A full-service remodeling firm with annual sales of $3 million likely has a sales and office staff of six, including the production manager. Six people working 40 hours per week for 49 weeks per year (allowing 3 weeks for vacation/holidays) is a total of 11,760 hours. How productively are those hours being invested?
To analyze sales efficiency and get a realistic figure for sales hours per contract, divide total company sales hours by the number of construction contracts signed. (This figure will include sales time spent on prospects that don't become actual jobs and hours spent by non-sales staff.)
Defining the current reality provides a way to measure improvements and allows your management team to participate in those improvements. If it takes 89 sales hours per contract to deliver the project and client experience you promise, you know that next year's goal of 24 contracts will require 2,136 sales hours. Your time budgets tell you if those hours are available. If not, where will they come from? Will it require a staff addition or reassignment?
When one Minnesota company found that 43% of the lead salesperson's time was spent on administrative tasks, the owner led an investigation into how to better handle these tasks to make more selling hours available. Team participation in this process ensures buy-in and the likelihood that changes will actually be implemented.
THE BASICS The key to budgeting time is to keep it simple. Begin with yourself, then replicate the process with your sales and office staff. Later, after basic time budgets have been integrated into your standard operating systems, they can be fine-tuned with subcategories for increased detail. Define four to six basic categories of time use, such as marketing, selling, administration, and production. Identify the number of hours you want to work each month, for example, 180. Determine what percentage of your time should be devoted to each category: marketing 5% (9 hours), selling 40% (72 hours), administration 35% (63 hours), and production 20% (36 hours).
Set your first time budget intuitively. Do the percentages make sense? When you are comfortable with the ratio, adopt it as your budget. Then implement a system for tracking your time in 15-minute increments using the selected categories. Within a few months a picture of actual time use will emerge, and you can adjust your budget or activities accordingly.
Creating a time budget helps you identify how you want to spend your time, which helps you make daily choices to align reality with your vision. Entrepreneurs who adopt such disciplines and lead their teams by example go beyond simply being their own boss; they build sustainable profitability and business equity.
Richard Steven is president of Fulcra Consulting, which advises remodeling companies on management plans; www.fulcraconsulting.com.
