Actions that Lead to Profits

The goal of every business is to make money or a profit.  For some reason profits seem to elude some businesses more than others.  They are working hard day in and day out, but they seem to just be spinning their wheels and not getting anywhere.  They are trapped in the American dream treadmill, moving faster and faster but going nowhere.

The reason they are working so hard and not seeing any fruits from their labor is that their actions are in the areas that do not lead to the profitability of the business.  We are busy, but we are spending our time with non-productive activities.

So what is a productive activity?  The definition is very simple.  An action that moves us toward making money is productive and an action that leads away from making money is non-productive.

In business we have to realize that “people working” and “making money” are now the same thing.  Once we understand this, we can now look at our business from a different perspective.  We now need to look at our profitability per activity.  So now we can start looking at a different set of metrics to measure how profitable a particular job or activity is in our business.

The financial measurements we now have to look at to see if we are making money are:

[1] Net Profit    [2] ROI – Return on Investment    [3] Cash Flow.

We need to determine our Profit KPI’s (key performance indicators) by determining profit per....

• Direct labor hour
• Team member
• Transaction or Job
• Customer
• Product or Service

The first area you should look at is gross profit per labor hour.  This will help you to determine what types of jobs you should focus on to increase your overall profits.  Let’s take a look at this example...

	Job A	Job B
Revenue	$3,900	$9,000
Material Costs	$2,250	$3,000
Labor Costs	$450	$2,500
Direct COGS	$2,700	$5,500
Gross Profits	$1,200	$3,500
Gross Profit Margins	30.8%	38.9%
# of Labor Hours	18	100
Gross Profit per Labor Hr.	$67.00	$35.00
Determine Labor Hr per month 10 Techs @40 hrs  (@90% compactly * 4.3 wks) 36 hrs per tech	1560/hrs	1560/hrs
Gross Profit per Month	$104,520	$54,640

In this example we are comparing 2 different types of jobs.  At first glance, Job B has a higher gross profit margin and seems to be more profitable.   However, when you further analyze the gross profit per labor hour, doing more of Job A type jobs can double the profitability of your business.

By understanding this, we can now direct our marketing to target more “A” type jobs.   Or, we can look at how we can be more efficient with Job B type jobs to reduce our labor hours per job.  Once we implement these 2 basic strategies we can begin to learn how to work smarter and not harder in our business.

5 Tips to Turn Overwhelmed into Productivity

I was once talking to a business owner who had lost his focus in his business.  He would come to work day in and day out, doing the same thing day in and day out and not really get anywhere.  He confided in me that he always has this overwhelmed feeling and he felt that his business was lost in the fog and he did not where he was at and he actually forgot where he was going.

The feeling of being overwhelmed gave his life a sense of not being balance.

Does this sound like you and your business?  Don’t panic, you are not alone.   Here are a few ideas to get you back on track.

First.... Realize that it's almost impossible to achieve a work-life balance.  Your focus is always going to pull you more in one direction than the other.  You can't achieve balance but you can achieve  harmony between your work life and personal life.   Remember, you can't physically and mentally be in two places at the same time.  If you are at home don't mentally be at work and visa-versa. 

Second... Realize what is going on.  You can't fix a problem until you admit you have one.  Stop pretending that you have everything together because eventually something is going to pop.  Once you start getting that feeling of being overwhelmed try to identify the triggers.  Then you can begin to work on being in charge of your attitude instead of letting something or someone trigger that negative feeling.

Third...  Identify your overwhelming triggers.  When we get the overwhelmed feeling, it's like our mind and body's circuitry goes into overload.  If we think about it and look back we'll be able to identify specific things or events that trigger that feeling.  Once we identify what these stressors are we can begin to take control back.

Fourth...Call time out.  The overwhelmed feeling hits us when we lose our focus.  Take 15 minutes and step back, maybe listen to your favorite music, go for a walk, or close your eyes and take a power nap.  You need to take some time to quickly recharge your batteries. 

 

Fifth... Find meaning in what you do. Write a list of what's most important to you both professionally and personally.  Now determine how doing what you need to do now will help the people that are most important to you.  We find meaning in our work when we can figure out how what we do helps others.  It's easy to let down ourselves but it's a lot more difficult to know that you are letting down people that are important to you.

Stress is NOT always positive but if managed correctly, stress can be enhancing to both our performance and overall well being.   

How to Identify Profitable Jobs

The goal of every business is to make money or a profit.  For some reason profits seem to elude some businesses more than others.  

