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Opinion: Simple planning tracks job pay, performance

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Do you know if your prices are right? Do you know if you are properly bidding your jobs?

The bottom line is the bottom line. Pat yourself on the back, if you are making all the money you want, if you are providing a real retirement investment program for yourself and your team members and if you could take a major hit to your business (disaster, disability, divorce?) and still be in positive cash flow. And if that is true, you can stop right here.

If not, you can fix your business and get really profitable. Money buys options – for you, your family, your team and your community.

I love a selling price increase because it is the only thing that you can do – mathematically – that will increase the top line and the bottom line without creating any additional expense.

I always support a selling price increase. You deserve it for the wonderful, valuable and risky work you do.

However, it is a good idea to also determine if you are putting enough hours into your job bids and flat-rate tasks.

Got the time?
Here are the essentials of job costing:

• Compare the bid to actual labor hours. Don’t convert to dollars. Too much “voodoo” goes into that calculation. Match hours bid to the actual hours it took to do the job.

• Compare the bid material cost in dollars to actual material cost in dollars.

• You also could track permits and subcontractors, if you use them.

Now, it’s time to keep track of the jobs.

Create two job folders for every job – a blue folder and a red folder. Both of these folders go in a hanging folder in the office.

The red folder is the office job folder. It’s red because it should flash as a warning, if it is ever outside of the office.

In the red job folder, include:

• the original signed bid/agreement;

• the bid pricing form, which should have the number of hours bid and a list of the materials and their estimated costs;

• permits and required job forms;

• plans and specifications;

• copies of customer invoices;

• copies of customer payments;

• the priced invoices for the actual materials used; and

• anything else that will help you deliver this work as promised, stay in compliance and properly account for this job.

Fill the blue job folder with copies of the information found in the red job folder. This is the folder that the team can take with them on the job.

Customize my list to work for you. The idea is that the installer has the information he needs to bring the job in as promised. Yet, he doesn’t have the only copies.

Live and learn
Once a week, measure your performance with your team. Meet with the salespeople and the installers.

Call out the assembled actual performance numbers – hours and dollars – and have the lead installer tally up the jobs.

Celebrate jobs that come in at or below bid. Learn from the ones that don’t. Work together to develop efficiency without unrealistic expectations.

If you are nailing the jobs for hours and materials, and you are still not making the money you would like to make, you have one more thing to do: Raise your prices.

See, business is easy.

Ellen Rohr is an author and business consultant who offers systems for getting focused and organized, making money and having fun in business. Her latest book is “The Bare Bones Biz Plan.” She can be reached at ellen@barebonesbiz.com.
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