![HOW MOST
BUSINESS
OWNERS
“PLAN”…
‣ What did you do last year?
‣ “$3.4 Million”
‣ How much PROFIT did you
make?
‣ “Well, [insert excuses for
bad performance here].”
‣ What do you want for next year?
‣ “Our goal is $5 Million”
‣ Why?
‣ “Because [insert all the
wrong reasons here].”
Questions:
✓What about
PROFIT?
✓Why $5,000,000?
✓ Why are we in
business?](https://image.slidesharecdn.com/profitworkshop2022-day1-1-221011210612-12983f83/75/Profit-Workshop-2022-Day-1-1-pptx-20-2048.jpg)
![Too many people [mistakenly] believe they
won’t have what they want until they get to
$XX million in sales…
In most cases this is total BS - and it's
preventing you from creating a business that
SERVES you.
Only when you get clear about what you
want, why you want it AND understand
the
MATH (economics) that drives your
business…
do you have a chance at getting what you really want!](https://image.slidesharecdn.com/profitworkshop2022-day1-1-221011210612-12983f83/75/Profit-Workshop-2022-Day-1-1-pptx-22-2048.jpg)
Profit Workshop 2022 - Day 1 - 1.pptx
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- 4. QUICK INTRO’S 60 SECONDS PERCOMPANY ‣Where you’re from; ‣What you sell; ‣Size of company; ‣Why you’re here;
- 5. THE DIRTY LITTLE SECRET OFTHE INDUSTRY…
- 6. 41% of companies madea pre-tax profit of 3% or less excluding salary and expenses…
- 7. YOU ARE HERE BECAUSE… ‣You want to make more money from your business… A LOT more money! ‣ You want to have a DEEP understanding of PROFITABILITY, and the underlying MECHANICS; ‣ You want to have a business that is PERMANENTLY PROFITABLE - 15- 20%!!; ‣ You want to understand how to think, act and make decisions like a multi-millionaire home improvement business owner does; ‣ You want a better mindset around money; ‣ You want to deposit more cash into your “wealth account” month-after-month, year- after-year; You’ll Get: ✓Peace of Mind ✓More Options ✓More Freedom
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- 9. 2 SEMINARS INONE PROFITABILITY WEALTH ATTRACTION
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- 11. AGENDA ‣ Breaks around10:00a & 3:00p; ‣ Lunch around 12:00p, back at 1:30p; ‣ Q&A SESSION after lunch both days; ‣ Scheduled end of day around 5:30p; ‣ Cocktail hour 5:30p-6:30p today; ‣ +1’s (non-owners): ‣ Day One ends at afternoon break 3:00p; ‣ Day Two starts at 10:00a break;
- 12. HOUSEKEEPING ‣ We’re HERE.Let’s BE HERE; ‣ ASK QUESTIONS; ‣ GET BACK FROM BREAKS ON TIME; ‣ IF ANY OF US SAY SOMETHING YOU FIND OFFENSIVE or DON’T AGREE WITH DON’T LOSE OUT ON THE MESSAGE; ‣ PARTICIPATE/NETWORK - You can only get out of it what you put into it; ‣ NO RECORDING ALLOWED; ‣ STAY UNTIL THE END; ‣HAVE FUN!! To get the most out of this event and to be respectful to others
- 13. This is a“safe” room. This workshop is a judgment free zone. There may be times during the 2 days that you’ll be uncomfortable - this is actually a good thing. Be ready for it, but know that NO ONE in that room is going to be judging you - so don’t judge yourself. We are ALL in the room to get better - Brian and Mark included.
- 14. TITLE TEXT SUSPEND DISBELIEF “It’swhat you learn after you know it all that really matters.”
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- 17. ‣ We arenot offering you legal, tax or financial services; ‣ You should consult with an accountant or other appropriate professional before making any decisions that may impact taxes or finances. Legal Disclaimer
- 18. WHY ARE WE TEACHING THIS?Sales | Close Rates | NSLI | Etc.
