If you want to make more money in your contracting business, you have a few ways to do it: you can do more marketing and get more leads, you can sell more products and services that you haven’t previously offered, you can raise your prices, and so on.
This list is probably already familiar to you. Chances are, they are at the top of your mind when you ask yourself how to make more money.
But there’s one way to make more money in your contracting business that is often overlooked by owners, and that is: gazing into a crystal ball.
Sounds strange, right? And maybe it even sounds a little far-fetched. But here’s what I mean…
If you’re reading this right now (at the height of summer busyness) you might be just trying to keep your head above water from all the calls coming in. You might be working overtime to juggle all the pieces and move your team around so they can help as many customers as possible.
In other words, you are focused on optimizing your team and your company today to serve today’s customers.
But if you really want to grow your business, you need to stop thinking about today. Instead, you need to think about tomorrow… and next week… and next month… and next quarter.
As the owner of the business, if you are thinking today about today then it’s actually too late. You needed to think about today a couple of months ago.
What I always say to business owners is: sure, it’s summer now… but fall is coming up. How are you planning for the fall?
Step 1. Measuring Trends
The first thing that needs to happen in your business is to measure trends. Yes, you already generally know that the summer will be busy and the fall will be slower… but do you know the exact weeks that happens? You already generally know the exact days of the week that are busier or slower… but do you know why or by how much? Yes, you already generally know the hours of the day that are busier or slower but do you know by the exact amount?
Most contracting business owners can probably say “Summers are busy; Mondays are insane, and we tend to get a lot of calls in the morning.” That is a general awareness.
Want to know what the more successful contracting business owner knows? He or she opens a spreadsheet of the number of phone calls and appointments every hour of every day of every week of every month, and they can say: “During the last 2 weeks of August we see our numbers decline by 20% each week. We have 10 calls an hour Monday morning and 2 calls an hour on average in each afternoon...” (and so on).
Those numbers give so much power because they allow you to apply your knowledge in a very specific way beyond just generally knowing when things are busy an when they are slow! It’s the difference between making decisions based on a feeling versus making decisions based on data.
Step 2. Forecasting For Profit
Forecasting is about using yesterday’s data, then comparing it to today’s data, to help you make decisions for tomorrow.
The problem is, if you’re focused more on feelings than data, and if you are busy dealing with the pressures and busyness of today, you can’t make great decisions for tomorrow. Unfortunately, most contracting business owners finish up the busy summer work and when fall comes around they are almost surprised by it. They knew it was coming but they weren’t prepared.
When you have data that measures the trends, you can pinpoint the exact weeks and days that things will happen. For example, with data, you know that your calls have historically dropped by a certain amount each day of the last two weeks of August so that by September things have slowed down.
This very accurate forecasting allows you to make decisions: can you schedule out non-emergency calls for those days? Can you let your team take vacations during the slowest times? Can you pre-sell services for the slowest days? Can you assign your team to other work during the slowest hours of the day?
Right now you are busy with summer, and maybe that is keeping you busy all day every day. However, if you want to grow your contracting business, you need to hand that day-to-day thinking about today to a director of operations or to your managers, and instead you need to review your trends and start forecasting so you can put the right team members and offers in place to maximize how much money your company is making.
Want to start down this better path of gazing into a crystal ball? It’s simple: open a spreadsheet and start writing down how many calls your team got today. If possible, collect that data from the past. And keep going every single day from now on. Then review that information daily and make decisions about the future. There is no crystal ball but this is the next best thing.
Mike Agugliaro is a "Business Warrior" on a mission to change the lives and businesses of service business owners. Mike and his business partner started and grew a struggling home service company into a multi-million dollar empire before selling the company in 2017. Today, Mike is an author, speaker, and mentor; and he's the co-founder of CEO Warrior, a high level coaching and training organization for home service businesses. Learn more about Mike and CEO Warrior at www.CEOWARRIOR.com.