Small Business Advice from Nexstar® Coaches
Ask any successful residential plumbing, HVAC or electrical contractor and they’ll tell you that there are strategies in the numbers. That’s why our Nexstar business coaches continually preach the importance of studying them daily, weekly, monthly and annually.
While it’s easy to set this task aside as you focus on the day-to-day operations of your business, it’s imperative for managing and growing your business.
Contractors across the country saw an increase in service agreements, customers, revenues, and profit within a down economy. Why? Well, in addition to getting small business support from outside their company and having good systems in place, they are tapping into these Five Financial Beatitudes for Business.
#1 – Be diligent about month-end close
Produce an accurate set of financial reports by the tenth of every month. A timely, accurate financial month-end close is critical to your bottom line, so find your roadblocks and remove them.
#2 -Track what you want to manage
When adding a new line item to your chart of accounts, ask yourself: Do I truly need this each month?
#3 – See where you’re going through comparisons
A P&L Variance report is a must. If you’re not seeing one of these every month, you don’t know what you’re missing!
#4 – Departmentalize to distinguish the gold mines from the land mines.
Your sales and direct costs should be departmentalized down to the Gross Profit/Margin line.
#5 – Include accurate depreciation in your monthly P&L
Depreciation expense is one of those “stealth costs.” You can’t touch it and you don’t know how much it is, unless you understand it and dig for it.
If you’re driving for a boost in your bottom line, we recommend that you begin with the beatitudes!