The Profit Creed: A Guide to Profitability for Contractors
As a painting contractor, there's a unique fulfillment that comes with seeing your completed projects — a beautifully transformed home, a pleased client, and the satisfaction of a job well done. Yet, too often, contractors find themselves tangled up in the tedious task of bidding for projects, leaving them with less time for the actual painting, which they genuinely love. This situation not only affects their work-life balance but also undermines the intrinsic value of their skills and their overall profitability.
In this extensive guide, we'll delve into what we call "The Profit Creed." These four principles revolve around understanding your worth as a contractor, increasing profitability, and providing a structured way to view and handle your business finances. As a painting contractor myself, I aim to share these foundational principles that will help you master the art of maximizing your profit and the efficiency of your business.
1. Profit is a Decision
Making a profit in your painting business starts with a decision. You have to commit to not just working but making money out of it. If you're not earning as much as you should, if your debt keeps piling up, or if you can't seem to hire and retain a good team, it might be because you haven't made a conscious decision to prioritize profit.
The decision to make a profit is similar to any other significant decisions we make in life. Just as you would commit to quitting smoking or losing weight, you must make the conscious decision to turn your business around financially. It's about "burning the boats," which means, you're deciding to become profitable, even if it takes everything you've got.
This decision revolves around the perception of your worth and the value of your time. As painting contractors, many of us tend to downplay the amount of time we spend on each project, seeing it as a necessary evil. Yet, this is not sustainable for the long term. By acknowledging that profit is a decision, you can take the first step towards changing this mindset.
2. Profit is a Plan
Once you've made the decision to prioritize profit, the next step is to develop a strategic plan. Profit is not a matter of chance; it's the result of careful planning. The plan should outline how you will handle every lead that comes into your business, track sales, plan your sales process, and streamline production.
A well-crafted plan involves several processes, including a sales process, a lead generation process, and a production process. Each of these processes must be defined clearly to ensure smooth operation. For instance, when a lead comes in, there should be a system in place to track it, nurture it, and convert it into a sale. This planning will help ensure that your sales process is not only effective but also efficient.
In the production phase, detailed planning is even more critical. It's easy to quote a price based on gut feelings or market rates. However, this approach can lead to underestimation of costs, resulting in less profit. A more systematic approach would involve assigning man-hours to each task on a job, tracking job costing, and comparing the planned hours against the actual hours spent.
If you're not planning each phase of your business meticulously, making a consistent profit will be a struggle. Profit doesn't just happen; it's a calculated outcome of proper planning.
3. Profit Never Follows a Victim Mentality
One of the major roadblocks to profitability is maintaining a victim mentality. If you're continually blaming external factors for your lack of profitability — the economy, state regulations, competition, or even the customers — then you're adopting a victim mentality. This mindset is not only detrimental to your business's financial health but also hinders your growth as a business owner.
A successful painting contractor will always find a way to make things work, regardless of the circumstances. They acknowledge the facts, take responsibility for their actions, and seek solutions rather than blaming others or circumstances. If you're not performing well, consider seeking sales training, finding a mentor, or joining a mastermind group. Turn the victim mentality into a winner's mindset, and you'll start to see changes not only in your profitability but also in your overall business performance.
4. Profit Follows Clarity and Discipline
The final principle in our Profit Creed is that profit follows clarity and discipline. What do you want to achieve as the owner of your painting business? This question might seem simple, but many business owners struggle to answer it.
Clarity is crucial in achieving profitability. Being clear about what you want can significantly affect how you run your business. For instance, do you want to work only three days a week? Do you want to pay yourself a certain salary? Do you want to specialize in a specific type of project or work with a particular type of client? When you're clear about what you want, achieving your goals becomes more attainable.
Once you're clear about what you want, discipline comes into play. Discipline involves doing the tasks required to meet your business goals consistently. For instance, if you want to achieve a certain revenue goal, what steps will you take each day to reach it? It could be as simple as making a certain number of sales calls per day, investing in marketing, or even improving your skills. Discipline is the bridge between your goals and the results.
Conclusion
In conclusion, profitability in your painting contracting business doesn't happen by accident. It's a choice, a result of planning, and an outcome of overcoming the victim mentality. Most importantly, it follows the path of clarity and discipline. By implementing these four principles of The Profit Creed, you can increase your profitability, build a better team, and create a business that aligns with your life goals.