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Paul_Maskill's avatar
Paul_Maskill
Contributor 3
8 days ago

Ask-an-Expert: Ask a CFO Anything About Your Numbers (2 Days Only!)

Got a money question you've been sitting on? Drop it here.

Hey I'm Paul Maskill, founder of Blue Collar Business Advisors. I scaled and exited my own electrical company, and now I work as a fractional CFO for home service businesses. I help owners build steady cash flow and predictable profit.

This week, I'm hosting a free webinar: 8 Year-End Financial Myths Costing Your Business Money Oct 22 | 11:00 AM ET

This thread is an open AMA. If it's about the money side of your business, ask it!

  • Pop your question below in the thread. 
  • I'll answer here on Oct 22–23, right after the session.
  • Can't make the webinar? Ask anyway!

Not sure where to start? Here's what owners ask me most:

  • Should I actually buy that truck before December 31?
  • How do I know if my prices are high enough?
  • How much should I be paying myself, and how do I get there?
  • Are automatic January raises hurting my margins?
  • What should I talk to my CPA about before year-end?
  • Do I need more leads, or do I need to close more of the ones I already have?

P.S. The more specific you are, the better my answer can be. Share your trade, team size, or rough numbers, but only what you're comfortable posting.

I'll be answering Oct 22–23, and the thread closes Oct 23 at 5:00 PM ET. I'll work through the oldest questions first.

If there's a problem in your business, waiting for January won't fix it. Ask it today.

3 Replies

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  • Kathy's avatar
    Kathy
    Contributor 2
    5 days ago

    Hi Paul, thank you for the presentation today. We know one mistake we have made is paying our technicians on salary without the performance based pay component. We were very generous and we see it is not sustainable. As we implement new systems any suggestions on how to create a performance based incentive that is easy to track and manage? For reference, we are a chimney sweep company. Inspector (salesman) does a paid inspection/report visit and creates a quote. Repair team does the repair work (2 hour repair to multi day repair). Thanks for your time!

    • Paul_Maskill's avatar
      Paul_Maskill
      Contributor 3
      5 days ago

      Hey Kathy,

      Thank you for joining the presentation and bringing your question here. 

      One caveat - make sure you have your recruiting engine happening in the background. When performance pay is implemented, there is a chance that some people will leave (i.e. the people costing you a lot of money). So you want to make sure you are building a bench for others to step up/step in.

      As far as your specific example, I would still focus on hitting the 50%+ Gross Profit. For most home service companies, this means our all-in labor is less than 25%...which means our compensation is less than 20%. In your case this would include sales commission and the repair work labor. How you split that 20% up really depends on the business but what I see a lot is:

      • 10% for selling (assuming no base salary) and 10% for the repair work
      • 12% for selling (assuming no base salary) and 8% for the repair work

       

      You'll want to play with the numbers to determine what works for your business. You can back test this and you can also create hypotheticals (i.e. How much could a great sales person sell if that's all they did? And then how much would we need to pay them in order to attract great sales people?

      Hope this helps!

      You also want to make sure that you set this up the right way legally based on your state/province labor laws as every jurisdiction is different.

      Thanks!

  • Paul_Maskill's avatar
    Paul_Maskill
    Contributor 3
    5 days ago

    Thank you to everyone who joined the event today. 

    For anyone who didn't get their question answered, please post it here and I'll make sure to answer all of them!