IS YOUR BUSINESS HEALTHY: ARE YOU POISED TO SURVIVE THE STORMS?
Sue Rawson, Controller for Roofers Supply
A Healthy Business can survive increases and decreases in business if you take the steps necessary to withstand the storms. Do you know what it takes to ensure your health?
First you need to understand the importance of an accurate bid, and for every business this is different based on your overhead. Make sure you understand all the costs that you incur when installing a roof. You need to be efficient at costing the hours and all other costs that need to be covered. Make sure you include the salaries of installers, sales personnel, your own salary, workers comp premiums, fuel, payroll taxes, and any other expenses your business has.
Example: If it takes 3 people making $15.00 per hour, 2 days to install a roof how much with this cost?
3 people x 8 hours per day for 2 days = 48 hours x 15.00 per hour = $720.00. How much is workers comp insurance? (You will need to look at your premium) But for this example we will add an additional $10.00 per person = $30.00. What about your sales personnel = $100.00, how about your salary for these 2 days = $300.00. What about the payroll taxes at 8% = $89.60. Now you have the cost of the truck, the fuel, and the insurance on the truck. This will add an additional $100.00. Before you bid this job you have $1,339.60 just to pay for your overhead. Now add the cost of the product, the delivery of the product and additional money just in case you run into issues. (Cause that never happens, right?) Also, you need to include the healthy business fund. This is the profit you want to put in the bank for a rainy day. If you have a customer that doesn’t pay you timely, you need money in the bank to pay your employees and your suppliers while you wait to receive your funds. The more money you put in savings, the more healthy your business becomes.
You know the saying “Never spend more than you make” This is the start of a healthy business, and it gives you the opportunity to live a more stress free life. When you have savings, you are now in a place to expand your business. You have the cash to add additional employees, equipment, and receivables.