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Financials | Know and Show Your Numbers

Are You Frustrated with Up and Down Cash Flow?

DO YOU UNDERSTAND THE KEY NUMBERS THAT DRIVE YOUR BUSINESS?

DO YOU KNOW THE DIFFERENCE BETWEEN MARK UP AND MARGIN?

Financial Systems

“After back costing our jobs we found out we were losing money on our ‘best’ client making 19-21 trips to simple house builds!  We’ve changed our processes and improved our gross margin from 18% to now making 36% – 38%.  We now price work to make money rather than to just get the job.  We now have a strong management team in place including an Operations Manager, Office Manager, and Pricing Manager so I can work on the business.  Sales have grown by $1.6 million and we’ve taken on 6 new tradesmen.”

Mark Watkins – Advanced Plumbing

Gross Margin Analysis

Are you pricing with sufficient “fat” in your jobs to cover your fixed costs and leave a decent profit to you? Have you got a target gross margin for each type of job?  Or do you simply use a “mark-up” on your costs?

Monthly Profit and Loss

Do you run a monthly Profit and Loss Statement and compare this to your monthly budget?  Your Profit and Loss will tell you whether you’re making money in real time rather than waiting 12 months till your accountant gives you the good (or bad) news. 

Cash Flow Management

Have you struggled to pay wages, merchants or the taxman even though you think there is plenty of fat in your jobs?  Plenty of good Plumbers or Sparkies fail due to poor cash flow.  A weekly Cash Flow Forecast (a prediction of your bank balance) is an essential tool for Tradies who want to sleep well at night!

Back Costing

Do you track budgeted costs throughout your large jobs?  Can you tell if you are on track?  Can you see the consequences of variations to your projected job profit? Without accurate and timely project reporting you run the risk of budget blowouts.  And early information gives you the chance to drive the guys hard to pull the project back and keep on track.

Key Performance Indicators

Do you have a set of key numbers that you check at least monthly to ensure your business is on track? KPI’s give you an early warning of what areas in your business you need to address. Examples of KPI’s include monthly sales, Gross Profit Margin, the number of new leads, conversion rate, on-site productivity, labour utilisation and client satisfaction.

Pricing Systems

Do you have pricing templates and use set or unit prices to streamline your pricing and invoicing process?  Can your team give clients a price on the spot?  Do you check that all charge-up invoices are hitting your target margins prior to sending?

Accounts Receivable Process

Have you got the right Terms of Trade and are you getting them signed by your clients.  Do you have a written process to collect payment from clients including following scripts and letters and debt collection?  Getting paid is the number one rule in business and slow payers are one of the main stress points for Plumbers and Electricians.

See what others are saying

Damian May

“Before I met Tony and joined the program I was working 18 hour days and only returning a 17% gross profit margin.  I been on board now for six months and in that time we’ve increased our profit margins to 35%, making more money and spending a whole lot more time off the tools.  Plus we’ve got our cash flow under control which is a massive weight off my mind.”

Damian MayOwner2e Electrical
Paul Roberts

“The number one benefit of coaching was the accountability – someone keeping you moving on those more important projects than the day-to-day running of the business.  Having to show someone your results and do what you say you will do is a massive help.”

Paul RobertsOwnerBase Civil
Graeme and Michelle Hopkins

“Joining the Million Dollar Tradie program has been life changing for us.  We’ve gone from a small business with Graeme working on the tools to having a team of guys, new office systems and freeing up nights and weekends.  We are now pricing for the right margins and have increased our margins by over 30% which has made a huge difference to our cash flow and profits.  We now feel like business owners!  The future is very exciting.”

Graeme and Michelle HopkinsOwnersGroundcover Landscaping
Chris Coopey

“We went from feeling like ‘slaves to our business’… To taking a holiday, systemising the business, refocusing our team and increasing gross profit from 30% to 45%.  We’ve increased out net profit hugely over the last 12 months and the Million Dollar Tradie program has been invaluable.”

Chris CoopeyOwnerK10 Plumbing

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What are the next steps?

Are you a Plumber, Electrician, Gasfitter or Drainlayer that needs more profit, time and freedom?
Simply get in touch with the team today by calling (07) 859 3425 or fill in the form below

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