Are you struggling to keep up with the day-to-day summer grind of running your trades business? Not to mention finding time to work on things that move your business forward?
I get it, I’ve been there myself and seen it time and time again. Having grown a multi-million dollar home service business and coached hundreds of entrepreneurs through it, I understand the challenges you’re facing and have also seen what it takes to get through it successfully. So what separates those who work 80 hour weeks to the point of burnout, and those who maintain balance while profitably growing their trades businesses to the next level? Here are the three mistakes that successful entrepreneurs avoid at all costs, especially in the busy summer months:
Mistake #1 – Hiring “B” level staff to urgently fill crews
We’ve all been there – a team member or two quit without notice with a full production schedule coming up, and suddenly you’re scrambling to find anyone that can get work done. What we know is that 8/10 times the rushed hire is not going to succeed in the long-run, and that no employee is worse than a bad employee. After painfully learning this lesson myself multiple times, I’ve gone to great lengths to push back my production schedule (often with an annoyed customer on the phone), because I know that it is the right decision in the big picture.
So the next time one of your employees suddenly quits, take a breath and follow this process:
Our members at the Breakthrough Academy follow a methodical recruitment process to attract “A” talent and select the best candidates through behavioural interviewing. For a complimentary copy of our hiring templates and guides, hit the download button at the bottom and we’ll send them right over.
Mistake #2 – Lack of focus on gross profit margin
Gross profit margin (revenue less your variable costs: labor, subcontractors, materials, etc.) is the #1 indicator of how well your business is running. In the landscape construction industry for example, attaining a gross profit margin of around 36% is critical in achieving a profitable year.
In busy times, it’s easy to get away from regularly tracking your gross profit margins on the jobs you’re completing. Successful trades business owners track the gross profit of each job as soon as it is completed, and often part way through. These results are measured against goals and help make changes in day-to-day operations. For example, we may notice that a particular crew is always over-budget on their labor budget, and then investigate why that is happening with them. This way, changes can be made early-on to bring jobs back to that 36% gross profit and help bring in a profitable year.
Over the years, we’ve developed a simple yet highly effective system for tracking variable costs and gross profit margins on jobs. Our members use it to track their numbers weekly, and it’s helped raise profitability of dozens of trades businesses in our program. Best of all, it’s available free of charge, included with the downloads you can grab at the bottom of this page.
Mistake #3 – Prioritizing the wrong tasks in your week-to-week schedule
Here is one truth that I’ve seen proven countless times: what got you here probably will not get you there. The type of work that will take to grow your business to the next level is very different than the type of work that has gotten you to this point. I often see entrepreneurs spending less than 10% of their week working on tasks that truly make an impact on moving the business forward. Menial tasks such as getting materials for crews, dealing with customer complaints, getting vehicles fixed, etc. will not allow you to focus on the priorities that impact growth.
Working on tasks that influence long-term results requires methodical and intentional planning. Yet, I see very few business owners spending a focused two hours each week to review results, set goals for the week, and outline weekly action plans to achieve their goals. It is this disciplined “Goal Setting and Review” process which has been a staple in the rapid growth hundreds of companies we’ve worked with.
Entrepreneurs who are serious about profitably growing their trades businesses must follow this weekly ritual to spend a focused two hours at the beginning of each week mapping out goals and priorities, without distractions of the day-to-day. Our Breakthrough Academy members use a “GSR Dashboard” weekly to help them understand their results and set goals moving forward. This form, which has helped drive results for countless business owners, is also available to you to download below.
Danny is a managing partner at Breakthrough Academy – a program designed to guide entrepreneurs running trades and service companies to profitably grow their businesses.
Coming from a modest upbringing and numerous learning challenges with Dyslexia, Danny learned to work very hard from a young age. Through university, Danny started running a painting business that he quickly grew, eventually employing 12 full time staff. At 20 years old, he took a leadership position for a franchised painting company and grew sales from $400,000 to $1,300,000 in one year. After many years of rapidly scaling his painting business, Danny followed his passion in coaching entrepreneurs and has led hundreds of business owners to realize their potential.
The 2020 BTA Winter Summit was an epic three days, with over 200 of our members, partners, and special guests in attendance at the world’s greatest mountain resort – Whistler, BC.
Last week we came back from the most impactful event we ever hosted (and personally speaking, that I've ever attended), and I wanted to share our work with the whole BTA Community.
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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