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Episode 83: Know Your Construction Numbers w/ Leslie Shiner

Spencer Powell | Apr 7, 2020 7:53:44 AM | Builder Funnel Radio

In this episode, Leslie Shiner of The Shiner Group consulting firm tells us which numbers contractors should really be looking at, as well as what percentage of your business costs should be gross margin, markup, overhead, and net profit.

Leslie also talks about how to approach the financial component of running your business both in the boom periods and in recessions.

Learn all about it here on Builder Funnel Radio.

 

  • 0:40 Episode overview
  • 2:08 Leslie's background in the industry
  • 3:51 Running business with numbers vs. "with your gut"
  • 5:12 How to know your books need extra help
  • 6:58 How to start using the numbers
  • 9:15 Finding the real gross profit margin
  • 10:31 Raising rates during boom periods
  • 13:17 How to price during down periods
  • 15:54 Finding and using your price point "sweet spot"
  • 19:03 Who in your company should know the numbers
  • 22:42 When is it time to grow?
  • 25:46 Markup vs. margin (they aren't the same thing)
  • 27:34 How to connect with Leslie
  • 28:36 Fast 5
  • 31:26 Spencer's takeaways

 

Resources

Builder-Funnel-Academy-Marketing-Platform-for-Contractors-Remodelers-Construction-Companies
 

 

Full Episode Transcription

Note: this podcast was transcribed automatically and may contain minor grammatical errors and missed words.

 

Spencer 0:08
Welcome to Builder Funnel Radio. Here you'll learn about how to grow your homebuilding remodeling or contracting business. If you're not growing, you're moving backwards. So we want you to always be in growth mode. This podcast is really turned into a movement and community of people who want to grow personally and professionally. Here we bring you some of the best marketing sales and business minds in the industry, so you can elevate your business.

Alright, let's dive into the show. Hey, welcome to builder funnel radio. This is Episode 83 with Leslie shiner, and this episode is all about the numbers. So we dig into markup versus margin. We talk about gross margin profitability by job and then we also talk about some benchmarks that will help you figure out if you're on track. So I think you'll get a ton out of this episode we do go a little bit deeper into the Numbers, I would say it's a notetaking episode. So if you're on the road, you'll still get some value. But you may want to go back and re listen to some sections and jot down some notes. So stay tuned and enjoy this episode with Leslie shiner. Hey guys, just a quick comment before we get into today's episode, this episode was recorded prior to everything going on with the corona virus. So there are some comments that both Leslie and I make that comment on the economy being super good and super strong. Obviously, that's not the case. But this episode is still really important in terms of the content that we deliver. So obviously, keep that in mind as you're listening. We know that things are not so good and everything so great right now, but take the content for what it's worth. And I think you'll still get a ton out of today's episode. So just wanted to let you guys know that this was pre recorded and that we're still trying to produce timely information, but this information nation is still extremely relevant and extremely good. So with that being said, let's dive into today's episode. Hey, Leslie, glad to have you on the show today.

Leslie 2:12
Hey, thanks for having me. I appreciate it.

Spencer 2:14
Yeah, I'm excited for the conversation. And and as always, I think it's helpful for our guests to kind of get to know you a little bit. And so how did you first get into the the construction world?

Leslie 2:25
Well, I always say that I started out, specializing in construction and nonprofits, unfortunately, very similar. And then there were a bunch of tax laws that changed. And I thought I'm not going to deal with the nonprofit's anymore. And I just really enjoy working in the construction arena and talking to contractors and really understanding them and spend a lot of fun.

Spencer 2:47
Gotcha. Very cool. And so yeah, I guess, what are you doing now? I guess, currently, like how do you serve the industry and that sort of thing.

Leslie 2:57
So I do a lot of things right now. It's January. So I'm really busy helping my contractors close out their books and all the fun stuff that comes with that. But typically what my goal is, is to work with contractors help them better understand their numbers, have them run the books by the numbers and the company by the numbers instead of by the gut, and really trying to understand profitability. I will work with bookkeepers to make sure that they are doing it correctly. So they're getting the information and then really helping the contractors understand the information. What should they be asking? What should they be looking at? What tells them the right stuff? And what's going to tell them ahead of time, you know, too many times. Small business owners look at financials too late. And so I want to have them look at it earlier and help me understand better, you know, what is it that they're really trying to look at?

