good idea of not only how much things
will cost you today, but also how much
things will cost you when you cross
each threshold ($200,000 a year, $1
million a year, $2 million a year, and
so on). Reverse engineer your numbers
and see how much those overhead
costs really are to run your business.
9. How to work ON my business,
not just IN it
I wish I would have learned early on
how to work on my business and not
just in it. Looking back on the early
years, even the first 10 years of business, I never really made time to improve the business. We made the jobs
as they came in the door, sold when
we needed sales, and billed when we
needed money. We did all the things
without ever making any effort to
improve the business itself.
The importance of working on your
business instead of in it is completely
underestimated. Wherever you are in
business, start right now working on
the business instead of only in it. Even
if it starts with committing two hours
every Friday morning to solely work on
your business, that is progress. Identify
something your business needs improvement on and then start hacking
away at it in during that designated
time. Every quarter or six months or
year, increase that amount of time as
much as you possibly can.
As you start working on your business you will start seeing the effect,
and will want to work on it more and
more. It truly changes everything and
you will start to feel like you own a
business instead of just a job.
10. Reverse engineer numbers
I wish I would have been in the habit
of reverse engineering our numbers
before starting the business.
I’ll probably get some pushback
on this and that’s OK. If you can start
with a profit in mind and work back
towards the number of sales it will take
to achieve that, then you can have such
an amazing base to begin with. If you
want a profit of X dollars or X percent-
age and you know what the market
will bear as far as price, then just ask,
“What is it going to take to achieve
How many sales do you need to
have? What kind of overhead can you
have? What kind of expenses will be
allowed? What kind of debt service can
you have on capital improvements?
If you start with profit in mind first,
you have something to work toward
and it will drive your focus. Too often
as business owners we work our tails
off and get to the end of the quarter or
the year and there’s nothing left. If you
start with profit first, I assure you that
you will work within the box you con-
fine yourself to on operating expenses.
You’re going to keep job materials in
check and labor where it needs to be to
produce the amount of product you’ve
laid out. Then you can just use that
model and build upon it.
While this seems contrary to the
way accountants and bankers do it, it
needs to be the way business owners do
it because we’re in it to make a profit.
We are also, of course, in business to
impact people and make our community a better place, but at the end
of the day if we aren’t profitable, we
aren’t really a business.
I can only imagine if I would have
done this in year two or three of my
business, where I would be today. I
would be on a whole different level –
there’s no doubt in my mind.
What do you wish you would have
Bio: The son of a construction company
owner, Jeff Finney is the founder of Oklahoma-based Ultimate Cabinet Components and a
2018 40 Under 40 honoree. He also hosts a
blog and “The Push Thru” podcast.
Standard Operating Procedures (SOPs) are of vital importance to a business, especially a