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Tips for Turning your Business Around After Hard Times
75 Plays2 months ago
Feeling stuck in your business? Every contractor faces tough seasons, but the key to success is how you navigate these tough seasons. In this episode of The Better Contractor, Brent Oberlink talks about actionable strategies to turn your business around. With years of his experience, he discusses cash flow management, pricing, team building, and cutting waste. If you’re ready to stop struggling and start thriving, this episode is for you.
As an added bonus, join our new private Facebook group, The Better Contractor, for exclusive insights and real-world advice from industry experts on the daily.
#TheBetterContractor #ContractorSuccess #BusinessTurnaround #ContractorTips #BlueCollarBusiness #CashFlowMatters #Profitability #BuildToLast #LevelUp #GrowYourBusiness #Entrepreneurship #BusinessGrowth #BusinessMotivation
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Transcript
Introduction to Turnaround Tips
00:00:13
Speaker
fro Welcome back to another edition of The Better Contractor. Today we're going to do another fire episode where we go through and just try to find some tips and some nuggets of wisdom to help you on a specific topic. So today we're going to talk about turning your contracting company around.
00:00:29
Speaker
Myself and others have likely been in those shoes at some point. Business is tough. If you've been in business for any time at all, most likely you have had some down years, you've had some difficult decisions to make, you've had some just lean times, whether that be from the economy, something in your industry that's caused some changes, whatever it is, you've likely had a season in your business where you've had to come through and say, hey, I
Identifying and Addressing Business Problems
00:00:52
Speaker
got to make some changes. So these seven tips can help you turn your business around when you're facing those difficulties.
00:00:58
Speaker
Number one, identify the problems that put together a plan, revise your business plan. A lot of people don't even do this. They don't actually go through and say, Hey, these are my four main problems that have caused the situation we are currently in. And then sit down and actually sit down here management team and go through and say, Hey, problem one, we can address it with this problem two here and go through and do that. And then reevaluate that with that needs to be weekly. If that needs to be every other week.
00:01:25
Speaker
Put that on your calendar where it pops up every single day where you can go through and say, hey, I need to do this today. Make you a list for tomorrow the of action items. Maybe put two or three things on it every day that these things must get done tomorrow or my day is not a win. So, you know, speaking of that, my email at the very bottom says win the day. That's what I'm referring to is have three or four action items that no matter what happens that day, that if you accomplish those four things, you've technically moved the ball forward.
00:01:54
Speaker
You're going to have to do that during this season.
Financial Management Essentials
00:01:56
Speaker
Number two, know every number. Cash flow is a big one here, guys. You guys got to know your cash flow. um At work, we've got spreadsheets. We go through and we forecast cash flow for as far out as we can. Because we want to know, hey, is there a lean season coming up? Hey, are we comfortable here? So you got to know your cash flow. That is a spreadsheet we will probably release at some point in the near future at the better contractor where you can plug in your own numbers. um But we're working on that now as we speak.
00:02:24
Speaker
Cut unnecessary expenses and unbuildable labor. This may seem completely common sense, but I see a lot of people do not do it. They may cut expenses, but often oftentimes they don't cut unbuildable labor. So, you know, I take this back to like a law firm. A lot of law firms are huge on buildable time versus not buildable time for obvious reasons.
00:02:42
Speaker
Attorneys have pretty good salaries or their partners, whatever, but they want that time to be billable. You need to make sure, are your crews leaving out the moment they clock in? Try to find ways to cut that waste and get as many billable hours with your crews, even your in your office, your management staff. You got to cut unnecessary expenses but and bill an un-billable labor. Know how to read financials. Guys, there's a lot of business owners that don't know how to do financials, but even worse yet, they don't know how to read them if somebody else prepares them.
00:03:13
Speaker
So I would watch some YouTube videos. Hopefully we're coming out with some stuff too, to help contractors with this, to at least be able to look at kind of the key financials. Stuff that, you know, if you guys are going to a bank to apply for a loan, what does that banker want to see? If you guys are ever going to acquire or be acquired, what does that matter? You know, what what what numbers are they going to look at? You guys need to learn how to read those financials.
00:03:36
Speaker
And I would recommend going through like our accountant, what they do for me, I get a report every Friday and every single Friday, I'm seeing the difference between that week and the previous week and the previous week and so on. And that's telling me, hey, things are trending upwards and things are trending downwards and I need to make some changes in these three or four or five different areas. That is how you guys will keep the catastrophes from happening, hopefully, is by keeping the pulse on these things weekly. um Know what financials matter.
00:04:04
Speaker
You know, a lot of people don't realize, they just think, hey, all that really matters is that when I do tax at the end of the year, that I showed a profit. Guys, that is not all that matters. Cash flow matters a lot. Your debt to asset radio ratio matters a lot. There's so many key things that matter a lot in this area. You got to know your financials. And I would do it weekly. I would do all these weekly.
Building a Collaborative Community
00:04:23
Speaker
If you guys want to learn more and about this topic, ask be able to ask other questions and answers to people that are contractors like yourself,
00:04:31
Speaker
We've recently started maybe three weeks ago, four weeks ago, the Better Contractors, a private Facebook group. And inside that group, we're already 100 members. But inside that group, you can ask questions. People like myself, other contractors, a few industry experts can jump in and help you guys out. Free resource. I wish I hadn't like this 17 years ago to be able to lean on someone that's probably walking the shoes or you know dealt with a topic that I'm dealing with at that time and help me through it. That's what this group is for. That's what we're passionate about. Jump on and join.