Spencer 3:51
Yeah, that's awesome. And you mentioned something interesting there. He said, you help people run their businesses by the numbers, not their guts in your experience. How much of the industry or what percentage of people that you bumped into are actually currently, you know, running them by their guts, you know, making those types of decisions?

Leslie 4:10
Well, you know, it's it depends on what size company it is, you know, when you've got the small companies with one or two people on the crew that the thing that used that used to amaze me, I'm never amazed at it anymore is that if I'll talk to a contractor, and I'll say, who doesn't have any really good books, and I'll say, how much you think you spent on this job, and I'll go, I don't know I'm about 45 grand, then you work with a bookkeeper and you do all the work and you find out it's about 44 or five or something very close. So contractors really do have the numbers in their head. The problem is that when they grow when they're doing multiple jobs, or the other problem is that they have those numbers in their head for about the first three quarters of the job. I always say, imagine how profitable contractors would be if you never had to finish a job. We only had to do the 30% Yeah, that's really you No trying to understand that so I'm not saying the guts wrong. I'm just saying that you need to make sure you're managing it both ways by the gut and making sure that the numbers are telling are verifying that gut feeling.

Spencer 5:12
Yeah, yeah. So if somebody's listening to this, and they're going, Okay, maybe I'm, they know, they're making some decisions by their gut or they have some books in place, but they're, you know, maybe need some help, or maybe they're just not sure how do you know, if your books are in in the type of shape where they do need some help? Or, or if you're doing okay, right.

Leslie 5:37
And that's a hard one, but the the question, you know, there's a lot of times in

accounting and the books are not really the bailiwick of a contractor. Sure, they're very you know, I don't mind contractors delegating all the bookkeeping to a bookkeeper, but you can't abdicate away financial responsibility. So either you're talking to your CPA long before your tax Or do or you're at least having a meeting on a regular basis. You know, one of the things I do for companies is my one of the services I offer is something called a fractional CFO. You know, a small business can't afford to have a full time CFO than half the time, they can't even afford a full time bookkeeper. So instead, what I like to do is come in for a couple of hours a month, take a look at the books, make sure they're in good shape, and then say, Okay, now what are we going to use this for? Is your pricing? Correct? Do you want to hire another project manager? What would it take? How much in your sales? Do you How much more do you have to sell before you want to hire another project manager? What's your budgeting? What? How? Where are you? Where's your what's the cause of your slippage? Is it materials is it sub? Is it labor? Where are you getting the numbers from and really trying to then use that if a contractor is not looking at the books and thinking that the books are only because I got to send them to Uncle Sam in April, then that's really not what they're for.

Spencer 6:58
That makes sense. Yeah, and So somebody's looking at you rattled off a bunch of numbers there, you know is is there a good place to start? You know, you know, if you first go in and start looking at some books, you kind of know, okay, these are some common problem areas where we need to dig into

Leslie 7:15
Oh, absolutely. So first of all, I have to say, I'm not a CPA, I have an MBA in accounting and finance. So I don't give out CPA advice, and I'm pretending to be a CPA. But one of the things that I find, and again, it depends on what software you use. Most contractors are many of them use QuickBooks. QuickBooks by default does a lot of things wrong. And QuickBooks, you know, the best thing about QuickBooks is you can change anything at any time and do whatever you want. And the worst thing about QuickBooks is the fact you can change anything at any time. So what I want contractors to be able to do is take a look at their financials and clearly look at two types of costs. Cost of Goods Sold everything related to a job. Those are called above the line costs. And then overhead. And can you get a p&l or a profit and loss statement by job? Can you get the information that you need on a job by job basis? For example, when it comes to QuickBooks I find because of the way it's set up, all the labor is in overhead. And then boy, these jobs are really profitable. Because all you have is you have in common and you have some materials and subs and you make all this money, and they don't have their labor set up correctly. So when I'm looking at it, I'm saying can you print this report and get a good what's called gross margin number? Can you see your total costs and can you figure out your gross profit? Gross Profit is your total revenue minus all the costs for just the jobs or just the job? Can you figure out a gross profit number? I always say it's called gross profit because it's grossly understated or overstated. It's too low for everybody anyway, but surely You get that information. So can you use a profit and loss statement that said, Hey, you know what, I sold a job at this either markup or margin. I want to make 35% on my jobs, and then I run a report and will it tell me if I did it or not?

