Running a painting business is time consuming. After ordering paint and supplies, completing paint jobs, providing customer quotes, marketing, employee issues, and bills, there’s sometimes not enough time or mental energy left to dedicate to managing the business. But if you can’t regularly find the time to work on your business, you might not be working in your business for long, either.
This is why it’s important to have a few quick metrics that can help you quickly figure out what parts of your business need the most attention. If you track these metrics monthly, you’ll be able to see if specific parts of your business are calling out for help.
Quick Ratio
The Quick Ratio measures how well you can cover your liabilities. First, add up the assets that you could turn into cash within a month or so if you needed to do so – cash, investments, unpaid customer bills. Now divide this amount by the total cost of all bills you have due within the year.
Any number over one means you can cover a years’ worth of bills. As this number sinks further towards zero, it means that an unexpected expense could leave your business in dangerous territory. Whatever your quick ratio is, tracking it monthly ensures that your business doesn’t slowly creep towards insolvency without you noticing.
Hours Worked to Hours Paid
Nobody in business gets paid for 100% of the work they do. Providing free quotes doesn’t pay the bills. Neither does taking time to buy supplies, pay bills or hire employees.
One thing is certain, though – if you’re spending most of your time doing work you’re not getting paid to do, then you’re going to lose money. This is inevitable for most businesses during their first months, because they have to work to build a customer base. But it’s not sustainable in the long term.
There are several ways to improve this ratio. You can increase the number of quotes that lead to jobs, either by pricing more aggressively, impressing the customer more during the quote process, or refusing to quote jobs that you are unlikely to win. You can increase your minimum size job – meaning one successful quote will lead to more work. You can also have paint delivered by the paint company instead of getting it yourself, if a rep in the area is willing to provide this service. Finally, you can invest in marketing that works without any effort on your part, like a website, so it doesn’t cost you time.
Next 4 Weeks: Hours Scheduled to Total Hours
If you work a 40-hour week, then you’ve got 160 hours to fill with work over the next four weeks. How many of them are already scheduled? If you’re booked solid for three of those weeks, you might not want to take a smaller or less profitable job (or you may want to try and push it out to a time when you know you’ll be less busy). On the other hand, if your schedule is looking pretty sparse, it might make sense to take a job even if it’s not “high-value” work.
To learn how ProPainter Websites helps its customers succeed, call us at 855.385.1134 or email us at Team_PPW@ProPainterWebsites.com.