You Must Have A Budget And A Business Plan
If you want to make money every day, you must plan to make money every day. Success doesn't just happen. You have to make it happen. As a business owner, that requires two very important tools - a budget and a plan.
Who Needs 'Em?You're doing fine, right? Who needs a budget or a plan? Well, if you want to become "Profit Pete," then you need a profit plan.
It's rare to find a successful business that isn't based on a successful plan or that doesn't stick to a budget. Successful contractors plan for success. Those without a budget and plan are only planning to fail.
Last month, I showed you the basics of pricing. That's step No. 1 in making money every day. Once you have your prices set, it's time to look at the big picture and figure out how to get where you want to go.
How much profit do you want to make next year? How much revenue will you need to get there? How many calls will you need? The answers to those questions and the steps you must take to achieve them all come from planning.
Planning BenefitsCreating a profit plan for your business gives you goals to strive toward. If you don't have a goal to aim for every day, how will you ever know if you've had a good day or if you're getting closer to your yearly goals? Without yearly goals to aim for, how will you keep your business on track to end up with a profit at the end?
Budgets and plans also force you to stop and take a look around. In the busy, hustle-bustle world of contracting, it's hard to find the time to stop and see where you're going. Having a budget and a plan will force you to do so.
The independence of contracting is what attracts many, but that same independence can be detrimental to your success at times because there is no one there to hold you accountable. Planning provides you with that watchdog to keep you accountable. With goals to meet and a budget to hit, you'll be more likely to do what it takes to stay on track for success.
What Do I Have To Do?Budgeting and planning may not sound like the most exciting things to do, but if you're going to be successful, you have to do it. Start by taking a look at what you've done.
What kind of revenue have you done in the past? How many calls can you expect to get in a given month? Creating a plan starts with knowing where you're at, so take some time to take stock.
Once you know where you're at, you can plan on where you want to go. What revenue goals do you have for this year? Don't aim too high, but you should shoot for a goal you can reasonably hit given where you're at today.
For instance, if you're generating $100,000 today, there's little chance you'll hit $3 million tomorrow without a huge string of acquisitions. Start with manageable goals and work your way up.
After you have your goals for the year, simply work backwards to create your plan. How many calls, based on your average invoice, will you need to hit your revenue goal? What marketing will you run and when will you run it to get those calls? How many technicians will you need to run those calls? Eventually, you can determine what you must do every day to hit your goals at the end of the year, but you won't hit them unless you plan on it.
Start planning your future, and you'll be one step closer to mastering the art of making money every day.
Next month: If something in your business is keeping you from meeting your goals, you must have the ability to quickly change it to keep your company on course for success.
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: 03/15/2004