- 19. TOO MANY PEOPLEARE RUNNING IN THE WRONG DIRECTION… ‣ They think, “If I could just get…”; ‣ that one great employee ‣ that killer sales presentation ‣ a better performing website ‣ better customers ‣ sell X million($) more
- 20. HOW MOST BUSINESS OWNERS “PLAN”… ‣ Whatdid you do last year? ‣ “$3.4 Million” ‣ How much PROFIT did you make? ‣ “Well, [insert excuses for bad performance here].” ‣ What do you want for next year? ‣ “Our goal is $5 Million” ‣ Why? ‣ “Because [insert all the wrong reasons here].” Questions: ✓What about PROFIT? ✓Why $5,000,000? ✓ Why are we in business?
- 21. A BETTER WAY…? ‣ Youhave your “number” - which is based on the OUTCOMES you want for you and your family; ‣ Tell the truth about where you are today; ‣ Choose a Profit Model - 15/20 - and UNDERSTAND profitability; ‣ Reverse Engineer the business to get to your profit goal (outcome or result); begin with the end in mind…
- 22. Too many people[mistakenly] believe they won’t have what they want until they get to $XX million in sales… In most cases this is total BS - and it's preventing you from creating a business that SERVES you. Only when you get clear about what you want, why you want it AND understand the MATH (economics) that drives your business… do you have a chance at getting what you really want!
- 23. YOU DON’T NEED TODO $10,000,000 A YEAR TO GET RICH FROM YOUR BUSINESS.* * Nothing wrong with wanting a $10M business - if for the right reasons…
- 24. TO GAIN THEFREEDOM (+WEALTH AND SUCCESS) YOU CRAVE - YOU MUST TAKE CONTROL OF…
- 25. The Wealthy Contractor Income, Wealthand Freedom Framework™
- 26. ‣ Clarity andFocus; ‣ Financial Discipline (knowing your numbers!); ‣ “Right” Profit Model; ‣ Sustainable - i.e. Growing Through Cash Flow, Not Debt;
- 27. PROFIT IS NOT SOMETHINGTO ADD ON AT THE END, IT IS SOMETHING TO PLAN FOR FROM THE BEGINNING.
- 28. LET’S BE CLEAR ABOUT PROFIT… WITHOUTENOUGH OF IT: •You won’t have enough money to effectively market your services; •You won’t have enough money to hire GREAT people; •You won’t be able to give your family the rewards they deserve; •You won’t have the solid foundation you need to make it the next 10 years;
- 29. ‣ What’s leftover after everything and everyone is paid - including YOU! ‣ Profit is NOT: ‣ Sales commissions NOT paid; ‣ Your salary (for the JOB you do); ‣ Customer deposits; PROFIT IS THE CASH YOU CAN TAKE HOME!!!!
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- 33. YOUR BUSINESS IS A VEHICLE And,you get to choose the type of vehicle you have!
- 34. EITHER YOUR BUSINESS WORKS FOR YOU… OR YOUWORK FOR YOUR BUSINESS.
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- 38. ARE YOU READY? Believe in yourself… webelieve in you - even If you don’t yet believe in yourself.