They are working hard day in and day out, but they seem to just be spinning their wheels and not getting anywhere.  They are trapped in the American dream treadmill, moving faster and faster but going nowhere.

The reason they are working so hard and not seeing any fruits from their labor is that their actions are in the areas that do not lead to the profitability of the business.  We are busy, but we are spending our time with non-productive activities.

So what is a productive activity?  The definition is very simple.  

An action that moves us toward making money is productive and an action that leads away from making money is non-productive.

In business we have to realize that “people working” and “making money” are now the same thing.  Once we understand this, we can now look at our business from a different perspective.  We now need to look at our profitability per activity.  So now we can start looking at a different set of metrics to measure how profitable a particular job or activity is in our business.

The financial measurements we now have to look at to see if we are making money are:

[1] Net Profit    [2] ROI – Return on Investment    [3] Cash Flow.

We need to determine our Profit KPI’s (key performance indicators) by determining profit per....

• Direct labor hour
• Team member
• Transaction or Job
• Customer
• Product or Service

The first area you should look at is gross profit per labor hour.  This will help you to determine what types of jobs you should focus on to increase your overall profits.  Let’s take a look at this example...

	Job A	Job B
Revenue	$3,900	$9,000
Material Costs	$2,250	$3,000
Labor Costs	$450	$2,500
Direct COGS	$2,700	$5,500
Gross Profits	$1,200	$3,500
Gross Profit Margins	30.8%	38.9%
# of Labor Hours	18	100
Gross Profit per Labor Hr.	$67.00	$35.00
Determine Labor Hr per month 10 Techs @40 hrs  (@90% compactly * 4.3 wks) 36 hrs per tech	1560/hrs	1560/hrs
Gross Profit per Month	$104,520	$54,640

In this example we are comparing 2 different types of jobs.  At first glance, Job B has a higher gross profit margin and seems to be more profitable.   However, when you further analyze the gross profit per labor hour, doing more of Job A type jobs can double the profitability of your business.

By understanding this, we can now direct our marketing to target more “A” type jobs.   Or, we can look at how we can be more efficient with Job B type jobs to reduce our labor hours per job.  Once we implement these 2 basic strategies we can begin to learn how to work smarter and not harder in our business.

Looking for more ideas to increase the value in your business to make it sellable one day?  

Take this quick 15 questionnaire to learn how valuable your business in right now and the 8 areas to work on to begin increase its value today! Go to...  www.actioncoachsellabilityscore.com 

Where Does the Time Go? You Can't Manage Time but...

A wise sage said, that once you spend your money, you can always make more... but once you spend your time, it’s gone forever.

When I ask business owners what’s the #1 thing that they believe is holding them back from achieving more, the majority of them will say managing their time better. +

But, you can’t manage time. Time is like a flow of energy. All you can do is manage yourself better to harness that energy.

Below are my top 10 tips on how to manage yourself better to achieve more....

1. Set personally motivating goals …Most of us know what we need to do to be successful, but we procrastinate doing them for one reason or another.  Because we are not focused on a motivating goal, we will put off an important task for the next “shiny” item that looks interesting.  Having written goals that motivate you will help you align your tasks to your goals.
2. Don’t finish today until you plan tomorrow …If you wait for the morning to figure out what you need to do that day, you are losing valuable time.  If at the end of each day you review your goals and write out your action items making sure they are moving you closer to your goals, you will find that you will increase your productivity by 15-20%.
3. Eat a Frog for Breakfast EVERY day …This saying comes from Brian Tracey’s book of the same name.  The idea is simple.  Each day pick the biggest, hairiest frog (task) you need to do and schedule to do it first thing.  If not, you will push it off and find that it keeps moving to the next day on your to do list.  Once the biggest frog (task) is accomplished, your day will be filled with items you enjoy doing and you will feel more fulfilled and motivated at the end of the day.
4. Don’t Major in Minor things …This idea is tied to item #3.  If you focus on accomplishing the major items on your list, you will find you will have room for the smaller items.  But, if you fill your day with the smaller items, there will never be room for the big major items.
5. Create a Default Diary - Stick to it …Most of us don’t get important tasks done because we don’t schedule a specific time to do them.  Create a calendar where you schedule default times to work on the major activities you need to get done on a weekly basis.
6. Invest time, don’t spend it …Our biggest time waster is spending our time on doing busy work instead of important work.  We should invest our time in working on items that will affect our profits.
7. Have agendas for all meetings …You should not only have an agenda, but have a goal for what  the desired outcome of the meeting is.  Focus agenda items based on the goals of your meeting.  Don’t mix strategic meetings with tactical meetings.  When you do, you don’t accomplish as much.
8. Have conference calls to save time …Team communication is important, but sometimes it’s inefficient to bring in team members from the field to have a meeting.  Instead, conference in team members for tactical meetings.  Conference call meetings can be conducted more often from different field locations than in-person meetings.  Regular conference calls will help you keep your team focused and aligned to the overall goals of the company.
9. Learn to delegate to your team …The busy work we spend time on needs to be delegated to lower paid employees, so you can invest your time on long-term strategy and more profitable tasks.
10. Hire an ActionCOACH to keep you on track!  Every business needs someone to help you see the forest through the trees.  That’s why I also have a coach.  I find that it is way too easy to miss the more important items I need to work on.  My coach helps me to keep focused on my goals.  I personally found that the more focused I am on my goals, the more productive I’ve become.

