If you’re a sports enthusiast, you’ve no doubt heard of March Madness, the NCAA Division I men’s basketball tournament. It’s one of the biggest, most exciting and fun events in all of sports. But did you also know it’s projected that the loss of productivity in the opening week of March Madness could cost employers nearly $4 billion in lost revenue, and that each hour of the workday wasted on building brackets or watching games will cost employers $1.3 billion?
This year, we’re proposing that instead of putting time into March Madness, put time into an activity to make your business more productive that we’re calling, “Profit Pandemonium”.
What is Profit Pandemonium?
Profit Pandemonium is our challenge to a business owner to make their business more profitable and efficient. You can’t change everything at once, so take a look at all the parts of your business (your teams) and determine which ones can provide you the biggest return on your investment bets.
How Do You Play Profit Pandemonium?
Start by defining profit opportunities that are critical to the success of your organization — let’s call them ‘Teams’. These Teams already exist throughout your organization (accounting, estimating, job costing, field communication, service delivery, etc).
Next, determine which teams are ‘winners’. For purposes of this game, let’s define winners as those teams that can produce the biggest margins. I like visuals, so I am going to use the sports bracketing system to compete my teams against each other to determine winners in the profit department (my sample brackets are below). The biggest profit makers move on to the next bracket. Eliminations at each round will produce finalists, or two ‘top qualifiers’. Place your bets (both money & time) on these finalists.
Are Your Top Qualifiers Really A Winning Team?
Just because you have a top qualifying team doesn’t necessarily mean they are playing at maximum peak performance. In the tournament world, to improve you can conduct team training, introduce new plays or sharpen old ones, or replace non-performing players or coaches by signing on new talent. In the business world, this translates into training, process improvement, new management or technology improvements. Since our expertise is technology, that’s what we’ll focus now.
For each of your teams, do you have systems in place to win the game of Profit Pandemonium? We’ve compiled a list of the most popular software used by contractors. Understanding what exists goes a long way in making informed decisions and improving performance.
Bracket 1 – Sales
Estimating: Spreadsheets rule for many companies, and they can get quite elaborate. With multiple users, many variations of estimating spreadsheets get created, making updates for material and labor costs or target margins hard to manage. Look for a database driven estimating system so every person estimating is using the same costs and markups. Also, make sure that the final estimate be-comes the job budget, without re-keying.
CRM: A good CRM system allows you to track, manage and nurture your prospects from the first time you contact them to when they accept your bid and beyond. It should provide a history of quotes, allowing you to see your “sweet spots” for winning profitable deals and where you are probably wasting your time. Ideally, CRM should be integrated with the rest of your business critical software so all the data you need will always be at your fingertips.
Bracket 2 – Project Management
Project Management: A strong project management suite gives you a full set of tools, including document management, resource man-agement and scheduling. How much of your project management is being done via email and spreadsheets today?
Purchasing: No one likes surprises at any time on a job, especially at the end. A good purchasing system gives you control of the committed costs on your jobs, and matches invoices to vendor quotes. Improved purchasing can’t help but improve the bottom line.
Bracket 3 – Job Cost
Job Costing: Job costing is the heartbeat of a contractor’s office, essential if you want to ensure a profit on every job. Good software tells at a glance where each job stands in terms of estimated vs. actual costs, percent complete, cash flow, over/under billing and most important, profitability. The more closely monitored the job, the more profitable the project.
Field to Office Collaboration: Streamlined communication and collaboration with mobile solutions keeps everyone in the office and the field on the same page.
You should see big benefits by:
• Accessing reports on demand
• Tracking field productivity daily
• Streamlining payroll time collection & processing
• Creating field logs & purchase orders on the fly
• Identifying & communicating change orders daily
Bracket 4 – Service and Tool tracking
Service Management: If you do service work, how efficient is your dispatch, work order processing and billing? Profitability increases when service work is billed accurately, daily.
Tool & Equipment Tracking: Good tool & equipment tracking software should allow for tracking all equipment and tools used on your jobs to make sure your jobs are realizing their true cost.
What would the benefit be of:
• Having both status and location tracking
• Tracking tools never returned from jobs
• Avoiding tool “hoarding” on jobs
• Making sure equipment is maintained
Tips for Playing Profit Pandemonium
Looking for an experienced coach to help you with your picks? We’ve got you covered with 25+ years of experience helping companies pick the right software to maximize their profits. We have many success stories to guide you as you fill out your brackets and produce a winning team.