CoatingsPro Magazine

JUL 2015

CoatingsPro offers an in-depth look at coatings based on case studies, successful business operation, new products, industry news, and the safe and profitable use of coatings and equipment.

Issue link: http://coatingspromag.epubxp.com/i/537615

Contents of this Issue

Navigation

Page 18 of 84

18 JULY 2015 COATINGSPROMAG.COM Money Matters It's important to look at the numbers because the owner needs to be able to know — without being involved in ever y project — where each project is. By Leslie Shiner, Owner of Te ShinerGroup Focus on the Numbers… Not Your Gut! T he biggest mistake that many small businesses make is to not focus on the numbers. W hen a company starts out at a small level, the numbers aren't neces- sarily that important. W hen there is a single owner and a single project, the owner has his or her hands in every- thing. But as soon as you add employees to the mix, that's where the numbers become critical to success. It's import- ant to look at the numbers because the owner needs to be able to know — without being involved in every project — where each project is. And consid- ering that most small business owners don't have a background in accounting, when they look at all of the numbers, it can be confusing. If you can narrow your company down to a couple of numbers, it won't be overwhelming. An easy way to get an overview of your numbers is to utilize a dashboard. Te advantage is that you won't have to look at pages and pages of detail. Instead, you can focus on a few numbers and get an idea of how the jobs and your company are doing. You just have to know which numbers are important. The Quick Peek You can actually create a dashboard yourself if you don't have someone on your ofce staf who can help: You can use a program or a spreadsheet. It shouldn't be rocket science, but it needs to be done in a methodical way so that during the job and at the end of the job, you can fgure out how much it really cost and what the gross proft was (hopefully not a loss). W hile you should have a good set of fnancial documents, you can delegate those tasks to a bookkeeper. But it's important to delegate and not abdicate fnancial responsibility; once the fnancials are complete, you need to make sure to review them. You don't actually have to comb through pages and pages of reports, but instead pick two to four metrics that you need to better manage your company. Tere are many diferent metrics you can use, and you can choose which metrics are most important. For example, maybe you want to know the gross margin (percentage) and gross proft (dollars) on each job that you're doing and for your company overall. Te gross proft is a fnancial calcula- tion by job or by company that is your total income on the job minus the total cost (direct expenses) to do that work. Ultimately, the gross proft dollars are used to cover your overhead and leave money for net proft. Te gross proft divided by the income is the gross margin, which is a percentage. T he reason we look at these numbers on a percentage basis is to compare jobs of different sizes. Let's say you have a company that makes $10K profit. Is that a good number or a bad number? It depends. If that

Articles in this issue

Links on this page

Archives of this issue

view archives of CoatingsPro Magazine - JUL 2015