Spencer 9:15
Yeah, yeah, I think that's good advice. And in terms of a gross profit percentage, is there something is there a range that you're kind of looking for, like, Hey, this is a healthy range. A this is a dangerous range to be. And I know it varies based on size of company and types of jobs. You do. But are there some kind of benchmark numbers that people should be looking for?

Leslie 9:35
There are you have to be a little bit careful, because, you know, I did a benchmarking study once for a trade association. And this guy turned it in and his margin was 80%.

Spencer 9:45
Wow.

Leslie 9:46
Yeah, that's great, except for the fact that all of his labor wasn't included in it, right. Yeah. So you know, you and you have to decide But typically, and in particularly the remodeling industry, the standard is gross margin is about 35%. Okay, and so the goal is, and by the way, that means you're running it at about a 50% markup, but gross margin is about 35% overheads 25%. The goal would be to have a 10% net profit.

Spencer 10:14
Gotcha. Okay. And do you feel like for a lot of people that 10% net profit is pretty achievable if you're running, you know, running everything the way you should be?

Leslie 10:26
Well, achievable. Yes. Do a lot of companies do it? Not always. And it depends, you know, right now it's a it's it's so cyclical. And because I've been doing this a long time, it's fun to watch. So many remodelers and so many builders are so busy. If you're busy and people are spending money, raise your rates. I always ask at conferences I speak at and then I asked my clients this I say would you like to earn temper who wants to earn 10% more money? And hey, everybody says Yes. Would you like to earn 10% more money because you have to work 10% harder And I don't know a lot of people who have a lot of 10 percents in their life to be able to do that. How about if I could make 10% more money without having to work 10% harder. And the one way to do it is better manage your jobs by the numbers and raise your prices. And if you don't get a job, then you open yourself up to get other jobs at a higher rate. Now, if it was back in, some people don't remember what life was like in 2008 2010, which is 10 years ago. I union. I didn't say that. Because there there wasn't hardly any work out there. Sure price became a factor. But when there's a lot of work out there, first thing you have to do raise your rates. It's the law of supply and demand.

Spencer 11:44
Yeah, yeah. I think that's great advice. And you're right. I mean, right now that this is the best time to do it. It's the easiest time to do it. Because you know that there's enough demand. If you have to turn some work away because they didn't like your high prices, then there's still more coming in the pipeline. And it can be scary to raise your prices. So this is a time to practice, right?

Leslie 12:04
Yeah, absolutely. So when you're busy, that's Yeah, if you're struggling for work and you've got a crew, you want to keep busy, that's a different situation. But for most, and again, it's different in different parts of the country in different countries as well. But, you know, if, if your crew is busy, and you're not struggling to try and keep them busy, then be a little bit more selective. And if somebody doesn't like your price, they don't appreciate you what I find happen, which is interesting. Several of my clients are probably, whenever I mentioned them in passing, oh, they are the most expensive than the, in our county. And you know, want to know what they are the most expensive, they get the best jobs, they work with really good people, and they make a lot of money. Yeah, whereas the other ones who are home you know, and when you're, when you're going for the bottom of the barrel, then you're going to get bottom of the barrel clients and it's not going to work.

Spencer 12:58
Yeah, yeah, I know. There's only one low cost provider and it's just Yeah, it's a race to the bottom. So if you're right at the very bottom, then you're just low, but you're not the lowest right?

Leslie 13:11
Yeah, you'll, you'll never be able to compete on price. There's always gonna be somebody out there. That's cheaper.

