It is critical to know the value of your contracting business.
Maybe it is time for you to retire and sell the business or even to transfer business ownership within the family.
Financial experts suggest that 90% of baby boomer owned businesses will be sold in the next 5 years (2024-2029).
Key factors in understanding your business value:
- Company assets
- Sales
- Net profit
- Strong Customer Relationships
- Growth trends
- Sales network
- Industry forecast
Key information you need to track:
- Revenue and revenue growth trends
- Profit margin and overall profitability
- Customer acquisition cost and customer lifetime value
Start with Estimating
The first step in setting yourself up for success is to do your estimates / proposals in a way to eliminate the SWAG and having some cost basis. If you are doing time and material estimating that is still OK because you have the base components of time and material separated to be able to budget the project and track your expenses.
Take care of your Assets
No, this doesn't mean locking up the truck at the end of the business day (although that is not a bad idea) this is about putting together programs to reward your top employees.
Budgeting time for a project and tracking your employee hours allows you to quickly know which employees are doing a great job and deserve to be part of the bonus program.
Taking care of your key assets is critical because it can be difficult to find excellent workers.
Tracking costs
Tracking costs or expenses is going to give you a real-time analysis of not only job progress but of your overall business success and later allow you to easily look at profitability growth.
The hours worked by your employees (which spins off the bonus program mentioned above) or by subs and the added expenses will give you that quick view.
Reporting Sales / Profit Trends
A key for your business value will be the sales and profitability trends.
Use the accountability reporting in Estimate Rocket to quickly see the yearly / monthly / quarterly trends.
Increase your Customer Lifetime Value and Decrease Acquisition cost with follow ups
Quickly check what the total value is on any given client in Estimate Rocket.
By using the follow up campaigns on a completed project to do your free touch ups or to simply reach out to existing clients to see if they have referrals or additional work that needs to be done will maximize the client total value.
Maximizing the Tracking of Key Information in Estimate Rocket
Other Interesting Education Articles
Using Project Hours Budgeting to Reward your Employees
Tracking Profitability and Sales in Estimate Rocket
Managing Scope of Work Changes in Estimate Rocket
Sensible Changes to your Profit Margin in Estimate Rocket
Managing Project Completed Free Follow Ups and Follow Up Campaigns
Avoiding Costly Job Rework Using Estimate Rocket Change Order Sign Offs