The last thing I want to do is offend anyone which I am discovering is impossible.
Everyone's reality is different.
That said, today I am going to talk a little about the business books.
In reviewing my year end P & L, I made a whole bunch of money on paper, (I wish someone would show me where it is) with the highest profit margin and lowest revenue I have ever turned.
My overall revenue is 17% of what we did in 2006 and 19% of 2007.
It has been a downward spiral ever since.
But now comes the great news:)
My projections right now and they keep getting better everyday are showing a 30% increase in revenue for 2011.
Let me tell you that I am a happy guy. I will be able to put people back to work, I will be able to drop back and run my business instead of doing production and I will be able to take a vacation (A long much needed one).
Now you may be asking yourself a couple of questions and I’ll address the ones I would ask.
1) How can you have the highest profit margin ever with the lowest revenue?
Cut way back on expenses and go to work. Lay people off, pay your bills net 60, buy shorter lath, find cheaper places to buy material, buy gas in Mesa or the west valley, be relentless about collections, use contract labor and have them sign a net 60 agreement, just hold that cash as long as possible.
2) How do you know that your projections are 30% higher for this year?
My client’s projections are higher and that is what I use to plan ahead. I start talking to my clients in November about their forecast and do tentative planning and projections. I am usually very close.
(Note: Always be able to shoot from the hip if it goes south)
I know I keep saying it and I will continue to do so, but this year is going to a really good recovery year.
After that we’ll need to work on getting our prices back up to where they should be + a 20% increase.
I hope & pray that 2011 is a much better year for all of us and the beginning of a "turn around" for the enire economy. I know all too many Surveying and Civil Engineering Companies, which were once very busy, have now shut their doors - and most are pretty much one man shops & working out of thier garage - if at all. I personally feel that the Metro Phoenix area will never see (at least) the construction industry building at the pace it was in (say) 2006 - before the real estate bust. I have never been unemployed and began working at 16 - by the way, yes, it's time for my sports car...
ReplyDeleteLet's hope Mr. "RJR Survey's" is absolutely correct. I'd love nothing more than to see a 30% increase in everyone's workload.
Lastly, remember, we are worth much more than we are currently billing out for.
Kindest Regards,
Anon...