#36: Moving The Needle of Profitability & Cashflow
You’ve worked hard. But instead of feeling elated when you look into your books, all you get is a sinking feeling. Why do the numbers say you made less money than you expected? What went wrong? It’s a terrible situation and believe me, it has happened to me before. I understand a lot of trades business owners are stuck in a similar rut which is why we will tackle how to improve your cash flow and your bottom line in this episode of our podcast.
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1:00 The labor efficiency rate, what is it?
- Determining how efficient your labor is in generating revenue
- Why you should complete 3 times the amount of work for every dollar you spend in labor
- Improving revenue by cutting down on labor costs
10:30 Do not underestimate the power of estimating (pun intended)
- The pitfalls of pricing too low and pricing too high
- Using pricing to get recognized as a premium brand
- Markup vs. margin as profit
- How underestimating profit margin will lead you into going out of business early
18:00 Deposits and collecting payments on time
- A practical method for solving cash flow problems in your business
- When deposits are and aren’t needed
- How to use deposits as a marketing tool
- Tips to eliminate the burden of collecting payment
30:00 Creating an annual budget map
- Looking back to episode #32 of Contractor Momentum here https://contractormomentum.com/podcast/32-operating-a-trades-business-as-an-investment-the-soc-method/
- Getting a clear picture of your company’s performance financial-wise
Apply these tips and you’re on your way to improving your bottom line and reducing expenses!