Spencer 13:16
Yeah, absolutely. So let's talk about kind of the flip side, you mentioned, now's a great time to raise rates. And obviously, people are kind of anticipating some sort of, you know, shift, whether that's six months or three years, you know, nobody has a crystal ball, but we will hit, you know, a time where we don't just keep going up and up and up. And so when things are either more stable, or they're tougher, I know it gets really tempting to just take on any job just because it's a great revenue, I need revenue. But I know you and I were talking before this that, you know, that's obviously not always the case. So what are maybe some things to look out for when you're in those times where you are looking for revenue and you maybe have to, you know, get a little more competitive on price. But should you just take on anything? Or you know, how do you you tell? I don't know. Yeah, it's some things that could make things worse actually by taking on unprofitable job, right?

Leslie 14:09
Well, if you think about it, and you run the numbers, if you lower your price, and you have the same amount of overhead, you have to do more work. So a lot of companies would lower their price and do the same amount of work and all that does is make you lose money. So the first thing to do is make sure sort of your right sizing your company. Do you can you cut overhead is your overhead bloated. You never want to spend a lot of money keeping your crews busy on non productive and non revenue generating activities. There are too many companies back in 2010, who continued to keep their and I understand you have a good crew. You don't want to let them go. But you continue to pay them to do your house or your mother in law's house or something like that. And all All you're doing is basically paying them out of your pocket. And think about it. If you when they come for their paycheck, do you can you pull that out of your own pocket? So the first thing if if things become tight, you want to make sure that your pricing is still enough to cover your overhead because too many companies lowered the price. Got the jobs, but didn't make any profit became a non profit. My tried to stay away from

Spencer 15:27
Yeah, yeah, that makes sense. So basically, what you're saying is, Hey, if you're gonna drop your price, you either need to have enough volume of work enough of those jobs that it still covers your overhead or you you can only drop it so far that you're still covering that overhead

Leslie 15:44
or you or you have to find a way to reduce your overhead.

Spencer 15:47
Sure. And you gave like a it was 25% is like a rough one to 5%.

Leslie 15:52
Right, right. And, you know, the other thing that's really important is to and I don't do a lot of consulting on marketing, but To understand your sweet spot, and to not, you know, when when 2008 hit, I had a client who did $750,000 Jobs was his average job well, those jobs don't you don't start them and build them and get the job and you know, meet him. And then a month later started, and the lead time was so long in that he was basically going to go bankrupt. And so he created a handyman division or he create, you know, he actually created a functional living, aging in place division for the much smaller jobs so that he could keep his crew busy. So that's what's important is decide some companies do really well with the 25 to $50,000 Kitchen bath only other companies lose their shirt on $50,000 jobs and have to do $500,000 or more. So that's where the numbers become so important. Figure out how you best run your company. Where do you run jobs and where do you get the most profit? What's your sweet spot and what should you be going after and that would be you know, really important. to focus your marketing on that, I had a guy who was, you know, just a small kitchen and bath kind of guy and somebody wanted him to build a whole house and he jumped at the chance because the numbers seem great, but he didn't know how to do a custom home. He only knew how to do Kitchens and Baths and he ended up almost going bankrupt. Even though I told him not to take that job but anyway, he Yeah, so know your strengths and weaknesses. And then the other thing that's really important is to manage your jobs. This is where numbers come in handy is start tracking and trying to fight slippage. You know, that's really the killer of any sort of construction company is you sell the job is do you not close them fast enough? Are jobs really profitable up till about 80% then you just can't finish it you keep going back? Or are you under estimating your labor? You know, slippage rarely occurs with subcontractors and materials, but it's almost always labor. So how are you managing your labor force and are you giving them the extra dictation that says this job should take 180 hours and showing them along the way how close they are to that.

