This is Why I Lost $200k
I was losing money every single day and I didn’t realise it until I actually looked at the bank account and watched it shrivel up. I was ignoring all the alarm bells. I was ignoring my accountant. I was ignoring everyone because I was so proud of myself and how busy I was.
I looked at how much money was being invoiced out and I was like of course I’m making money. But the fact of the matter was that I lost about two hundred thousand dollars and here’s why. I had invoices going out that didn’t reflect what the boy’s hours were.
It sounds so simple for me to say this to you now, but you as a business owner will make extreme profit when you start to work out exactly how many hours the guys are clocked on for and how many hours are being charged. Here’s a sneaky tip: charge out more hours than what the boys are being paid.
IInstead of having the guys do an 8 hour a day with 7.6 hours charged out, charge out 8 or 8.5 hours. Now you’re asking me well how do you do that, that’s impossible, that’s lying, that’s cheating. No, it’s called having these expectations set out in your contract from day one.
Set up minimum charge-out fees, minimum hours spent on site – this can be easily arranged through prior consent, before you even get to a customer’s house.
And trust me, when you start to have a quality business with a quality name, your clients won’t question this type of stuff. If the guys are only there for 45 minutes then maybe you have a minimum charge out of one hour.
Too many guys out there that are on-site for 30 minutes and they get all chummy with the owner and just call it at $250. That is a loser’s mentality. You’re in business to make money and provide for your family. Start charging out more – if not equal – to what your hours are. Make these changes today!