Million Dollar Tradie Number ers s Works kshop 1 16/06/2016 - PDF document

16/06/2016 Million Dollar Tradie Number ers s Works kshop 1

16/06/2016 The e Problem blem 2

16/06/2016 The e Op Oppo portunity tunity 3

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16/06/2016 The Million Dollar Tradie System For a Profitable, Scalable and Systemised Trade Business 6

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16/06/2016 Most Tradies judge performance based on MONEY IN THE BANK ... 9

16/06/2016 Success ssful l Tradies ies wear r 4 hats in relatio tion to the finances es... 10

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16/06/2016 5. Money Consciousness… Results Actions Decisions Behaviour Skills Beliefs Values Identity Environment 12

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16/06/2016 Profit and Loss Statement for July 2014 $122,000 SALES Direct Costs (include your wages if LESS COST OF GOODS SOLD you are on the tools) Opening Stock $10,000 Opening WIP $10,000 Wages (on the tools) $19,500 Materials $39,000 Sub Contractors $14,700 Less closing stock $10,000 $73,200 Less Closing WIP $10,000 $48,800 GROSS PROFIT Fixed Costs (overheads / indirect LESS FIXED COSTS costs) Bank fees $135 ACC Levies $756 Marketing $778 Power $502 Phone $810 Repairs & Maintenance $2,965 Fuel $1,779 Road user chargers $375 Accounting $850 Insurance $711 Rent $1,800 Include a market salary for Interest $917 Stationery $386 yourself if you’re off the tools Office Wages $6,696 Salaries $7,200 Subscriptions $321 General Expenses $1,023 $28, 004 $20, 796 NET PROFIT (PRE-TAX) 14

16/06/2016 What hat is Gros oss Prof ofit?. it?... 15

16/06/2016 Gross Margin = Gross Profit x 100 Sales Eg: $ 48,800 x 100 $122,000 = 40% What t is Net Prof ofit?. it?... 16

16/06/2016 Net Margin = Net Profit x 100 Sales Eg. $ 20,796 x 100 $122,000 = 17% 15% – 20% 17

16/06/2016 Why is my Gros oss Prof ofit it Margin in so Up and Down.. wn...? SALES $122,000 LESS COST OF GOODS SOLD Opening Stock $10,000 Opening WIP $10,000 Wages (on the tools) $19,500 $19,500 Materials $58,000 $58,000 Subcontractors $14,700 $14,700 Less Closing Stock $10,000 Less Closing WIP $29,000 $92,200 $73,200 Gross Profit $29,800 $48,800 Gross Margin $24.4% 40% 18

16/06/2016 Break Even = Fixed Costs Gross Profit Margin 19

16/06/2016 Eg. = $420, 000 40% = $1,050,000 per year 20

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16/06/2016 Mater eria ials ls 35% es 2.7% Subbies Labou our 22.3 .3% 22

16/06/2016 Measures Your Businesses “Vital - Signs”… From Profit Loss Statement (XERO, MYOB) From Trade Management Software ( e.g. Simpro/ Fergus) Planning for Profit / Sales Budget From Enquiry Sheets Jobs / Leads Sales / Jobs From Accounting System (XERO, MYOB) Set your Target Productive Hours / Hours Paid 23

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16/06/2016 $13,000 Quote / Charge Up (Sale Price) Sale Price – Cost of Sales = Gross Profit Gross Profit = $3,000 $10,000 000 (Cost st of Sale les s – Labour, Mater eria ials, s, Subbie ies) s) Mark Up = (Gross Profit / Cost of Sales) = (3,000 / 10,000) x 100 = 30% Gross Margin = (Gross Profit / Sales) = (3,000 / 13,000) x 100 = 23% 26

16/06/2016 Price for a Target Gross Margin… Maintenance Jobs 55% plus… Build lding ing and Re Renovatio ations ns 35% - 45%… Large Projects and Commercial @30%… Back Costing… Count Quantities… Margin not just Dollars… Cost Stages… The Right Software Helps… Learn for next time… Sales - $5,476 (excl. GST) Labour John … 30.5 hours @ $28 Nick… 20 hours @ $21 Jacob… 8 hours @16.50 Materials - Plumbing World Invoice #1 … $1602.49 Invoice #2 … $638.49 Invoice #3 … $14.54 27

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16/06/2016 Options for Pricing… Charge Up… Quote (Each time)… Fixture Rate… Set Price… Why Set Pricing… Work Hard Once… Less Arguments From Clients… Buy Back 10- 15 Hours Per Week… Conversion & Margins… 29

16/06/2016 Making Set Pricing Work… 80/20 Rule… Review Previous Jobs… Materials & Labour Required… Price For Worst Case… Back Cost…Back Cost…Back Cost… Getting Started… Creat ate a Set Price ce For a M Mains ns Pressure ure HWC in a new House Build… 30

16/06/2016 Estimate Hours… Calculate Price… Check Your Margin… Profit Boosting Strategies… Review Rates Regularly… Hourly Rate… Minimum Charge… Consumables… High Rates For Specialist Work… 31

16/06/2016 Review Rates Regularly… Rates for Apprentices… Set Pricing / Quoted Work… Increase Material / Subbie Mark up… Higher Service Fee / Minimum Charge… Improve Team Combinations… 32

16/06/2016 50 Way ays to Mak ake an Extra a $500 Per Week…? 33

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