Imagine building a house without a tape measure. You kinda guess at 92 5/8″. You eyeball the door and window framing to confirm it’s square and true. You drill the waste hole for the toilet “that far” off the wall. You just make the truss set “work out”.
You wouldn’t do that.
But that is exactly what you are doing with the finances of your business if you haven’t selected a set of financial reports about the performance of your business to follow rigorously and compare periodic results to know where your business stands.
This course will help you select and understand the foundational numbers that will disclose how your business is doing.
Just as the measuring tools you use on the jobsite assist in your building processes working better together, measuring and bench-marking the financial performance of your business can lead to a much more successful outcome.
Feel free to contact Dennis if you have additional questions. firstname.lastname@example.org.
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These nine numbers can help you manage your construction business better and more profitably. See where they come from and how you can use them.
A discussion of the three components of wealth-building and the language of business.
It would be nice to understand how the Nine Numbers work together to provide the financial picture of your business. Here’s how/
Your business is not going to survive without cash. Your business is not healthy without profit. You are not getting wealthy unless your net worth is increasing.
Reading the financial statements should be just like reading a book. What does your cash flow story tell you?
Is my business going to survive?
Do I have more cash coming in than going out?
The Cash Flow Statement provides those answers.
Demonstrate to the prospective client that you have a handle on this overwhelming task of building their new home, that you can manage both the financial and time constraints to deliver the product. This template and worksheet will help.
Of all the financial decision models I have studied, Break-Even Analysis is the most useful. Used correctly, it can tell you what you need to know about the financial decisions you must make as a business owner.
Just grit your teeth and get through this lesson. It provides the basis for the good stuff that follows.
The Second Commandment for running your Construction business says “You shall only play in a game worth winning”. How can you be sure your game is worth winning?
What if I spend $40,000 for a site manager who will help me reduce direct costs by 5%, at the same sales level as last year? How will that affect my profit?
What if I hire that site manager, get the 5% improvement in direct costs, can concentrate more time on sales, and sell one more house at $250,000 .
Get out your own numbers and ask them a question.