Keeping Your Eye on (The Right) Ball!
Excerpted from a From the Business Leaders podcast – a series exclusively for Remodelers Advantage Members.
If you’re like me, you’re busy! You don’t have time to watch every single area of your business to make sure that things are on track for a profitable year. So, take a page from our top members, remodeling company owners like Gary Marrokal, President of Marrokal Design and Build, San Diego, Ca.
Gary knows that a small number of statistics can “tell the company story.” He doesn’t bother looking at pages of statistics that could be reported. Instead, he focuses on consistent review of seven major success indicators. A flash report containing this information is delivered to his desk every single week.
- Cash Flow—Money In/Money Out
- # of Leads
- # of Preliminary Agreements Signed
- Produced volume for that week and that month
- Produced volume per Project Manager
- Cost per Lead
- Cost per Sale
Because of his intimate knowledge of the way projects flow through his business, Gary knows what steps to take if any of these statistics drop out of alignment with the company goals.
For example, let’s take a look at the Preliminary Agreement number. Because recent history has shown Gary that 83% of the Preliminary Agreements that are sold convert to construction contracts, he can accurately predict the future production load by keeping a close eye on the level of Prelims brought in the door. Starting to slip? Time to ramp up marketing to generate more leads and more opportunities to sell the Prelims.
“Watching these predictive indicators give me a very accurate picture of where our company is at any time,” Gary said. “I think that some business owners spend too much time looking at too many numbers, trying to understand what’s going on. We’ve found that a strong focus on this specific list of statistics tells us what we want to know.”
When Gary and his team monitor revenue produced within a time period, they’re also looking for ways to increase the speed and efficiency at which the job is produced. “We know that if we can produce a job faster, 90% of the time, we will beat our budget and have a delighted client—a raving fan. So we work very hard to beat our schedule whenever possible.”
Marketing stats are monitored to quickly suss out which tactics are producing the qualified leads the company needs. “We’ll test new tactics constantly,” he says. “Marketing is always changing so we are more than willing to invest in new lead generation avenues for three, six or nine months to see if it will deliver. The key here is to give the tactic the time to really work. If it doesn’t, we pull it and try something else.”
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