- 39. MASTERING THE FUNDAMENTALS OFPROFITABILITY FOR HOME IMPROVEMENT COMPANIES
- 41. PERSONAL SIDE: Married for32 yrs 6 children / 5 grandkids Aerospace Engineer Personal interests: - Playing the piano - Mountaineering Survived a plane crash - Scuba diving
- 42. “Things are notalways what they may seem; the intelligence of a few perceives what has been carefully hidden.” the first appearance deceives many; Phaedrus (cousin of Plato)
- 44. How this relatesto our Industry
- 48. Engineering Problem Analysis How totake a problem, make some sense out of the cause, and then come up with a PRACTICAL solution
- 50. YOU DESERVE IT! BrianKaskavalciyan: Wealth Attraction
- 51. 1756 Stokesley Road Baltimore,Maryland 2122
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- 55. Day 1 Agenda: 1.Some Profit & Loss (P&L) Basics 2. Types of Margins & Making Bus. Decisions 3. How to Troubleshoot your P&L 4. How to BUILD your P&L (Chart of Accts)
- 56. Day 2 Agenda: 1.Balance Sheet basics: “Cash vs Accrual” 2. Detailed Troubleshooting of your P&Ls 3. Compensation Plans 4. How to SMARTLY GROW your Business
- 57. Success, Wealth & Freedom HELPINGBUSINESS OWNERS ACHIEVE MORE
- 58. 1. The P&Lis YOUR Management TOOL. It is your personalized SCORECARD! 2. OWN IT…Don’t rely on your bookkeeper or accountant to do it for you. 3. Gateway to: Bonus plans, Job Descriptions Accountability, Budgets, Right Focus, etc. Profit & Loss (P&L) Basics AKA: Income Statement or Operating Statement
- 59. REVENUE: 100% 100% 100% MATERIAL:27% 25% 35% LABOR: 13% 10% 15% SLS COMMISSION: 10% 10% 10% MARKETING: 15% 18% 5% OVERHEAD: 20% 22% 20% PROFIT (EBIT): 15% 15% 15% P&L MODEL Examples Different ways of getting to the same bottom line Value-Added Selling Model Low Pricing Model
- 60. REVENUE: 100% MATERIAL: 27% LABOR:13% SLS COMMISSION: 10% MARKETING: 15% OVERHEAD: 20% PROFIT (EBIT): 15% Direct Costs: (COGS & Commissions) • Function of your pricing model Direct AND Indirect Indirect Expenses Install Volume…NOT Net Sales 40% COGS P&L Basics Direct Cost vs In-direct Cost 30
- 61. BUSINESS MATH 1. 10%of 100? 2. 30% of 80? Answer = 10 Answer = 24 3. 60% of 70? Answer = 42 4. 70% of 8,000,000? Answer = 5.6 Mil 5. 12% of 3,000,000? Answer = 360,000
- 62. ‣ Net Margins(in accounting) is meant as BEFORE TAXES NET MARGINS ( I.E. YOUR PROFIT) Applicable if you have an active Credit Line ‣ EBIT? Earnings Before INTEREST & TAXES ‣ EBITDA? Earnings Before INTEREST, TAXES, DEPRECIATION & AMORTIZATION (tangible vs intangible assets) ‣ BELOW THE LINE: Other Income, Other Expenses (eg; pass- throughs)
- 63. The THREE MARGINS NETMARGINS GROSS MARGINS CONTRIBUTION MARGINS CONTRIBUTION MARGINS
- 64. REVENUE: 100% MATERIAL: 27% LABOR:13% SLS COMMISSION: 10% MARKETING: 15% OVERHEAD: 20% PROFIT: 15% P&L Model: Example Net Profit Margin (EBIT) Gross Margin = left over after COGs Contribution Margin = Left over after Sales Acquisition Costs The Different “Profit”Margins
- 65. What’s my monthlyBreakeven Revenue? 1. Monthly OVERHEAD $? 2. TOTAL direct costs PERCENTAGE? 3. What’s left over is CM 4. Divide #1 by #3 = B.E.
- 66. Say you’re doing$1,000,000/mth Divide the OH by your Contribution Margin $200,000 / 0.35 $571,429 = B.E. ur CM is 35% and your OH is $200,000
- 67. What’s my monthlyBreakeven Revenue? 1. Monthly OVERHEAD $? 2. TOTAL direct costs PERCENTAGE? 3. What’s left over is CM 4. Divide #1 by #3 = B.E.
