Are You Flushing Your Profits Down The Toilet?
If you don’t know your numbers, you may be flushing profits down the toilet.
As a hard working plumbing business owner you spend a lot of time, effort and money winning work and jobs, but that does not necessarily mean that you are operating a profitable business!
It could be that you are winning some jobs but the price you are charging is not enough to cover your expenses on that job. Another possibility is that your profits are too small to pay for the time and effort you spend keeping your business running.
Understanding your profitability and the way you quote, is an important factor of operating any business, particularly in the plumbing industry. ‘You have to know your numbers’, manage your cash flow, measure your profit and loss, determine your break-even point, and understand all the financial aspects of your plumbing business.
You don’t need to be an accountant, but you need to understand what you are looking at so you can ask your accountant the right questions at the right time.
Keep in mind, you are NOT a plumber, you are a business owner who operates in the plumbing industry…. there is a significant difference!
A plumber’s tool bag includes a wrench, drill and hammer, while a plumbing business owner relies on the numbers mentioned above to get the job done!
This can be daunting for any business owner, especially for those trained in a trade, rather than in business — but there are fast and easy ways to master your numbers and get up to speed on what you need to know.
Here are four questions you can ask yourself before you get started:
- How much do I need to invoice to not lose money?
- Is it worth continuing to run my business?
- Am I planning to make a profit this year? Do I have a budget?
- I have a plan – but am I keeping a constant eye on it?
Focusing on your numbers as a business owner can dramatically increase profit and cash flow.
We’ve found that knowing your numbers improves your accountability to your own results.
Being your own boss, for real!
This begins to change your mindset from having a plumbing job to having a plumbing business which in turn improves how you, the business owner, sees your business and the profits it generates.
If you don’t know your numbers you may be flushing your profits down the toilet!
Look forward to hearing from you. Cheers – Seb
Sebastian Caruso is the resident Tradie Business Consultant & Accountant at SP Solutions. He has presented at the inaugural Master Plumbers Business Breakfast as well as presenting at various Master Plumbers Trade BBQ’s held at Tradelink stores across Melbourne. He thrives on advising and educating business owners on the growth of their plumbing business and ultimately their personal wealth. Having grown up around Trade Based Businesses, Sebastian has a special interest in helping Plumbers achieve their profit and growth potential. He understands your everyday problems and challenges as a plumber, and unlike many accountants, tries to keep it as simple as possible!
You can contact Sebastian through the SP Solutions office 9355 0500