Implementing Processes and Systems
00:04:59
Speaker
Number three, know every process and build the best systems out there. Every item should have a process that is capturing data, documenting, and consistently achieving your goals. You don't have a process in place, put one in place. I see so many companies out there, not just contractors, but they don't have the systems and processes in place as they scale. They may be doing what worked in the beginning, which was them and three or four people, they added a crew, whatever, and it worked. But then as they got three, four, five plus crews,
00:05:26
Speaker
They didn't have the systems in place and crew one may show up and they may do this and crew two may show up and do something different. So there's no consistency ah to your customers or even in your profitability, but have a system, have some software, document the stuff in the field, do it all in real time. And honestly, stuff like this helps too with your cashflow. You know, we talked about cashflow earlier. The faster you can get your jobs billed, invoice is sent and all of that, that's key. You know, we work with a contractor.
00:05:53
Speaker
on a home remodel project a while back and billing and stuff. was just It was delayed. Everything was super delayed. We worked with a trucking company one time at Landercorp where Landercorp called them and they ended up sending and sending us a bunch of invoices like eight months after the fact. And the bad thing with that was you know we had already built our customer and the PO was already ended by that time so we had to eat all that cost.
00:06:18
Speaker
but that was a lack of systems that caused that. So guys, have systems in
Team Building and Personnel Decisions
00:06:22
Speaker
place. Number four, get the right team in place. Guys, your team matters. Hire the right people, fire the wrong ones. You don't want to hear this, but you need to be doing it. I know internally, like we have one of the best management teams, Atlanta Corp, that we've ever had. And it it makes an insane difference. And had I had this team a few years ago, we would probably honestly be double the revenues we're doing now.
00:06:45
Speaker
The team matters a lot in the field and also in the office.
Investing in Professional Advisors
00:06:50
Speaker
Number five, have a good banker, CPA, and attorney. Hire a network with the best in these areas and do not settle. I see so many people afraid to spend the money on an attorney, to spend the money on a legit CPA, to not actually go out and try to qualify who is a good banker for you. They just grab a local bank. They grab just a local CPA.
00:07:12
Speaker
They may just grab a local attorney. They don't actually go through and vet those people and make sure, hey, these are some of the best in the field. That matters so much. That was something we did from the get-go before we had any money at all, was we grabbed a good attorney and a good CPA. The banker followed shortly thereafter, but those two had us set up our systems, our business and everything, and do it right from the get-go so that we didn't have any surprise tax things as we ventured into other states. You know, all those things that you kind of hear some of these horror stories,
00:07:41
Speaker
from other contractors, other business owners where, hey, we grew, we started doing this, we started working in this field or this state. We didn't know we owed this tax. So we build the customer and then all of a sudden we get a tax bill due. We didn't have that because we hired in a CPA that worked in all these different states and knew their stuff. So guys, don't wait to spend the money on those. You don't know that stuff as well as they do, hire them to do it.
Cost Analysis and Pricing Strategies
00:08:06
Speaker
Number six, adjust pricing.
00:08:09
Speaker
That was pretty self-explanatory, guys. If you're not making money and you've already got things kind of cleaned up and your expenses are cut, most likely you're you're undercutting yourself on pricing. Go through and know all of your numbers. So your labor costs, you need to know all of your overhead. Your overhead needs to be built into your labor and equipment. You know all the taxes you have to pay. You know, what is, if you have an IRA or something at work, what are every, what is every single cost? So if you have a $30 an hour employee,
00:08:38
Speaker
I hope you guys all know this, but that employee costs you more than $30 an hour. Most likely it's probably in the forties somewhere in there, but you need to know that exact cost for you and then add your profit on top of that. And then if you've got, if your team's working 50 hours a week, meaning that your employees are billing you for 50 hours, but you're only billing them for 40 out to your customers, that 10 hours of overtime needs to be built into this price as well. So factor all of that in, make sure your pricing is accurate. Same thing with your equipment.
00:09:08
Speaker
I see a lot of contractors just think, well, this piece of equipment costs me $5,000 a month on a lease, or $5,000 a month on a loan, add in some fuel, some insurance, and that's what I bill it for. Guys, you're going to have breakdowns. You're going to have some expensive breakdowns. So make sure you do the same thing with equipment. Factor in every type of cost there is. And you need to make sure you historically are putting this into your accounting system so you know actually what stuff costs, but your maintenance costs, your repair costs.
00:09:36
Speaker
um Weird damages, they all happen. We've had motors, we've had this weird stuff on fairly new equipment that's went bad. But know all those costs and then again, add in your profit margin. The equipment's one of those things you probably will not bill it at 40 hours a week, every single day, 52 weeks a year. You probably will not do that. So that unbillable time needs to be accounted for as well.
Improving During Lean Times
00:09:59
Speaker
Finally, clean up your systems. Lean times, this is a good thing. Lean times will force you to clean up systems and processes.
00:10:06
Speaker
put this time to good use. I will often see this with ourselves and others. The lean times will actually end up usually giving you a very good year, the next year or year after, because you've went through, it's forced you to clean up stuff, it's forced you to clean up those systems and make your company better. Hopefully we're all doing this all the time anyway, you know, continuous improvement, constant evaluation, but these lean times will
Community Engagement and Sharing
00:10:30
Speaker
force you to do it. So guys,
00:10:32
Speaker
Hopefully this podcast was helpful. If you liked it, please share it with some other contractors. Again, join our private Facebook group and let's all level up together. Thanks for listening to Better Contractor.