- 68. Another Admin, SalesMgr, Call Center Mgr? Leasing Software? New Furniture, Computers? Company vehicles, etc? Can I afford…
- 69. Say it’s a$52,000 Decision Divide that amount by your Contribution Margin $52,000 / 0.35 $148,571 ‣How many more CONTRACTS do you need? Avg Cont = $15,000… 10 deals ‣How many more LEADS do you need to issue? 20% net closing = 50 leads / yr… 1 lead / wk Contribution Margin: Business Decisions Workbook
- 70. How to RECONCILE YourP&L “ACTUALS” to your “MODEL”
- 71. 1. Job Costingis NOT being done properly 2. Pricing formula not implemented properly 3. No consequences to rep from discounting 40% COGS Matching your “P&L MODEL” to your “ACTUAL” 4. CPIL is higher than standard (model) 5. NSLI is lower than standard (model) 6. Budget $ not defined 7. Budget is not monitored or managed REVENUE: 100% MATERIAL: 27% LABOR: 13% SLS COMMISSION: 10% MARKETING: 15% OVERHEAD: 20% PROFIT: 15% Monthly Troubleshooting Guide
- 72. 1. Job Costingis NOT being done properly 2. Pricing formula not implemented properly 3. No consequences to rep from discounting 40% COGS Matching your “P&L MODEL” to your “ACTUAL” 4. CPIL is higher than standard (model) 5. NSLI is lower than standard (model) 6. Budget $ not defined 7. Budget is not monitored or managed REVENUE: 100% MATERIAL: 27% LABOR: 13% SLS COMMISSION: 10% MARKETING: 15% OVERHEAD: 20% PROFIT: 15% Monthly Troubleshooting Guide
- 73. The P&L ORGANIZE &REDEFINE YOUR CHART OF ACCOUNTS Your Scorecard
- 74. REVENUE: 100% MATERIAL: 27% LABOR:13% SLS COMMISSION: 10% MARKETING: 15% OVERHEAD (G&A): 20% PROFIT: 15% HOW IS YOUR P&L CURRENTLY ORGANIZED? Accounts (Parent / Master) List of all the accounts are the CHART of ACCOUNTS ‣ Advertising ‣ Automobiles ‣ Bank Service Charges ‣ Dues & Subscriptions ‣ Insurances ‣ Maintenance ‣ Office Supplies ‣ Payroll ‣ Professional Fees ‣ Rent ‣ Repairs ‣ Taxes ‣ Utilities EXAMPLE OF Q/B’S DEFAULT SETTINGS EXPENSE S
- 75. 4000 -REVENUE: 100% 5000-COGS 40% 5100 MATERIAL: 5200 LABOR: 5500 COMMISSION: 10% 6000 MARKETING: 15% 7000 Sales OH: 4% 8000 Production OH: 5% 9000 Admin OH: 11% PROFIT: 15% Chart of Accounts (PARENT ACCOUNTS)
- 76. Making things easierto manage 4000 REVENUE: 100% 5000 COGS: 40% 5010 - Material & use tax 27% 5020 - Freight 1.5% 5030 - Labor: 10% 5040 - Measure: 1.5% 5500 COMMISSION: 10% Sub Accounts Parent Accounts Parent Accounts
- 77. Sls Comm NEEDSto be positioned here on P&L 50% MAX (in this example) COGs+Com CEILING! ‣ Job Costing (Job P&L) ‣ Recasting (comm calculator) CONTROLS: 4000 REVENUE: 100% 5000 COGS: 40% 5010 - Material & use tax 27% 5020 - Freight 1.5% 5030 - Labor: 10% 5040 - Measure: 1.5% 5500 COMMISSION: 10% Making things easier to manage
- 78. Example of theMarketing Accounts
- 79. ORGANIZE IT! Re-defineyour Chart of Accounts If your P&L shows any account with the word, “OTHER”, behind it, the BK made a data entry mistake.
- 80. 4% 5% 11 % Once organized, youcan define your budget model
- 81. EXAMPLE OF DETAILEDCHART OF ACCOUNTS IN HANDBOOK
- 82. ‣ Determine yourBreak Even point ‣ Use Cont Mg to make Decisions ‣ Know how to Troubleshoot your P&L ‣ Organize/Redefine your Chart of Accts. Morning Eye Openers
- 83. NEEDED FOR AFTERNOON ‣ Profitand Loss statement OR Chart of Accounts - Ideally on a spreadsheet;
- 84. ‣ this isa drive for video testimonials A HA’S?
Editor's Notes
- #19 now you may be wondering, why am I teaching this? here’s the deal - the majority of my top clients are millionaires from this business. I lost everything in 2008 and had to start over again… why because I focused too much on the top line revenue of my business rather than on my profitability - I grew that business to over $11million but guess what I realized I was much better at the marketing, at coaching home improvement entrepreneurs. Today, everything I do is about helping contractors work less and make more. But I realized that the only people I’m really helping through my current company is people that can pay me up to $100,000 a year to help them but, what about the owner of the smaller company I love helping people free themselves from the trap a business can put them in