Help! I’m stuck in a rut!

A few years back I was standing at our kitchen sink, washing the breakfast dishes, looking out our kitchen window and I noticed this fly.  It was just flying in circles, climbing up and down the window screen desperately looking for a way out.   Feeling the fresh air, it could sense that its freedom was near.  This seemed to motivate the fly even more to try to get out.

I realized that if I didn't give the fly any help, it was destined to be flying in circles all day, and I knew that the buzzing would begin to get on my nerves.  Eventually my son who was 3 years old at the time came over and  pushed the screen open to give the fly an opening to finally break through to freedom.

As I continued to wash the dishes, I was amazed that the fly just kept going up and down in the same meticulous manner.  The path to freedom was just inches away but it seemed stuck looking in the same places to find a small hole to break through.  When I was done washing the dishes and contemplating what had just happened, my son came over and asked me, “Why didn't it just fly away?”  I thought about it for a moment and answered him that the fly never stopped to think that he could.

How many of us are unknowingly doing the same thing?  My son's question made me think about how many businesses can't move forward.

How many of us can’t break through to that next level of success because we are stuck in our own comfort zone?  How many business owners continue to do the same thing over and over again expecting different results?

But just like the fly on my window, we are stuck in our comfort zones, imprisoned by our routines, stuck doing the same thing over and over because it is just familiar to us.  A wise sage once said, “An imprisoned individual cannot set himself free.”

Eventually the fly did break through to freedom, but only when my son came over and repeatedly pushed it toward the opening, so it could finally break through to the freedom it so desired.

Who do you have that can give you more perspective and will continually push you toward the opening so you can break through to your next level of success?

As a business coach, I help my clients see the forest through the trees, give them the knowledge they need when they need it, and hold them accountable week in and week out to reach their goals.  

A business coach helps business owners create a long-term vision and set goals and milestones to achieve that vision.  A business coach can help business owners talk through solutions to overcome problems.  Business coaches can also assist with building your team, helping team members to contribute to your overall success.  Business coaching keeps business owners on track to continue to grow and create their own success.

At ActionCOACH, we coach business owners to success with proven, tested and systematized ways to reach your goals and grow your business no matter what industry you are in.

Remember every champion has a coach, and that coaching is not just sports any more.

Find out more about the ActionCOACH approach to growing a successful business.  Check out my latest workshops and seminars www.actioncoachseminars.com or call our office for a free 1/2 hour phone "breakthrough coaching session" to discover if coaching can help you.

3 Ways to Accelerate Your Business

The other day, I was re-listening Brad Sugar interview Keith Cunningham as part of the Master Mentor Series.  Keith is a business profitability expert, who wrote the course seminar that world-renowned Robert Kiyosaki turned into the best selling book Rich Dad, Poor Dad.  Of the many gems I received from listening to this interview, I would like to share one with you.

Most of us would agree that our business isn’t growing as fast as we would like.  If we had to describe the speed of our growth, we would compare it to the speed of a tricycle.  Most of us are peddling away as fast as we can, but - on a tricycle - we can only peddle just so fast.  To stay at that fast pace takes a lot of energy.

What can we do to increase our business growth from the pace of a tricycle to that of an automobile or jet airplane?  

Add systems, dials & knowledge.

Systems – A tricycle has only 3 systems to make it move: a steering system, a 3 wheel system and a peddling system.  None of these systems needs to be monitored or needs much knowledge to operate.  These systems are so simple even a “caveman”, sorry, I mean a 2 or 3 year old can operate it.  What allows an automobile or jet to move fast?  It has more sophisticated systems.  No longer is our acceleration powered solely by our effort, but by the automobile or jet's systems. These systems accelerate our growth, but use less energy on our part.

