1 00:00:01,020 --> 00:00:04,410 Learn how to build a better sign and print shop from a few 2 00:00:04,410 --> 00:00:09,060 crusty sign guys who've made more mistakes than they care to admit. 3 00:00:09,720 --> 00:00:14,250 Conversations and advice on pricing, sales, marketing, 4 00:00:14,490 --> 00:00:17,100 workflow, growth, and more. 5 00:00:18,090 --> 00:00:24,240 Your listening to The Better Sign Shop podcast with your hosts, Peter Unis, 6 00:00:24,690 --> 00:00:27,570 Michael O'Reilly and Bryant Gillespie. 7 00:00:31,185 --> 00:00:31,905 All right. 8 00:00:31,965 --> 00:00:36,015 Welcome back to another episode of the Better Sign Shop podcast. 9 00:00:36,405 --> 00:00:43,695 This is part two in a series on the 10 Sign Shop Commandments. 10 00:00:44,055 --> 00:00:45,735 Yeah, we'll call it like a miniseries. 11 00:00:46,275 --> 00:00:47,445 Call it like a mini series 12 00:00:48,015 --> 00:00:50,235 two part episode. 13 00:00:50,595 --> 00:00:53,085 As always the sign Chopta. 14 00:00:53,985 --> 00:00:54,405 God man. 15 00:00:54,405 --> 00:00:55,725 I still love that nickname like. 16 00:00:56,640 --> 00:00:57,180 Five years later. 17 00:00:57,180 --> 00:00:58,020 Four years later. 18 00:00:58,410 --> 00:00:58,800 Yeah. 19 00:00:59,130 --> 00:00:59,370 Yeah. 20 00:00:59,460 --> 00:01:00,660 I appreciate you giving it to me. 21 00:01:00,900 --> 00:01:01,080 It 22 00:01:01,080 --> 00:01:01,560 stuck. 23 00:01:02,100 --> 00:01:02,610 It stuck. 24 00:01:02,610 --> 00:01:02,670 Yeah. 25 00:01:03,240 --> 00:01:06,150 Do clients call you Yoda when you're on coaching calls and Not 26 00:01:06,150 --> 00:01:06,810 necessarily. 27 00:01:06,840 --> 00:01:10,860 Not necessarily, but I do have it as like one of the packages on my website. 28 00:01:10,860 --> 00:01:13,920 So when you go to sign shop consulting and you go to the pricing options, it 29 00:01:13,920 --> 00:01:16,080 says like, meet the sign, shop Yoda. 30 00:01:16,350 --> 00:01:17,310 And I'm like, oh. 31 00:01:18,434 --> 00:01:19,485 That sounds pretty cool. 32 00:01:20,654 --> 00:01:21,554 But I don't show up. 33 00:01:21,554 --> 00:01:23,714 I don't show up in my Yoda ears anymore. 34 00:01:23,774 --> 00:01:24,884 Uh, kind of, uh, 35 00:01:25,425 --> 00:01:26,294 those a one and done. 36 00:01:26,294 --> 00:01:26,565 Yeah, 37 00:01:27,285 --> 00:01:30,345 I'm kind of, uh, letting my kids play with them nowadays. 38 00:01:31,785 --> 00:01:31,875 Yeah. 39 00:01:31,875 --> 00:01:32,354 That's all right. 40 00:01:33,884 --> 00:01:34,994 All of your kids now. 41 00:01:35,835 --> 00:01:39,705 Congratulations again, by the way, on the twins and the growing family. 42 00:01:40,425 --> 00:01:40,995 Thank you, my man. 43 00:01:41,205 --> 00:01:41,535 Thank you. 44 00:01:41,535 --> 00:01:41,865 Yeah. 45 00:01:41,955 --> 00:01:43,935 Uh, did you get that minivan? 46 00:01:44,330 --> 00:01:46,875 Did, did you get that minivan recommendation that I sent you? 47 00:01:47,235 --> 00:01:47,955 I did get it. 48 00:01:47,985 --> 00:01:49,245 Uh, I did I buy it? 49 00:01:49,245 --> 00:01:49,965 No, I did not. 50 00:01:50,025 --> 00:01:50,865 I did not buy it. 51 00:01:50,895 --> 00:01:57,135 Um, I, but I have to tell you, I, I, I, my wife is completely against mini vents. 