Do you know your numbers?

About 15 years ago, Tony Flanagan, a Home Hardware dealer next to the Ford plant in Oakville, Ontario, won an award for being the best hardware store in the country.

Tony’s business was super profitable and growing like crazy – even though he was competing with the Wal-Marts, Home Depots and Canadian Tires of the world.

I asked him point-blank, “Please give me a single sentence why you are so successful.”

He answered with the most boring – and also the most critically important – sentence ever heard around a business.

“I know my numbers.”

Boy, did he ever.

“I sold $72,340 of stuff from my sidewalk last year,” he told me. (I can’t remember the actual number. Tony would.) “I sold $24,320 out of that end aisle display,” he replied – pointing to an area of his store about the size of a phone booth.

He had all these numbers written on little index cards, filed away neatly.

Do you know the numbers on your renovation business as accurately as Tony knew his store?

Do you know how much money you made – or lost – on every single project you tackled?

Can you recite your 2014 total sales, gross profit, overheads, net profit, employee labor costs, subtrade labor costs and marketing costs? Do you know, to the penny, your owner’s compensation and how much the company made – and the difference between the two?

And do you know how this compares to the numbers being put up by the best renovation firms, of similar size, all across Canada?

Sources of financial information on the metrics of running a renovation or homebuilding firm are available from “peer” groups such as Renovantage and Remodelers Advantage, or in simplified (admittedly, crude) form in our own Canadian Contractor Salary Survey, published every April.

If you’d like more information on any of these, please email me at spayne@canadiancontractor.ca.