By Mark Richardson. In this industry, companies aren't designed; they evolve. As a result, more is different than the same when it comes to financial standards. Many owners are thrilled to make 5% net profit. Others are in trouble with 10%. The only real health of your business will come from your own formula, based on how you structure your company. The key is to know your numbers and understand them in relationship to your goals.
There are five key indicators to watch on a weekly and monthly basis:
1. Leads, projected vs. actual
2. Monthly gross sales, projected vs. actual
3. Gross profit percentage and gross profit dollars
4. Overhead, budget vs. actual
5. POC, or percentage of completion -- how much you produce during the year.
Net profit can be predicted if you're on target with those numbers.
As you become more sophisticated, you can take these and drill more deeply. However, until you get the five fundamentals down, I don't suggest it. Sales-driven owners, remember: You make your money on what you produce, not on what you sell. Spending time on the production team and systems will get the results you want. --Mark Richardson is president of Case Design/Remodeling, Bethesda, Md. (301) 229-4600; email@example.com.