52 00:01:57,435 --> 00:01:57,465 Okay. 53 00:01:58,545 --> 00:02:05,505 We recently just bought a Yukon xl, an O, like an A used Yukon xl. 54 00:02:06,255 --> 00:02:06,315 Yeah. 55 00:02:06,315 --> 00:02:09,255 The third row, we put our ki our boys in the back. 56 00:02:09,255 --> 00:02:13,005 The girls get their own little captain seats, and in theory, 57 00:02:13,425 --> 00:02:15,645 the vehicle is big enough. 58 00:02:16,665 --> 00:02:18,405 I say in theory because. 59 00:02:19,605 --> 00:02:24,315 My fat ass can't get in the back to buckle my kids into the, into the car seats. 60 00:02:26,595 --> 00:02:26,984 I love it. 61 00:02:27,315 --> 00:02:30,525 And I'm like, if this is the biggest truck on the market right now with a 62 00:02:30,525 --> 00:02:32,685 third row and a trunk, I'm screwed. 63 00:02:33,015 --> 00:02:37,065 I am absolutely screwed because my, my 4-year-old and my 2-year-old sitting in 64 00:02:37,065 --> 00:02:41,475 the back in their car seats and I'm like, can you please buckle yourself in because 65 00:02:41,475 --> 00:02:45,375 Daddy can't like reach over and do that? 66 00:02:45,495 --> 00:02:46,065 Um. 67 00:02:47,030 --> 00:02:49,370 So I'm struggling with it right now. 68 00:02:49,370 --> 00:02:50,870 My wife loves this truck. 69 00:02:52,375 --> 00:02:53,030 Iise, it, it does get a 70 00:02:53,030 --> 00:02:58,640 little bit easier when they can buckle themselves, but like until you get to 71 00:02:58,640 --> 00:02:59,900 that point, yeah, it's miserable man. 72 00:03:00,530 --> 00:03:05,420 I been there like they had we not had the minivan would've been a struggle. 73 00:03:06,110 --> 00:03:07,910 Honda Odyssey all the way, baby. 74 00:03:08,750 --> 00:03:10,400 Just give up on your dignity. 75 00:03:10,700 --> 00:03:13,700 Tell your wife to just like, Hey, we're getting a. 76 00:03:16,695 --> 00:03:18,915 You know, because my wife is the same way, dude. 77 00:03:18,915 --> 00:03:21,465 Like, she did not want to get a minivan. 78 00:03:21,525 --> 00:03:26,385 Like, and she still doesn't necessarily love to drive it because she's always 79 00:03:26,385 --> 00:03:30,644 had cool cars and like, that's the one area where she's like, ah, man, 80 00:03:30,644 --> 00:03:33,644 I, I want to drive a nice, cool car. 81 00:03:34,305 --> 00:03:39,255 Um, and you know, for all the things that she does, she deserves that. 82 00:03:39,435 --> 00:03:43,815 But there's no arguing with the how amazing a minivan is. 83 00:03:44,940 --> 00:03:45,750 You say amazing. 84 00:03:45,810 --> 00:03:50,280 Like I'm actually, I, I didn't say I didn't look at one, so I'm not saying 85 00:03:50,280 --> 00:03:53,550 I didn't look at it and entertain the idea, but the technology in 86 00:03:53,550 --> 00:03:54,900 these things is just, oh my God. 87 00:03:55,290 --> 00:03:55,470 Yeah. 88 00:03:55,650 --> 00:03:56,490 Ridiculous. 89 00:03:56,700 --> 00:04:00,480 I wish I had that, like a push button, turn the seat around, push button, 90 00:04:00,480 --> 00:04:02,370 like the windows and doors open. 91 00:04:02,850 --> 00:04:05,160 I'm like, I have to struggle with my Yukon xl. 92 00:04:05,160 --> 00:04:06,690 I'm like, everything's manual. 93 00:04:06,750 --> 00:04:08,220 Everything's like a lever. 94 00:04:08,220 --> 00:04:10,350 You gotta pull, push whatever. 