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Managing Your Sweeping Business By The Numbers
by Ron Roberts and Ranger Kidwell-Ross 
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 measurables. 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 target. Let's continue on with sales, project management and administration: 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 above. 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? Not likely. 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!
Ron Roberts, More information about Ron Roberts' and his company may be found on his website FilthyRichContractor.com. Ron may be reached via email sent to ron@filthyrichcontractor.com. 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. |
 © 2005 - 2012 World Sweeper and Ron Roberts
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