By Michael Whistler; NTCA director, region 10
February 1st: Check January’s Profit and Loss statement (P&L). Good -- we made some money.
March 1st: Check February P&L. Yay! In the black again.
April 1st: Check March P&L. Uh oh -- in the red a little. What happened? We look a little further and see we started two large projects and didn’t get our billing out on time for one of them. Whew! We’re ok!
April 15th: Down to our accountant’s office to sign our tax stuff for last year. She shows us how well we did, but then comes the bad news: even after our quarterly estimated payments we still have to write a big check. It looks like we did better than we figured. Thankfully there’s enough in the bank to write the check, but it’s going to be tight for the next few payroll cycles.
We get back to the office and ask each other the same old questions; if we made all that money, why isn’t it in our bank accounts? Are we doing something wrong? Paying our people too much? Paying ourselves too much? Spending too much on trucks and tools? Is the local distributor charging us too much for our tile and rough materials? Too much office payroll and office supply money spent? Or the biggest question: are we not charging enough for our work?
These and a hundred other questions course through our minds. There’s one thing for sure: our two biggest competitors down the street aren’t going to give us any hints. So how do we find the answers to our questions?
Luckily for us, we have the last five years of the NTCA Profit Planning Survey. We pull them out and start going over the numbers.
These Profit Planning Surveys answer all our questions, and the very best part is that we didn’t have to spend thousands of dollars to get them. The Profit Planning Survey is a completely safe and anonymous comparison of all the same type of companies that you and I are running. Being an NTCA member gives us the ability to answer all those tough money questions and see how other companies like ours are doing it.
I don’t know if the NTCA will continue this forever, but for now and in the foreseeable future, it’s FREE!!! That’s right, included as a free service in the cost of our yearly membership dues. It only takes us a few minutes a year to print out our P&L and Balance sheets, answer a few questions and fax it over.
To end this story, we can easily see that we are somewhere between an average profit and high profit company. And we can see the differences in the areas we need to change to be right up there at the top of the high profit group!
For more information on the Profit Planning Survey, contact membership director Bob Brown at bob@tile-assn.com or phone (601) 939-2071. Or look for the survey when it’s sent to members in the spring.
