Wednesday, December 31, 2014

How to Make 2015 Your Best Business Year Ever!

Are you constantly struggling with financial headaches in your construction business?

Unfortunately, most contractors are because they do not understand their business metrics.

One of the first things I'll do with a new client who wants their business to be a better success, and after I've helped them sort out their financials, is to do a budget.

It is amazing how they change their results simply by learning a new mindset. It isn't easy, it does take time, but the results are worth it.

Let me simplify it for you.

Think of your business as a bucket. At the bottom of the bucket is a hole. We'll call that hole spending. How big it is, or how small, depends on your spending.

Think of the amount of water you pour into the bucket as sales. Sales depend on how much water you can collect and carry. As you pour your water into the bucket, some of it, maybe all of it, runs out of the bottom. Which means, you need to collect more water (sales).

So, the more water you can keep in the bucket from running out, the more money you'll have in your account. The idea is to maintain the correct level of water in the bucket at all times. It is all about control.

Budgeting is one of the tools you use to control the size of the hole. The smaller you can make spending, the longer it will take for the water to run out.

I like to have my clients develop a strategic business plan. Then, we turn that plan into a budget. Think of your strategic business plan as your map of where you want to go, and your budget as your GPS. When you add monthly reports on your progress, you now know your variances and what you need to do to keep on your course.

I realize it is over-simplified, but I hope you've got a better idea of its importance.

No matter how busy you are, try to find some time over the next two weeks to reflect, think, give and plan.

Meanwhile …

I’m offering a free report titled: “7 Ways to Kill Your Construction Business Overnight!” It will help you to avoid the problems that plague most contractors. Click on the title to get yours today!

And remember, do not neglect to commit to set this business planning time aside, or you will find that the business of life can and will get in the way.

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