'll discover what it takes to leave a Busy Bob business behind and become Profit Pete - or if you're already Profit Pete, what it takes to stay there. My aim is to show you how to make contracting the best of times.
How does Profit Pete create the best of times? What is he doing differently than Busy Bob? Everything boils down to this simple idea: Make money every day.
By focusing on making money every day, you'll create the money you need to pay your suppliers, pay your employees, buy new trucks, serve your clients, train your people, and happily retire.
How does one make money every day? Glad you asked.
Over the years, looked at thousands of financial statements, talked to owners, managers, and employees, and from that experience, I've learned what it takes to make money every day. It all stems from these 11 simple ideas:
1. Price for prosperity.
2. Have a budget and plan.
3. Receive your financials in a timely fashion.
4. Departmentalize your financials.
5. Control your accounts receivables.
6. Focus on sales daily.
7. Manage your expenses.
8. Manage your labor.
9. Focus on creating clients.
10. Recruit the right people.
11. Train your people for success.
By focusing on those ideas every day, you'll be creating the best of times in your business and your life.
Welcome to "Money Talks," Profit Pete.
Next installment: Everything starts with being priced right. The right pricing puts your company on course for prosperity, while the wrong pricing will drive you straight to poverty.
Nicholson is president of AirTime 500. For more information on AirTime 500, call 800-505-8885. Nicholson can be reached by e-mail at firstname.lastname@example.org.
Publication date: 01/26/2004