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On Target Contractor’s Blueprint Chart Your Course to Business Success. On Target Business Intensive: Session 7. Implementation Steps so far. Session 1 Create a working draft of your Mission Statement Create a working draft of your 1 and 5 year Vision

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on target contractor s blueprint chart your course to business success

On Target Contractor’s BlueprintChart Your Course to Business Success

Advisors On Target

On Target Business Intensive: Session 7

implementation steps so far
Implementation Steps so far
  • Session 1
    • Create a working draft of your Mission Statement
    • Create a working draft of your 1 and 5 year Vision
    • Answer the 10 questions on the handout
  • Session 2
    • Review your own financial statements and chart of accounts with what you learned in Session 2
  • Session 3
    • Create a budget for 2013 (or at least the last quarter)
    • If you already have a budget, review and revise as needed
    • Use the cash flow projection model (at the bottom of the budget tool)
implementation s teps cont
Implementation Steps (cont.)
  • Session 4
    • Determine your breakeven point for your 2013 budget
      • Annual
      • For the month of October 2013
    • Define Target Market
    • Do a Competition Analysis
  • Session 5
    • Fill in information for Target Markets, Competition and Marketing Strategy (Marketing Plan – Parts 1, 2, 3)
    • Create a Marketing Budget using the template
  • Session 6
    • Outline Customer Communications Plan
implementation steps cont
Implementation Steps (cont.)
  • Additional activities
    • Values Exercise


agenda for today
Agenda for today
  • Recap last week
  • Sales Goals and Marketing Budget
  • Tracking your marketing and sales
  • Job Profitability
    • Job Costing
    • Job Profitability Tracking
    • Working with your Production Team
  • Client Process System (begin- finish next week)
    • Lead Intake
    • Sales Follow Up
    • Job Process
    • Ongoing Relationship
sales forecast sales goals
Sales Forecast/Sales Goals
  • Provide a month by month sales forecast for the next year based on
    • Historical Sales
    • Market Research
    • Seasonal Flow
    • Growth Assumptions ( Budget)
  • Project Number of Leads/Bids required to achieve sales goals
    • Average size job
    • Close Ratio
    • Lead to Bid Ratio (use 95% if you don’t know)
    • To calculate required leads: Sales Goal ($) divided by Average size job, divided by close ratio, divided by Lead to Bid Ratio
    • Example: $60,000 sales goal divided by $4,000 Average job, divided by 35% close ratio, divided by 95% = 45 leads needed
why track sales
Why track sales?
  • Track effectiveness of marketing efforts
  • Track return on investment of marketing dollars
  • Track effectiveness of sale techniques
  • Track effectiveness of various sales people – owner, estimator, outside sales person, etc.
sales tracking tools
Sales Tracking Tools
  • Should help you measure:
    • Close Ratio – Bid to Sales
    • Dollar Value Bid to Dollar Value Sales
    • Days to close
    • Lead to Bid Ratio
    • Lead to Sales Ratio
    • Cost per lead
    • Cost per sale
    • Effectiveness of Marketing Tactics
job costing
Job Costing
  • Starts with a good Estimate and Work Order
  • Inform your Production Team
    • Expectations
    • Hours
    • Hours by task breakdown is better
  • Collect Hours daily or weekly
  • Stay on top of Material costs
  • Job cost after every small job and during every big job
  • Debrief in a timely manner
  • Job Costing Example and Tool
    • Quickbooks can also be used as a simple job costing method
put a system in place
Put a system in place
  • Use QuickBooks to keep track of employee hours, materials & equipment charged to each job
  • Implement a tracking system
    • Job Cost each job in QuickBooks or Excel
    • Summarize the data using the On Target Job Profitability Template
    • Or adapt your existing job costing system to be able to look at all jobs
  • Update monthly & review reports
  • Use for evaluating employee productivity - monthly
  • Use for evaluating profitability of types and sizes of jobs – quarterly or semi-annually
gross profit by job
Gross Profit by Job

Total Price

  • Labor
  • Materials

-Equipment rental/other pass-through item

= Gross Job Profit

components of job profitability
Components of Job Profitability
  • Job Type
  • Invoiced Price
  • Materials
  • Equipment rental and other pass-through costs
  • Labor Cost (Hours x average rate or actual payroll for hours worked)
  • Labor Burden (payroll tax and Workers Comp)
  • Bid rate
  • Hours estimated (and added on)
  • Hours actually worked
  • Foreman/person in charge of job
  • Sales person who sold the job
  • Other relevant data – date of completion, job number
  • Other customized data you want to include or track
    • Customer service feedback
    • Materials estimated
    • What else?
set a target from your own budget
Set a target from your own budget

Revenue 500,000

  • Labor (31%) 155,000
  • Materials (9%) 45,000
  • Other Job Costs (1%) 5,000
  • Subcontractors (3.6%) 18,000

