If you’re like most business owners who run a trades or home services company, you love to work hard, push through challenges, and get things done no matter what it takes. This entrepreneurial ability is likely what has driven your success so far, and has helped you create your business as it stands today.
As a company grows, however, a different set of skills becomes necessary in order to take your business to the next level. Executive-type traits increase in importance as a company grows in size, and the ability to simply “grind it out” is no longer enough.
Having worked with hundreds of successful and fast-growing home service companies, we know that taking time to create a robust plan for your 2019 year is the single most important thing that you can do as a business owner in the coming months. Just as with NHL coaches or military generals, business owners who come into a year prepared with a strong plan will always deliver better results than those who do not. If you are serious about 2019 being a year where you grow your business, make more money, and have the time you deserve, then these three keys for constructing a strong Business Plan will be imperative for you in the coming months.
The average business owner running a trades company will work about 2,500 hours in a year. While it would make sense to take about 1% of your work time (perhaps 25 hours) and devote it solely on creating a strong plan for the other 2,475 hours of work, most entrepreneurs do not. You’ve likely felt yourself get too busy to plan the next big moves in your business, and you end up working so hard that you have no time to think ahead.
Our members at Breakthrough Academy always carve out two full days in the first week of December (which are fully blocked off) for creating a robust Business Plan for the upcoming year. Here are some best practices for those two days:
Over the course of the two days, there are some key planning items that should be covered. A rough agenda should look like this:
All great things in business are created twice – once in a leader’s mind, and then in reality. Every annual business planning session should begin with dedicated time to think about the business and lifestyle that you want to build in the coming year.
From that vision, a profit goal should be derived. How much money would it take to fuel the lifestyle you want, while also allowing you to leave enough money in the company to foster future growth?
Once you have your profit goal, you can build a detailed budget for each revenue and expense line item. This becomes the guiding star for the year and should be reviewed monthly against actual results, allowing you to make changes and improvements in real time, and throughout the year.
Download our ready-to-use Budgeting Template and Instruction Guide to get started.
Having a defined revenue goal at the top of your budget is great, but it often takes a more detailed monthly plan in order to ensure that you can achieve it. It is a proven principle that companies who break down annual revenue goals into monthly, “bite-sized” chunks are more likely to achieve the overall goal for the year.
Revenue generation requires two things:
Mapping out your monthly goals for new leads, estimates completed, and jobs booked is a key part of creating a sales plan for the upcoming year. It allows you to understand what needs to be done each month in order to bring in the required amount of sales for your annual goal.
From there, a production plan with monthly targets will allow you to create a realistic roadmap to your year-end revenue goal. From it, you can derive the number of staff and/or subcontractors that will be required in each month of the upcoming year.
Keep in mind that your sales and production plan should be created during your 2019 business planning session in December, right after your budget has been completed. Our ready-to-use Sales and Production Planning Template and Instruction Guide is a great resource to use for this.
Following this process, among other business improvements, has allowed our members at Breakthrough Academy to grow their revenue by an average of 43% in one year, and to grow their net profit by 66% in the same amount of time. This proven business planning process has been used by successful business owners for decades, and is a staple in all high performing organizations. If you’re driven to grow your business, make more money, and regain your time, it’s time to apply these three keys and begin constructing your 2019 business plan.
– Danny Kerr
I’m going to explore some common habits we all have that trap us in the day-to-day, then give you the quickest, no BS way for freeing up time and improving your trades business.
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