Spencer 18:14
Hey guys, this is just a reminder that builder funnel Academy is open for enrollment. We're closing the doors on April 15. Or when we hit 100 members, whichever one happens first. Now the program is about 10 years in the making. We're sharing digital marketing lessons learn the exact formulas and campaigns that are working today right now, and will continue to update you as Google and SEO changes as the social media landscape evolves. And as we discover new campaigns that are driving success for other companies like builder funnel Academy, it's all about sustainable growth and building beautiful marketing and sales. If you want to learn more, hit pause right now and go to builder funnel academy.com slash join I was just gonna ask you kind of, you know, we've been talking a lot about numbers and who should know the numbers within the company and obviously the owner, but you just mentioned, you know, kind of communicating to the team, hey, we've got this many hours for this job, you know, I guess what are some of the other key roles that should know? You know, these types of numbers as you're, you know, moving moving things, right. So,

Leslie 19:26
you know, a lot of times people I hear owner say, I don't want to tell them, it's a, you know that this has 180 hours, because then they'll just waste their time piddling away. And I thought, that's great if you always come in under budget on hours, sure. But if your employees don't know the expectation of how long something should take, and how long you budgeted for and especially if it's a fixed price job, then they don't know that they're causing you to lose money on the job. So that's why a lot of times, it's important for field employees not to necessarily give them dollars, but they can understand hours. On the other hand, project managers really do need to know, what's the budget, and how much have we spent so far, and really important to work with project managers have helped them understand that they, they may see how much the job is sold for. And they might see how much it costs. And for them to be taught that the difference between what your what it costs and what it sold for is not just profit that goes in the owners pocket that that money has to use to cover overhead and other sorts of expenses. So to help them understand that but to really get them to take a look at the budget. I had one company I went into the site visit for they were not doing well. And I met with the head project manager and I said okay, so what kind of reports do you need? What kind of budget do you look at? What are you looking at and he leaned way back on his chair and he said, you know, lady, I thought it was interesting. He called me lady, but he goes lady, you know, I don't know if you know this, but the job cost what it costs. Oh, okay. Interesting. So he was fired. And you know, that was his attitude is the job cost what it costs? Well, that would be fine. If the client gave it was 10. And the client didn't care about how much it cost.

Spencer 21:12
Yeah, so bump into that too often.

Leslie 21:14
Yeah, not those kind of clients, but you bump into those kind of project managers are short a lot. So that's really why it's so important to work with whoever's managing the job is to help them understand this is what we sold it for. And just because the job is TNM, doesn't mean it's an open checkbook. And if a job is fixed price, making sure that you understand how much it's supposed to do and also managing to the scope of work. So when things change, I don't care if you're going to charge for it or not charge for it. It has to get documented. I think that's where slippage occurs, and that's where a lot of contractors lose money, is they don't charge enough for change orders. Um, I always say you know, you're going to probably do the extra work anyway, you might as well get paid for it. Right. And the focus I have for the last year or so is to try and get contractors to understand that each change order has to have a minimum of two hours of project management added to it or documentation added to it. That when the client comes to you and says, You know what, I want to do this tile instead of that tile, it's not as simple as just picking up the phone and calling somebody there's project management time to redo the order to reprice it or any of that. And clients need to understand that when they change their mind if it's particularly if it's a change mind kind of change order, that that is that that has a cost to it. It's not free to just go in and swap out a tile, especially after you've ordered the original tile.

Spencer 22:41
Yeah, yeah, I think those are really good points. And, and the next thing I want to transition to is talking a little bit about growth because right now, a lot of companies are growing like you said earlier, it's really strong economy. Everyone's typically, you know, typically busy. So my question is, you know, growth By its very definition is uncomfortable, you know, you're entering new territory you've got, you're pushing the envelope, you know, and so how can we use some of the numbers to make growth either a little bit easier or just give us some more information to know, when is it time to grow? You know, time to grow? When is it time to add staff or overhead, like you said, and, you know, are there some things that we can look at that are good indicators to say? Yeah, I think we're ready for that next tire or whatever it may be.

