Making Money? Time for the Mid-year Check

It’s that time in the heat of summer again! Are you making money? We’re officially past the halfway mark of this year.?

Which means…

It’s time to hop off the hamster wheel for just a few minutes and sanity check whether we’re on track to hit our financial goals for the year.

If you haven’t looked at your budget all year, then yes, this reminder is written specifically for you. ??

It’s not who works the hardest who wins….

If you are losing money on jobs, doing more jobs just digs a bigger hole.

You need that balance of aligning the numbers, and then pursuing efficiency and “working the hardest.”

So, practically speaking, how do I ensure my business is making money?

In contracting, the biggest money thief is uncalibrated overhead recovery markups.

Meaning, if you pay $25 for an hour of labor, how much do you need to mark that up to also cover all of your overhead expenses?

eg. insurance, trucks, utilities, marketing, owner’s salary, and more.

I’m writing this article assuming you’ve already built a budget to establish your overhead recovery markups.

If you haven’t done that yet, go read this and follow those instructions.

The task at hand in this article is to review and update your budget.

The task at hand

Reviewing and updating your budget is not a big deal. Seriously.

It should take 20-60 min tops.

It’s basically the act of getting a copy of your P&L YTD and checking each line to see how the YTD actual spend is compared to what you had budgeted.

Meaning, if I budgeted to spend $20k ($1,666/mo) on fuel this year, halfway through the year I should be at $10kish.

But let’s say I go check my YTD P&L and I see that I’ve spent $14k on fuel already.

This means I’m averaging $2,333/mo in spend on fuel, not $1,666/mo. Meaning I’ll spend closer to $28,000. not $20,000 on fuel by year's end.

That $8k difference is coming from where? Who’s paying for it?

Yep, you’re right.

It’s coming from your profit bucket. Your pocket.

The money that should be your profit in your pocket.

But instead, because I didn’t update it, and I was spending more than budgeted, all my jobs were being priced at too low rates. They were being priced to generate $20k for fuel for the year. Not $28k.

The good news is, it’s an extremely simple fix.

Make yourself a cup of coffee, get up a bit earlier one morning, print out your YTD P&L, and compare each line on your P&L just like I did with the fuel example above. Tweak and adjust as needed to bring your budget numbers in line with how your expenses are in reality.

Most companies have maybe 30-60 lines on their P&L.

(A “line” on your P&L being things like fuel, marketing, insurance, etc)

Maybe 3-10 of them need to be updated.

But don’t let the seeming “smallness” of updating 3-10 lines in your budget deceive you.

In my example above, one line being out of whack was costing me $8k!

Don’t put it off. Update your budget.

Not updating it could mean you work the entire year for no profit.

Updating it could mean you have your best financial year yet.

Make the obvious choice.

Please.

For your own good.

Get started

If you’ve never even built a budget to establish your pricing, I made a?free budgeting tool?available to anyone, even if you don’t use SynkedUP.

AND… if you’d like to dig in and then want to have an expert look over your shoulder at your budget,?schedule a free budget call?with our team! We’ll sanity-check it with you.

If you do use SynkedUP, and want a hand reviewing your budget inside the software,?book a call with our experts! (only for active SynkedUP users)

Drop a reply or comment here and leave me your thoughts or questions. Make sure you take an hour now, to create a massive difference in your profit for the year. Your future self will thank you ??

Weston Zimmerman?

SynkedUP co-founder and CEO