| 9 Necessary Numbers You Need To Know! |
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| Written by George Hedley | |
| Friday, 06 July 2007 | |
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6. Know your contract numbers. Top construction business owners know their contract numbers. These include closed jobs and current jobs in progress. They review how well they did on past jobs and how well they're doing on current jobs. You should have a monthly report of all your completed and current projects,see the example below:
Completed Contracts Report Job Name ABC Project Start Date June 1 Project Manager Dave Superintendent Bill Foreman Sam Contract Amount $1,000,000 Bid Gross Profit Markup $ 200,000 Actual Gross Profit $ 150,000
Current Projects (Work in Progress) Report Job Name XYZ Project Contract Amount $2,000,000 Bid Gross Profit $ 300,000 Estimated Final Cost $1,650,000 Estimated Final Gross Profit $ 350,000 Variance $ 50,000
Costs to Date $ 825,000 Percent Complete 50 % Profit to Date $ 175,000 Amount Earned to Date $1,000,000 Amount Billed $ 900,000 Estimate Cost to Complete $ 825,000 Contract Balance $1,100,000
7. Know your receivable numbers. You can't make any money unless you collect what you're owed. Doing work is fun, but putting money in the bank is even more fun. I know it isn't your favorite job to call deadbeat customers and ask for money. Stay focused on collecting what's owed by getting an updated weekly account receivable aging report every Monday to review.
Weekly Account Receivable Aging Report Accounts Total Due 30 Days 60 Days Retention Project #1 $ 70,000 $35,000 $15,000 Project #2 $ 45,000 $50,000 $25,000 Project #3 $ 65,000 $55,000 Total Due $180,000 $85,000 $0 $95,000
8. Know your liability numbers. To keep your eye on the ball, you've got to know what your liabilities and debt include. Create a report listing out all of your debts, liabilities and large balloon or one-time payments due in the near future. Liability and Debt Report Amount Payments Terms Due Date Line of Credit Line of Credit Drawn Other Credit Loans: Equipment Loans
Future Tax Payments
9. Know your cash numbers! Cash is king and the life blood of your business. You need to know what you've got to work with to make good decisions. Get a report of your cash position every week and include the following items: Weekly Cash Report Bank Deposits Cash In Bank - Checking - Payroll Account - Savings Weekly Payroll Cost Weekly Equipment Cost Weekly Overhead Cost Investments - Liquid - Long Term
Know Your Nine Numbers! Doing great work doesn't really matter unless you make it your priority to always make a profit. Don't delegate or ignore the most important part of your business. Follow these nine necessary numbers, and stay on track toward becoming one of the top contractors in your market. Every week take at least one hour to review these financial figures with your key management team and accounting manager. This small investment of time will give you a much better return than going out to the jobsite one more time to remind your foreman what to do.
George Hedley owns Hedley Construction and Hardhat Presentations. He is the author of The Business Success Blueprint Series available in eight workbook and audio CD sets. He is available to speak on his proven system to build profits, people, customers and wealth. Construction company owners are invited to attend his two-day "Profit-Builder Circle" boot camp held regularly. E-mail to receive a free copy of his book entitled Everything Contractors Know about Making a Profit, signup for his free management e-newsletter, visit his online bookstore or receive more information. Call 800.851.8553, visit his website at http://www.hardhatpresentations.com/ Comments (0)
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