In a business as complex as a roofing business there’s so many different numbers that you can track performance on. If you try to track everything it’s nearly impossible. Here’s the secret:
Some metrics are more powerful than others! I like to use the 80 / 20 rule on everything in my business. When tracking Construction metrics and KPI’s you want to spend your time on the 20% of metrics that are going to yield 80% of the results.
So Today I want to share with you five metrics that clients in our contractor program are tracking in their metric dashboard.
Average $ Per Sale
I’ve heard this metric called a couple of different things including average job size. This metric tracks the average price of your jobs. This can be a very powerful metric when building your financial plan. It’s very easy to project your sales if you know how well you and your team is closing leads and you have your average $ per sale.
The quick and easy way to determine your average $ Per sale is to take your total sales revenue and divide by the number of jobs you sold. So if you did $500,000 in sales revenue and that was 50 jobs your average $ per sale is $10,000. That’s powerful information to have!
Average $ Per Lead
Average $ per lead is the average amount you can expect to sale per lead that you run. This metric tells you how much you can expect to make for every lead you run. If you have 20 leads on the calendar and you know you make $2,000 per lead. You can expect to turn those leads into $40,000 in sales.
To calculate your average $ per lead take your total sales and divide it by the total number of leads. So if sales were $1,000,000 and you had 400 leads the average $ per lead would be $2,500. So every time you go on a lead your comymakes $2,500!
Imagine showing that metric to a sales guy. If they know there earning good on every lead there going to be pumped up to run appointments.
Average Profit per lead
This is a very powerful metric but it’s one of the more difficult to track if you’re not using our master job sheet to track your jobs profits. This metric tells you how much profit you make on every lead you run.
I abstlove this metric especially with a sales team. In an instant I can tell you which guy on my sales team is going to put more money n the bank. This tells you who your stud salesman are by telling you who is selling at a higher margin.
Net Job Cashflow
This is a powerful metric no one is talking about. Let’s face it… CASH IS KING! What makes it tough for contractors is that they are often fronting the money for materials and labor.Even if they take a deposit it doesn’t often cover it.
This metric looks at the net cash on all you jobs. All payments received less all money paid out on jobs. Here’s why this is important. Let’s say you’ve sold $100,000 in jobs. Paid all material and labor on them of $60,000. On the surface all looks good $40k to the good. But sold isn’t collected. Let’s say down payments and completed job payments only total to $70k. That’s a much different place to be. So your net job cashflow is actually $10,000 ($70,000 – $60,000).
I’ve seen many times this number many of times in the negative. This is why down payments/deposits are so important to cash flow.
Estimate %.
This is a metric A lot of contractors are not tracking.This metric text the number of estimates that you give and divides it by the number of leads that you have. This will tell you on average how many times you estimate a lead. So if you delivered eight estimates and you had 10 leads and then 80% of the time you give an estimate when you go out on a sales appointment.
This can tell you a couple things about your sales team. Do they have an issue closing or do they have an issue with getting in front of people and delivering estimates or following up to make sure that they get people estimates. A loan number here may not be a closing issue but an estimating issue.
So there you have it seven of the top metrics that all contractors should be tracking in their business. If you’re interested in getting all the metrics and wonderful templates we are put together check out our program for contractors here.
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