6.Tony – Uncovering the Weak Link in His Business to Fix!
“How did you get on with your numbers?” Steve asked as he settled into the chair across from Tony, pulling his cup of coffee closer. The tempting aroma of the chocolate biscuits lingered in the air as Steve placed them in the middle of the table.
“Hard,” Tony replied, the weight of frustration evident in his voice. “I find it tough—some months, I have customers, but others, I have none. Is that normal?”
“Absolutely, and it doesn’t surprise me at all,” Steve reassured him. “I wanted to see how you’d handle the request. Top marks, Tony—you’ve done well.”
Tony felt a brief glow of satisfaction warm his chest, but doubt still clouded his mind. He couldn’t yet see how achieving a 61% profit increase was even remotely possible. Curiosity and scepticism mingled as he waited to see what Steve had up his sleeve.
“Steve, before we go any further, can Jayne join us, please? She’s eager to see how you’re going to manage this 61% profit increase thing.”
“Brilliant idea,” Steve said with a grin. “Though I have to ask—will she be sharing the chocolate biscuits with us?” Both men chuckled, and Tony called out for Jayne to join them.
“Hello, Jayne, it’s great to meet you, and I’m really glad you could join us,” Steve said warmly as she entered the room.
“I heard that cheeky comment about the biscuits, Steve, and for that, I’m claiming two!” Jayne responded playfully, sparking laughter from all three of them.
With the light mood set, Tony handed over the paper where he had meticulously written down his numbers for Steve to review. Steve scanned the figures, then sat back and said, “This, Tony, is how the ‘Profit Chain’ works.”
- Take how many prospect leads you have each month and your prospect conversion rate. Multiply these 2 together, and this gives you the number of people (customers) you have. See it is coloured red, because this is a result rather than an input.”
- “Then take the average spend for your people (customers) and multiply that with the average number of purchases they make, and multiply the number of people you have and these 3 give you your proceeds (you’ll know this as revenue or turnover) Notice this is in red as well because, again, this is a result rather than an input.”
- “Now take your proceeds and multiply this with your profit margin and this will give you profit. Again this is in red as well because this also is a result rather than an input.”
“Now, let’s input your numbers and see what we’ve got,” Steve said, typing the figures into the formula:
“Wow,” Tony muttered, staring at the bleak profit figure. “No wonder I’ve been struggling. I had no idea it was this bad! My accountant has never shown me this.”
Steve smiled knowingly. “We can pinpoint the weakest links in your business from this ‘Profit Chain’—your Prospect Conversion Rate and your Profit Margin. These are the two critical areas we need to tackle immediately.”
“But before we dive into that,” Steve continued, “let’s imagine you could increase all of these areas by just 10%. Let’s see what happens then.”
10% INCREASE
“There you go,” Steve said with satisfaction. “Your revenue has jumped by 46%, and your profit has soared by an incredible 61%—and that’s before we’ve even worked on fixing your Prospect Conversion Rate and Profit Margin.”
“Steve, this is unreal!” Jayne exclaimed, her scepticism melting away. “I didn’t believe it at first, but this… this is just… incredible!”
Tony nodded, still processing the numbers. “But Steve, I’m not sure I can increase every single one of those five areas by 10%. It just doesn’t feel feasible.”
“You’re absolutely right,” Steve said with a nod. “We’ll customize it for your business. But that’s for next week. Right now, I want you to do some homework.”
“For this week, I want you and Jayne to sit down—preferably over a quiet dinner without the kids—and go through your numbers in detail. Fine-tune them to be as accurate as possible. With that, Steve stood up from the table, leaving Tony and Jayne staring at the numbers, still in disbelief. As Steve walked out the door, he glanced over his shoulder and smiled, knowing that the coming week would bring some animated discussions in Tony’s household.
(Now, I want you to do the same. Calculate your numbers on a weekly, monthly, or quarterly basis. Monthly is ideal so you can make quick adjustments if things aren’t going as planned.)
Success in the construction industry isn’t just about working harder; it’s about working smarter. The road ahead may be challenging, but with the right mindset, a creative approach, and a well-defined strategy, it’s a journey that leads to incredible rewards.
If you recognize yourself in Tony’s story and are ready to transform your business—whether it’s tightening operations, reducing costs, or optimizing project timelines—let’s talk. Book a call with me today, and let’s see how I can help you create a more efficient and profitable future for your construction business.
Contact me:
- Email: petersokeeffe@gmail.com
- Phone: +44 7468 339 450
Together, we can identify your weak links and build a business that not only survives—but thrives for years to come.
P.S. If you have missed the previous 5 parts of Tony’s story then you can find them in the features section of my LinkedIn profile https://www.linkedin.com/feed/
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7 Step Roadmap for Construction business owners
