Managing Your Sweeping Business By The Numbers
by Ron Roberts and Ranger Kidwell-Ross
posted April 2008
Here are the components
that should come together to form your marketing system.
Remember: The sole purpose of your marketing
system is to generate a flood of qualified sales leads.
Do you know how many leads you need coming in weekly
to hit your year-end income target? Do you know how
big a staff you need to handle the paperwork
associated with you proposals and projects?
You should. That's what is meant by "Managing by the numbers."
If you track performance closely, you will realize
that your business' performance is very predictable.
Its progress can be boiled down to a handful of key
If you'll answer the following questions, relying on
gut instinct alone, you can probably develop a feel
for the targets you need to be hitting.
1. How much money do you need to cover your overhead and living expenses this year?
2. What's your average profit per sweeping account?
3. Now, calculate the number of accounts (or sweepers per day) you need this year to cover your overhead and living expenses.
4. How many proposals do you have to send out to land
a typical account?
5. Multiply the required number of accounts by the number
of proposals you make per new account you land.
6. What percentage of your leads (opportunities)
justify a proposal?
7. Multiply the number of proposals required by the
number of leads you need per accepted proposal, i.e., new account you add. This is the
number of leads you need to hit your minimum income
Let's continue on with sales, project management and
8. How much time does it take to call on the average new lead?
9. Multiply that by the number of leads you have to
chase down to hit your target number of new accounts.
10. How much time, on average, does it take to run an estimate and
write up each new proposal?
11. Multiply that by the number of proposals you have to generate to get the number of new accounts you want to attain.
12. Add the two together. That is the minimum time someone
at your company must devote to generating new work.
13. How much time do you spend managing an average client and
account? (If you do several types of sweeping, you may want to develop different numbers for different types of accounts, i.e., construction, street/highway, parking area, etc.)
14. Multiply that by the number of accounts you will
handle during the year. That is the minimum time someone
at your company must devote to management of client accounts.
15. How much paperwork is generated per lead?
16. How much paperwork is generated per average account?
17. How much time is required to process that paperwork?
Do you have enough overhead staff to handle the sales, project
management, and administrative tasks? Alternatively, do you have too much
staff? Let's switch our focus to the field:
18. How many hours a day do your operators and others waste due to
poor planning, weather interruptions, sweepers not ready, other equipment broken or not ready, lack of motivation, etc.?
19. How much materials cost (cost of consumables plus repairs to equipment, including sweepers) will there be in the work you need to complete this year?
20. How many days will your crews work this year (for both sweeping and other services; you may want to break this down into something more manageable, like average number of hours per day or week)?
21. How many sweeps (at average profit per sweep) and, if you do other types of work, how many of those, do your crews need to do this year?
22. How many sweeps per day does each crew need to do?
23. How much revenue per day do the crews need to generate
(divide total sales by number of work days)?
24. How much revenue per day does each crew need to generate?
Does your plan balance out? Check time to see whether your
overhead budget makes sense based on the numbers you calculated
Create spreadsheets to track all of the key measurables. Keep
a close eye on them. Review them frequently with your
leadership team. Are these the only measurables you need to track closely?
However, tracking the above list might be a huge improvement over
your current approach. When you run your business by the numbers, you manage time
more effectively; you resolve problems before they become
unbearable; and most importantly -- you increase the odds of
hitting your income target.
Editor's note: Should you need help implementing the above, call Ron at (913)-961-1790.
Until next time, best of luck with your business!
The Contractor's Business Coach
More information about Ron Roberts' and his company may be found on his website FilthyRichContractor.com. Ron may be reached via email sent to firstname.lastname@example.org.
If you have new information to provide on this topic, let us know and we can add it in as an addendum to this article.