Leslie 23:31
Yeah, you know, the the industry is littered with a lot of contractors who did that failed and then said, I'm never doing that again. I had a guy and I love him and he has up to five employees and did really well and then all of a sudden, like the economy took off December while ago and he had 15 employees and he lost his shirt. So what you want to do is if you are in a time of growth, that's where the numbers become so important. Is your when you're growing You want to track the margins on the jobs. Sometimes when you grow, now all of a sudden, you're managing to many slippage is occurring, you're not paying attention, or you're already running to the next three jobs, you haven't finished the other one. So make sure that the job stay profitable, growing and doing twice as much volume with half the profit isn't going to help anybody. So if you're growing, looking at that opportunity to really track the numbers behind that and say, okay, is it worth doing more work? Is that going to just add money to the bottom line? Or that's where you can do mathematical breakevens and other fun fun things. I like them to analyze the numbers, but really to make sure that as the growth occurs at a growth, it occurs profitably.

Spencer 24:46
Yeah, I think that's great advice, because I think kind of what you're hinting at too, is that in a lot of cases, if you just kept your current level, but you worked on profitability and bringing on the right types of jobs and making sure the jobs were really profitable, you could Probably double your profitability or increased by 50% by doing the same number of jobs or same amount of work and not having to go through that brain damage.

Leslie 25:09
Right. And and I know that that I shot years and years ago, one of the first conferences I went to that a guy was teaching a class called grow or die. And I thought that's just absolutely wrong. I would rather that you do the same amount of work you're doing now and make more money at it. That growth is certainly one way to improve your profit to make more money. But there may be other ways if your company has a lot of slippage and you're suffering from jobs being not profitable. Growth is the last thing you want to be doing.

Spencer 25:38
Yeah, yeah. It'll just accelerate the negative things that are

Leslie 25:42
happening. Yes,

Spencer 25:44
absolutely. For sure. Well, is there anything else that kind of sticks out to you as you meet with clients on a regular basis or talk to people at conferences where you feel like you see some kind of major errors or just common challenges that people should be aware of? They're thinking about the numbers, their books, and you know, some of the things we've been talking about.

Leslie 26:05
Well, I just got an email yesterday from someone saying, Can you just tell me the difference between markup and margin? And I said, Well, I can't if we had about a half an hour, I'd like to show you and walk through the numbers. What the problem I see a lot is that markup is how people price things, I want to sell something, I'm going to add 30% or 50%, or whatever that number is. But when you're looking at your financials, that gives you something called margin, which is a different number. So I think it's really important for contractors to understand when they're looking at their financials, that those are margin numbers, meaning a percent of revenue. And that's different than markup, which is a percent of cost is and I know it's real confusing. I play around with Excel to try and you know, what if we did this, and what if we do that to really try and understand that but those numbers get used in changeably are those terms get used interchangeably? And they're absolutely not. So I think it's just really important to think that if I'm going to mark up my jobs 25% when I look at my financial statement, I'm going to have about a 17% margin, which is not enough to cover my overhead.

Spencer 27:17
Yeah, that's a big difference. And yeah, to your point, if you think that your your markup is where you're ending up for margin, and then then suddenly you go from thinking you're profitable to suddenly losing money pretty quickly. So yeah, that's, that's great advice and lovely. I've got one kind of last segment of our show. But before we get to that, how can people connect with you if they want to learn more about you or anything like that?

Leslie 27:45
Well, you certainly reach out to me on my website, which is www dot shiner. group.com that's sh er shiner group Comm. I'm also at Leslie shiner on Twitter. I'm Leslie Shriner. Facebook Book Leslie shiner LinkedIn so luckily I guess there aren't a lot of Leslie shiners there I got them really quickly so don't have them do hashtags or underscores or any weird stuff or numbers so yeah, you can certainly reach out to me through my website and there's a contact page there or take a look at any uh, many of the conferences I do have my my speaking spit schedule I haven't updated that lately but you know, had come approached me at a conference and I'd love to chat.

Spencer 28:29
Very cool. Very cool. Yeah. And I know you've got a book as well which we'll link up in the show notes and yeah, so let's let's do our last segment here we call it the Fast Five so I'm gonna hit you with kind of five rapid fire questions and yeah, just say whatever comes to mind so we'll dive right in what is your favorite business book and why?

