What a great month! You dreamed, planned and worked hard for this. You finally had more jobs than your small crew could handle. This month you hired new crew members and you delegated job oversight to the crew leaders. You finally started working ON your business instead of IN your business. Now the sky is the limit, there is no stopping you!
Wait! What? Really? This can’t be, right? I just don’t understand?
*“How is it possible that there is less money on the bottom line now, with multiple crews in the field, then when it was just me and a few guys?”*
Does this sound familiar? Have you ever heard it before? Have you been the one saying it?
The bottom line. What does it really mean and is it true?
In financial terms, this is the Profit (or Loss) that a company made during the time period listed on the Profit & Loss or Income Statement. But it is not, let me repeat that NOT, necessarily the amount of money the business has added to or subtracted from the bank accounts.
Without going into a lot of detail regarding Profit and all the reasons it is important to have a high Profit AND an increase of cash in your bank accounts, let’s look at two key features that determine the amount of profit a company makes.
Look at income and expenses
First, we need to look at the income; if we are not charging enough anything else we do will make us profitable.
Second, we need to track expenses, are we spending too much?
What is the owner missing? If he was profitable when he worked in the field he obviously charges enough and is used to keeping control of his spending. What changed? How can he have more crews out there, doing more work that is priced the same as before, but bringing in less Profit?
My guess is that the owner needs to look at the time each job is taking. Why? Because, now that the owner is not out there with the crew, who is the one pushing to keep on schedule? Just a half-hour longer per day with a crew of 3, adds 1.5 man-hours per day or 30 extra man-hours per month! If there are multiple crews this can really add up.
What should the owner do? He needs to compare the time and payroll allocated to each job vs what actually occurred. What is the most effective way to do this? By utilizing a time tracking app like ClockShark. There are many great features available and it is convenient. And best of all, it works with your smartphone.
Not only can the crew leader track time for the entire crew from each job site, but he can also see the time scheduled for each job and the individuals assigned to their crew for the day. In addition, ClockShark has an integrated GPS feature, so the owner can see the location of each crew in real-time.
Now that we have technology on our site, we have more time to grow our business to be profitable, successful organizations!