2024 in Review:

Challenges two clients faced and how we solved them

By John Corban

In 2023, two clients joined my program with a similar goal: to increase profits and systems. Both were committed to improving their businesses but needed guidance on how to achieve sustainable growth. The first step was to thoroughly assess their profit-and-loss statements, loan repayments, cost structures and current processes being utilised. By pinpointing where their costs were too high relative to sales, we were able to develop an actionable plan.

The initial plan involved:

1. Refining cost structures: We analysed staff hourly rates, adjusted charge-out rates, and increased markups on materials. I explained the financial model in simple terms. They installed my quoting sheet which quickly made quoting much easier while understanding what needed to happen on each job to accumulate profit and a better bank balance.
2. Implementing tracking systems: Job-specific tracking systems were established to monitor job progress and ensure profitability.
3. Regular reviews: We reviewed completed projects to identify and address underquoting and inefficiencies.

The breakthrough
The plan delivered impressive results, with both clients significantly increasing their profits by the end of the year. However, I wanted them to push their businesses further. (They both ran one team, with both owners off the tools for 3-4 days a week, but their personal wage and net profit could be much higher).

Overcoming hesitation to scale

The next step I proposed was running a second team. Sharing overhead recovery costs across two simultaneous projects would exponentially boost profitability. Both clients understood the concept but hesitated due to several concerns:

• Difficulty finding skilled employees with the right attitude
• The stress of managing additional projects
• Finding 10 more projects, although they felt this could be met as they had work booked for four months in advance and referrals were strong

Acknowledging these concerns, I suggested a phased approach. First, we focused on strengthening their existing operations further:

1. Building strong systems: Enhancing quoting, project management, and operational systems to streamline processes removes guesswork and ensures everyone knows what needs to be done and when
2. Improving team culture: Introducing team-building initiatives to foster a collaborative, high-performing culture

The second breakthrough in 2024

By the beginning of 2024, both clients were ready to implement the second-team strategy.

• Client A: Found an experienced team leader through their network, paired them with a third-year apprentice, and supplemented larger projects with part-time skilled labour which they already had. The experienced team leader’s professionalism and organisation elevated productivity, doubling profits within the year as this second team contributed to overhead costs.
• Client B: Partnered with an experienced subcontractor to handle five additional projects. By securing fixed quotes, every project guaranteed a profit. This strategy not only contributed significantly to paying overheads but also enabled the owner to stay off the tools, increased his wage by $20,000 and boosted overall profits by 75%.

Key benefits

Initially hesitant about scaling their business, both clients embraced the change when the right processes and systems were in place. By addressing their concerns and adopting a step-by-step approach, they achieved remarkable results such as:

• Higher morale: A strong team culture lead to happier, more motivated employees
• Increased profitability: Shared overhead costs, more accurate quoting, enhanced productivity and project management processes drove significant profit growth
• Improved cash flow: An additional income stream created positive cash flow, which reduced stress and created financial stability
• Reduced stress: With everyone working in a systematic way, an additional income from the second team and better planning meant project delays and challenges no longer caused anxiety

Conclusion

By taking calculated steps, these clients not only achieved their goals but surpassed them. Their journey proves that the right guidance, systems, and mindset can transform challenges into opportunities. It also shows that scaling a business doesn’t have to feel like chaos if you break it into manageable pieces.

Here’s to more growth and success in 2025!