Leslie 28:50
What is my favorite business book and why I supposed to be fast. Hi, well, I would say mine which is a simple guide to turning a profit as a contractor but it's not a business book.

You know, the E myth is a good standard.

That's a good it's held up more than some of the other business books that track companies that are no longer in business.

Spencer 29:11
Yeah, yeah, it really has. Yeah, that's a great one

Leslie 29:15
and the E myth for contractors in particular.

Spencer 29:18
Oh, okay. Well, I actually didn't know they had one that was easy to fix. So that's fantastic. Cool. We'll make sure to link that one up as well. Next question is Who is the most inspirational person in your life?

Leslie 29:29
Wow. You know, it's funny, I would have to say my father. And he taught me a lot. And it's interesting. I talked to my mom, my sister, and quite often we have business questions. We start with what would dad do? So I would absolutely say my father.

Spencer 29:44
That's awesome. That's awesome. All right. Next question is if you could have one superpower, what would that be?

Leslie 29:52
Oh, really? So funny. I would absolutely not want to hear people's thoughts.

So I think flying would be really fun.

Spencer 30:04
Why? Yeah, finds a good one. All right, describe yourself in three words.

Leslie 30:11
Wow.

energetic. Does he make these hard? You should ask me. Three words. That wouldn't be any fun. And it wouldn't be any fun. Let's see three words. I would say energetic, I would say. thoughtful and

fun.

Spencer 30:34
Awesome. I like it. Alright, last question is if you could leave our listeners with one piece of advice. What would that be?

Leslie 30:42
I would say delegate but don't abdicate financial responsibility.

Spencer 30:47
Like, that's great advice. Yeah, you need to know what's going on. Well, Leslie, I really appreciate you spending some time with me today. I think this is a really important topic. I think it's one that on the whole I think a lot of the industry they didn't grow up in the numbers and so it's it's new territory or it isn't the default mode, but it's super critical if you want to continue to do the work

Leslie 31:10
and it's it is it is part of the email. Basically the skills that got you where you are today. Aren't the skills you need for the building your business in the future.

Spencer 31:19
Yeah, absolutely. So thank you again for joining me today. This was great.

Leslie 31:23
Well, great, Spencer, thanks for giving me the opportunity. It's been fun.

Spencer 31:28
Hey, guys, I hope you enjoyed that episode with Leslie shiner. Again, we dove way into the numbers and I want to pull out some takeaways for you. I know you're on the go. I know I said this is a notetaking episode. So hopefully you jotted down some things but I pulled out a few takeaways. And the first one was looking at some of those benchmark numbers that Leslie talked about. So what's your overhead as a percentage of revenue and she threw out the number of 25% net profit as a goal of 10% and then looking at your gross profit ability and what that is on the whole. And on a per job basis, I think going into your books and looking at those numbers and seeing where you're at is going to be a really helpful step in figuring out if you're on track. And then we had an interesting discussion around growth where we talked about, you could potentially be doubling your revenue, but you might actually be making half the money. So you end up doing a ton of extra work for less money on to the bottom line. And I know we talk a lot about growth here at builder funnel. And I think it's an interesting discussion to have with yourself or if you have other owners is, if you're trying to grow, why are you trying to grow and growing can be growing revenue, but it can just be growing and working on growing profitability. And so maybe you like the revenue level you're at. And so you're just working on growing profit. And that becomes a game of optimization and making sure you're bringing on the right types of clients. And so, takeaway number two is really in my mind, think about why you want to grow and how you Do you want to grow so there's growing revenue but then there's also growing profit, which is the most important. So think about that and then you can start taking some actions to work towards those goals. So, thanks again for listening guys. I hope you got a ton out of this episode and we will see you next time on builder funnel radio.

Thanks again for listening everybody. And as a quick reminder, text Radio 233777 for some free goodies as a thank you for listening to the show. And if you got some value from today's episode, I just ask that you leave us a quick review on iTunes. It really helps us spread the word and grow this awesome community of people who are working to improve their lives and their business. Thanks again and we'll see you next time on builder funnel radio.
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