Margins: Muscle Up Your Margins

12/25/24 • 36 min

Margins are the backbone of a profitable business, but are you managing yours effectively?

And what comes to mind when you think about breaking even – yay or nay?

In this episode, Kenny Chapman and Chris Crew dive into essential strategies for muscling up your margins.

From understanding gross margin dollars per hour to setting the right prices for your services, and all the way to the steps needed to go into hyperprofit mode...these actionable insights will help you boost profitability and avoid common pitfalls!

Chris Crew brings up Under Armour and introduces the importance of visualization in business into the conversation.
Kenny and Chris make the example of exercising and how approaching that the right way is how one should look at “muscling up” margins in business.
Being driven in your business is key – but you need to make taking care of yourself one of your, if not THE, top priorities.
Chris explains how profitability is 100% boiled down to gross margin dollars per hour...but he also emphasizes that there’s a challenge with it.
Incorrect pricing is one of the main reasons why businesses fail – to avoid that trap, there’s an important question home service business owners should ask themselves.
The second reason why businesses fail is the inability to get clients willing to pay the price they’re actually asking for.
Chris believes that your close rate on the phone and in the field is a multiplier or a divider of your marketing dollars.
Chris breaks down the minimum billable hour formula, something you can use even if you’re running a start-up.
Working on picking the right price? “Your technicians and sales people have to buy the price first”, says Kenny.
Chris and Kenny talk about the importance of focusing on your break-even point and its relation to being in hyperprofit mode.
Kenny explains how a $100M company operates incredibly similarly to a $2M company.
When it comes to wanting to be in hyperprofit mode, it’s important to keep in mind that, if not approached correctly, the strategy could backfire big time.

Mentioned in This Episode:

HomeServiceBusinessSuccessShow.com/7

The Blue Collar Success Group

HSBS episode 6 - HomeServiceBusinessSuccessShow.com/6

Margins are the backbone of a profitable business, but are you managing yours effectively?

And what comes to mind when you think about breaking even – yay or nay?

In this episode, Kenny Chapman and Chris Crew dive into essential strategies for muscling up your margins.

Chris Crew brings up Under Armour and introduces the importance of visualization in business into the conversation.
Kenny and Chris make the example of exercising and how approaching that the right way is how one should look at “muscling up” margins in business.
Being driven in your business is key – but you need to make taking care of yourself one of your, if not THE, top priorities.
Chris explains how profitability is 100% boiled down to gross margin dollars per hour...but he also emphasizes that there’s a challenge with it.
Incorrect pricing is one of the main reasons why businesses fail – to avoid that trap, there’s an important question home service business owners should ask themselves.
The second reason why businesses fail is the inability to get clients willing to pay the price they’re actually asking for.
Chris believes that your close rate on the phone and in the field is a multiplier or a divider of your marketing dollars.
Chris breaks down the minimum billable hour formula, something you can use even if you’re running a start-up.
Working on picking the right price? “Your technicians and sales people have to buy the price first”, says Kenny.
Chris and Kenny talk about the importance of focusing on your break-even point and its relation to being in hyperprofit mode.
Kenny explains how a $100M company operates incredibly similarly to a $2M company.
When it comes to wanting to be in hyperprofit mode, it’s important to keep in mind that, if not approached correctly, the strategy could backfire big time.

Mentioned in This Episode:

HomeServiceBusinessSuccessShow.com/7

The Blue Collar Success Group

HSBS episode 6 - HomeServiceBusinessSuccessShow.com/6

Previous Episode

Margins: Profit Suckers

When it comes to profit, most home service business owners seem to be asking the wrong questions and focusing on the wrong things...

...and that can have COSTLY consequences.

In this episode, Kenny Chapman and Chris Crew look at the critical aspects of profitability and operational efficiency. They challenge traditional thinking about business margins and touch upon the most common “profit suckers” many business owners completely overlook.

And to help you protect your profit margins, you’ll hear a couple of real-life examples too!

Chris Crew shares a story that relates to wanting to drive profitability into a business – there’s some other stuff going on and you have to be aware.
Kenny Chapman touches upon a couple of examples of so-called “profit-suckers.”
The real question shouldn’t be “What kind of margin are you running?,” rather “What do you account for direct cost in your business?,” says Chris.
Chris and Kenny discuss the things that can start eroding profit margins – starting with gross margin.
Never forget: when you know who you are, you’ll know what to do.
Chris believes that the very first thing anyone should do when they want to strengthen profit margins is to first look at gross margin.
Did you know that in most services businesses, 50% of the revenue is in field labor, office labor, overhead labor, material and equipment?
Chris explains why he believes that the process in your business should NOT be built around people.
Chris and Kenny talk about operational inefficiencies, AA, “closing the loop”, and how Chris built his business off of other people’s money by leveraging his relationships.
“We defend what we know because uncertainty is so scary,” says Kenny – don’t fall victim to this!
Chris and Kenny share an example of how much operational inefficiency can start to eat up your profit margin.

Mentioned in This Episode:

HomeServiceBusinessSuccessShow.com/6

The Blue Collar Success Group

Frank Blau

HSBS episode 5 - HomeServiceBusinessSuccessShow.com/5

HSBS episode 1 - HomeServiceBusinessSuccessShow.com/1

Next Episode

Cashflow: Why Cash is NOT King

How many times have you heard the saying “cash is king?"

But what if someone told you that that’s just a myth ready to be debunked?

In this episode, Kenny Chapman and Chris Crew tackle the myths surrounding cash flow and discuss cash confidence, creating a 90-day cash buffer, having an abundance mindset, and explain why “cash is NOT king.”

Tune in to learn how to keep your business thriving no matter the economic climate.

In today’s episode co-hosts Kenny Chapman and Chris Crew talk about cash flow and why cash ISN’T king.
Kenny touches upon the shift that’s currently taking place in the blue collar trade.
Chris shares what “cash is king” meant to him in the 1990s – and explains why POSITIVE cash flow is king.
Kenny brings up the concept of cash confidence, the confidence in your ability to generate the cash that you need.
Chris doesn’t believe that knowledge is power...it needs to be turned into action.
Remember: truth is knowledge but wisdom is the application of knowledge.
If you’re saying “my business is debt-free!”, there’s something you’re forgetting.
Kenny opens up about what a friend from the financial planning space told him about being afraid to “party with his cash.”
Not being able to manage cash is something Chris sees as a cause of many blue collar businesses going belly up.
Following Chris’ 90-day cash “buffer” is an advice that saved one of the Blue Collar Success Group’s clients from having his business being forced to close its doors.
Are you looking for a way to take cash and let it still be working for you without it being tied up? Look at money markets!
Chris invites you to avoid having such a scarcity mindset that you end up sitting on cash all the time.
Unlocking an abundance mindset will become a game-changing move for every home service business owner.
Kenny takes back the curtain on what the “best operator” he had ever met told him.