Dials – If our systems are not working properly, we may not be moving at all or it may even lead to an accident or someone’s death.  To prevent system failure, we need dials or a dashboard to monitor our speed and acceleration.  If we are moving at the speed of a jet and we make a mistake, it could lead to some serious consequences.

Knowledge –  Just about anyone can ride a tricycle.  It doesn’t take much knowledge or training compared to that of an automobile or jet.  However, just having a pilot’s license isn’t enough to make you qualified to fly jets.  You need continuous and more strenuous training.

To move your business growth at jet speed:

1. Create new or improve your current systems.  A jet moves faster than a propelled aircraft (or a tricycle) because of its systems.
2. Create a dashboard of KPI’s (smart numbers or key performance indicators)  for your business to monitor the effectiveness and efficiency of your systems.  If not, you might be in spiral spin downward and won’t know it until you crash.
3. Continuously increase the knowledge of you and your team to run your systems better.

Please let me know your thoughts in the comments section below...

Are you Burnt Out in your Business and Life?

With the challenges the economy has presented, many small business owners may find themselves working longer hours and trying to do more with fewer resources. This scenario can lead to burnout. How do you personally avoid burnout and (hopefully) establish a good balance between work and the rest of your life?

Well, what is the real cause of burnout?  You put in the effort, but you don’t feel that you are progressing. You’re just spinning your wheels.

To avoid burnout you must have:

• Clarity 
• Focus
• Purpose

A lot of business owners seek out a business coach when they are burnt out.  By working with them to clarify their vision & purpose and at the same time creating worthwhile meaningful goals, I can help business owners become motivated and re-energized doing the same activities that made them feel burnt out in the first place.

If you stay focused on your goals, you will maintain your motivation and avoid burnout.

Looking to get more focused in your business?  Check out ActionCOACH of Jacksonville's Quarterly GrowthCLUB planning workshop.  This workshop allows business owners to get out of their business for a day to refocus, get energized, and leave with a written action plan to reach their goals for the next 90 days.  To find out the date of the next GrowthCLUB CLICK HERE

Please let me know your thoughts in the comments section below...

3 Strategies to Help Turn Activity into Results

As a business coach one of the biggest challenges that I’ve seen most entrepreneurs face is that of time management. The first misnomer is that you can’t really manage time. I believe that time is just a flow of energy. All we can do to harness this energy is to manage ourselves better.

The second misnomer is that we mistake activity with productivity. I’ve seen a lot of very busy and unproductive entrepreneurs. (I can include me in that group)

This might sound funny but a lot of people tell me they are “too busy” for a business coach. They don’t have time to take on anything “new”.

 We can get so busy doing and doing and doing and don’t take the time to step back to make sure we are doing the right activity in the right way.

One of my priorities as a business coach is to advice business owners and executives to make sure they are doing the most productive thing possible at every given moment. To make sure that the activity they are engaged in will get them closer to their predetermined worthwhile goals.

1. Create Worthwhile Goals The first step to managing yourself better is to have clear written goals that are true priorities in your life. If they are not priorities you will find yourself attracted the newest “shiny thing” that appears in your life. Without specific predetermined worthwhile goals you will be travelling the ocean of life with a sail boat that has no sales.
2. Conduct a Time Study 
   There’s a saying that says,”If you can’t measure it, you can’t improve it”. We need to first plug the holes in our ship before we can take out. Most of us have no clue on how we really spend our time. One of the tools I’ve personally used and coach my clients to use is to conduct a time study. For one week record everything you do in 15 minute segments. At the end of the week categorize each task to see where you are spending most of your time. After conducting a time study one client realized that he was spending 3 hours a week doing inventory, a task that he could train one of his employees to do. He then took those 3 hours and put them to use to work on his business to achieve his goals.
3. Use a Default Calendar In his book “First Things First”, Stephen Covey, tells the story of the big rocks. The story teaches us that to be really productive we have to focus on the “big rocks” in our lives and do them first and all the little stuff will fall into place. By determining our worthwhile goals we are picking our big rocks. A tool that I use to make sure I always have time for my “big rocks” is a default calendar. In essence my default calendar is blocks of time where I schedule appointments with myself to do my “big rocks”. I found that if I don’t schedule those “big rocks” my schedule tends to get filled with the next “shiny thing” that comes my way.

By learning how to invest your time and not spend it, you will become more productive. Remember, time is your most valuable asset. Once you’ve spent it, it’s gone forever.

Please let me know your thoughts in the comments section below...