= Gross Job Profit 277,000

Gross Job Profit % Target 55.4%

this becomes a kpi
This becomes a KPI
  • Use budget target KPI as a starting point
  • As you begin to track data, your actual company average will emerge
  • High/low performers will show up
  • Re-evaluate & set new targets periodically – company & individual
profitability productivity tracking
Profitability & Productivity Tracking
  • Track the Gross Job Profit % to analyze:
    • Employee Productivity
    • Profitability by job type, by size, by foreman
  • Track the hours bid to hours actually worked by job to analyze:
    • Employee Productivity
    • Accuracy of Hours Estimated
use the data for management decisions
Use the data for management decisions
  • Find out the size of jobs that are the most profitable for your company
  • Find out what types of jobs are the most profitable
  • Discover your company’s average gross job profit
  • Evaluate gross job profit by foreman
  • Use this data as a management tool to encourage employee productivity
implement the system
Implement the system
  • Generate job profitability reports monthly
  • Meet with each foreman monthly to review graphs & reports
  • Use the opportunity for coaching the foreman for increased productivity
coach for success
Coach for Success
  • Share company targets
  • Review data together
  • Receive feedback from foreman
    • What support he needs from you
    • His ideas for improvement
  • Together set personal targets
  • Discuss ideas for improvement
  • Agree on what will be done
  • Arrange follow-up
implementation steps
Implementation Steps
  • Session 6
    • Start Job Costing every job if you aren’t already
    • Implement a system to track job profitability over time to measure progress
    • Coach foremen to improve
lead intake
Lead Intake

What happens when someone inquires about your service?

Call in to office

Direct contact with owner/employee

Contact via web/email

Capture relevant information

Fill out Lead sheet or

Enter Directly in CRM and/or

Enter in Sales Tracking

Schedule an estimate appointment or

Decline to bid

Refer to another contractor

what info do you need to collect at lead intake
What info do you need to collect at lead intake?
  • Name
  • Address
  • Phone
  • Email
  • How they heard about your company (lead source)
  • Type of work (Interior, Exterior, Specialty work, etc.)
  • Time frame
  • Budget
  • Scope of work/Size of job
  • Age of home (pre 1978)
  • Worked with professional painting contractor?
  • What else?
estimate phase
Estimate Phase

Ask pre-determined questions to further qualify client during estimate appointment

Create detailed take-off sheet/work order to aid in creating proposal as well as provide more detailed instructions to foreman

Create master proposal templates

Create master paragraphs for language to include in proposals for standard items

Create a appendix of PDCA standards to attach and reference standards by number in proposal to eliminate the need to add standards to proposal.

pre contract post estimate
Pre-contract (Post Estimate)

Ask additional predetermined qualifying questions if needed

Prepare and send or deliver proposal to customer

Enter Contact info in CRM (if not done previously)

Update Sales Tracking and/or CRM with status

Tickler for follow up

job sold
Job Sold

Submit signed Proposal and Contract to office with deposit

Submit Work Order to office

Assign a job number

Create Customer file in QuickBooks

Enter Estimate and Deposit in QB

Create Field File and Office File

Schedule the job on job calendar

Tentative time frame at least

Send Customer a letter regarding schedule and payments

Send Customer “to do” list

File pre-lien if applicable

Send Thank You to Referral if applicable

Follow up communication with customer re schedule

Update sales tracking or CRM

job scheduled
Job Scheduled

Schedule walk through with customer

Confirm Colors with customer

Confirm customer “to do” list with customer

Follow up with customer regarding schedule if needed

Give file folder to foreman

Order special equipment needed

Materials ordered

what s in the field folder
What’s in the field folder?
  • Map
  • Copy of contract, if appropriate
  • Copy of scope of work
  • Work Order
  • Color Confirmation Sheet
  • Customer Communication Sheet
  • Blank Change Order Forms
  • Customer Feedback form
  • RRP info
  • What else?
job in progress
Job In Progress

Report hours worked daily

Use customer communication form

Give progress invoices to customer

Collect progress payments

Fill out change orders if needed

Get customer signature

Return change order to office

Invoice change orders

Collect Materials invoices/receipts

job wrap up
Job Wrap up

Prepare final invoice

Conduct a final job walk through with customer

Give final invoice to customer

Collect payment

Ask customer to fill out feedback form

Schedule return touch ups if needed

post job
Post Job

Return field folder to office

Contact customer to thank them and answer questions

Receive final payments

Tickler for collections for outstanding payments

Send thank you note (gift if appropriate)

Complete Job Costing

File completed job paperwork

Update customer data in CRM

Tickler for follow up

ongoing relationship
Ongoing Relationship

Customer Communications Plan


Special Offers

Letters/Greeting cards

Gifts (as appropriate)

Telephone calls (as appropriate)

Warranty/Maintenance Follow up

Schedule annual visit or follow up

implementation steps1
Implementation Steps
  • Session 7
    • Sales & Marketing
      • Set Sales Goals
      • Start Tracking Sales and Marketing
    • Job Costing
      • Start Job Costing every job if you aren’t already
      • Implement a system to track job profitability over time to measure progress
      • Coach foremen to improve
  • Client Process System (may move to Session 8)
      • Review Job Process Outline and Job Process Checklist
      • Customize Checklist for your company
      • Start to implement a more organized approach to your job process – add structure a piece at a time