← Owned and Operated - A Plumbing, Electrical, and HVAC Business Growth Podcast
Owned and Operated - A Plumbing, Electrical, and HVAC Business Growth Podcast
Double Your Profit Day #9 Maximize Your Earnings: The Secret to Efficient Work
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Welcome back to Double your profit series. Today's a pretty fun one. It's called Training for profit Awareness. That means we're going to train our team. What is profit, why does it matter and how do we find it? One of our core values is transparency. Transparency for us is, are we being transparent about the score? Are we being transparent about where the business is at? Now? A lot of businesses and business owners don't want to fully share the score. It's a little uncomfortable because they're afraid of what their team will think when they see the financials. It is very hard for your team to make profit driving impact and decisions every single day if they don't know what the score is. So the bigger the business gets, you have to invest in your team and train them. And the way to teach and train financials without the shock and without the uncomfortableness is just training it. We spend a lot of time on this. So here's the three biggest things that we do for training profit awareness. We, we go open book financials every month. The second Wednesday of every single month, we are cracking open that P and L and we are talking about the previous month. We talk about the dubs, we talk about the L's and we talk about what we're actively working on to continue to get better. If people don't know the score, they can't help fix the score. The second thing that we do that is really impactful is we train it during our leadership trainings. Now, my favorite way to do this is a game. We print out nine pieces of paper and we write in each box, the box, biggest parts of the P and L revenue, materials, labor, gross profit, overhead, salaries, marketing, fleet, infrastructure, and finally net profit. And what we do is we take 10 pennies and we say, hey, we had 10 pennies of revenue. Now where did that 10 pennies go? Two pennies went to materials and two pennies went to labor. So that means out of those 10 pennies we have six pennies at the gross profit line. Now, one penny went to office wages, one penny went to marketing, one penny went to fleet, and one went penny went to other and we're down to 20% or two pennies at the bottom. Our net profit line. That's roughly our budget. So we construct that in front of them and we start running exercises. Hey, what happens if I take a penny off of revenue? Where does that come from? Does labor go down? No. Does materials go down? No. Gross profit goes down by one penny. None of my overhead changes, but I lose a penny on net profit. So that game really teaches the impact of decisions and ideally discounts and improper pricing on a P and L so arm to make an impact when they're given a real piano. The third thing that we do that really trains profit awareness is we have an every single day gross margin P and L every day. We know the score, we know what the cost of our labor is, we know what our revenue is and we know our material month to date. We talk about it weekly on Mondays with each team leader and we train on it constantly. Now those three things the open score, the transparency, the frequent training what that do is it creates a culture that of profit first mentality. The team understands what we're here for. We're here for gross profit, we're here for net profit and they also understand how it impacts them. So that is how we train for profit awareness. I would love it if you shared this video with your team and figured out how you can drive profit awareness into your business like and submit.