Variety can be a good thing, but many remodeling companies and handyman services that want to measure their performance against normal standards must be on the same page. To help remodelers and other home improvement services align their bookkeeping practicing, were going Back to the Basics.
THE COST OF DOING BUSINESS
in addition to the materials, tools, work, subcontractors, and all other things necessary to carry out alterations and provide professional handyman services, you can not lose control of the expenditure that you must have in order to keep your business in operation. Costs for telephone, internet, rent, car insurance & maintenance and fuel, among a host of other costs that cannot be tied to a particular task or project.
together, these costs are “overhead”, and carefully following them ensures that you know exactly what your monthly nut is, and allows you to make sure that they are included in the sale price or rates for their services. Despite its overhead should be almost the same amount each month, it is important to understand how certain decisions —– buy a new table saw, move to a bigger office, hire an office manager, to the staff uniforms —– affect its overhead and, ultimately, your bottom line.
I would recommend to have a box of folders and an accordion file and begin to track your accounts by grouping expenses accounts under the primary headings. Then have a separate folder that has a sheet for each month, that tells you what your actual expenses for this month. I also suggest that you list your gross income, together with the final balance after all fixed costs and operating expenses have been deducted. This need not be anything fancy and can be made from a basis of accounting, the blocks with the notes, or an excel spreadsheet, if you prefer to use a computer. This will allow you to see what is coming in and what is going on. With only this basic sheet of important information to make serious decisions, such as which services are most profitable, and possibly some items or even employees that need to be removed or at least lowered for certain services and hours for employees. In the business world, you are forced to make difficult decisions that ultimately will determine the future of your business.
I believe that sales and marketing is a must to group all expenses related to the research and selling revenue producing work here. Include the cost of simple marketing materials, such as business cards and letterhead, as well as design, printing and distribution of expenditure direct mail piece. If it is an advertisement, brochure, commercial, or even a reference have a special code that represents the specific marketing avenue. Have a place on your contact form that you should have on your website asking your potential customer where they heard about your company and if if there was a special code with the ad. If they do not provide this information on your initial contact ask them where they saw your ad. This is VERY IMPORTANT because it allows you to see what marketing avenue is to provide the best return on your investment. I swear by this system and it is not only saved me thousands of dollars on wasted marketing, it showed me what was really bringing in the business. During this period I spent an average of $ 1000.00 each month on all types of advertising only to discover that over 95% of our business had come to GRACE the placement of ads on sites like Craigslist, and from Angie’s List, which is a non-bias consumer information companies that allows members to search for providers of services and not just the review of the classification, but read in detail that other clients had to say about the company. When taken together, these expenses will show you how marketing and sales relate to revenue, giving you a more accurate picture of what it actually costs to generate work and allow you to separate the weeds from the flowers.
Many small businesses often rely on word of mouth and for the most part spend anything on marketing. This strategy has disadvantages and will keep you where you are—— for a small business. It is indicated by the many professional marketing companies that you should spend at least 1 to 3% of gross revenue on marketing. I disagree, I believe that through trial and error that a small business should spend at least 10% to 15% of gross revenue on marketing. But to be in the marketing avenues that have proven to be productive in the past.
many of the small businesses think that as the business grows, this is when you really should invest in the big ads and commercials. However, many successful entrepreneurs will tell you that you are the most important time to invest the farm on marketing is when business is at its worst. Not only financially, but, but, physically and mentally. Go out and distribute flyers in your neighborhood or target area, make a work for a charity or church, where you will get your name out there and, probably, a special thank you to the charity website or the church’s monthly newsletter. Never forget press Releases, if written in the right way, you can get a half page of FREE advertising. Do a search on writing effective press Releases, the big companies do this all the time. Start a blog that you update regularly and deals with the services to be provided, and offer advice and tips that keep people coming back. The most important thing is that people will only believe in you if you believe in yourself and your products or services. To be sure, to explain to them what you have to offer will save you time or money to make your life easier, or increase the value of your home.
If you are a small business owner, you are more than likely like me, the underdog. The amazing thing is that most of us would not want it any other way, to show all the people who said that we were dreamers, that we would never do it, which we did, and we are pleased with where we are and where we are going. If there is any work on a day use this time tom beat the street handing out flyers, meet and talk with people and you may be surprised with how many calls you with the job.