95 00:04:11,200 --> 00:04:15,400 When you have your hands full, like I'm holding two car seats like this and my 96 00:04:15,400 --> 00:04:19,240 and my kids are jumping in and Oh yeah, by the way, they gotta go in first, right? 97 00:04:19,240 --> 00:04:21,579 Because they're in the back and once you put the car seats in, it's 98 00:04:21,579 --> 00:04:23,860 like you can't squeeze through. 99 00:04:24,220 --> 00:04:25,390 You can't squeeze around. 100 00:04:26,230 --> 00:04:29,620 So I'm kind of living in that world right now where I wish I actually 101 00:04:29,620 --> 00:04:33,790 did have a minivan and my wife is in love with our truck and I despise it. 102 00:04:34,660 --> 00:04:36,790 Um, it's like a rolling tank. 103 00:04:37,545 --> 00:04:39,495 You'll get there one day you'll get there. 104 00:04:39,495 --> 00:04:39,705 Yeah. 105 00:04:40,425 --> 00:04:42,435 Let's, let's jump back into this thing, man. 106 00:04:42,525 --> 00:04:45,405 Uh, do we wanna recap the first five really quickly? 107 00:04:46,215 --> 00:04:48,075 Yeah, yeah, we could, we could, sure. 108 00:04:48,075 --> 00:04:51,645 So this is part two of the 10 Sign Shop Commandments, right? 109 00:04:51,645 --> 00:04:54,735 So we are, if you, if you haven't listened to part one just yet, you 110 00:04:54,735 --> 00:04:56,414 know, hit pause on this episode. 111 00:04:56,594 --> 00:04:57,585 Go listen to part one. 112 00:04:57,585 --> 00:05:00,825 We talked a lot about these Five Commandments, the first five, so 113 00:05:00,825 --> 00:05:02,295 we'll recap them right now, but. 114 00:05:03,690 --> 00:05:04,830 Gross profit margin. 115 00:05:05,460 --> 00:05:06,750 Gross profit margin. 116 00:05:07,110 --> 00:05:07,500 Okay. 117 00:05:07,530 --> 00:05:09,180 Should equal or exceed. 118 00:05:09,180 --> 00:05:10,349 Hopefully you're exceeding it. 119 00:05:10,799 --> 00:05:14,729 60% of your net sales, let's not go be beneath that threshold, okay? 120 00:05:14,729 --> 00:05:15,599 60%. 121 00:05:16,080 --> 00:05:16,890 Let's look at that. 122 00:05:17,369 --> 00:05:17,789 Okay? 123 00:05:18,150 --> 00:05:21,119 Your direct labor, let's look at your p and l here now guys, and let's take 124 00:05:21,119 --> 00:05:24,150 a look at, you know, how much are you paying your direct labor staff? 125 00:05:24,450 --> 00:05:27,359 If you're not sure what the direct labor staff is, go listen to episode 126 00:05:27,359 --> 00:05:30,630 number one and we'll, we, where we talked about it, we brought it up 127 00:05:30,630 --> 00:05:32,039 and we spoke about it at length. 128 00:05:32,130 --> 00:05:35,369 20, should not exceed 20%. 129 00:05:35,885 --> 00:05:38,405 Of your net sales, direct labor should not exceed 20%. 130 00:05:38,405 --> 00:05:39,484 That's commandment number two. 131 00:05:39,484 --> 00:05:43,055 Commandment Number three, your materials, your parts. 132 00:05:43,625 --> 00:05:49,474 You know, your cogs should not exceed 17% of your net sales. 133 00:05:50,675 --> 00:05:50,945 Okay? 134 00:05:51,305 --> 00:05:53,284 Your business expenses commandment. 135 00:05:53,284 --> 00:05:56,015 Number four, your overhead, your business expenses, your operating 136 00:05:56,015 --> 00:05:59,450 expenses, bam, or what, how, whatever you wanna call them, okay? 137 00:06:01,095 --> 00:06:03,705 Should not exceed 48%. 138 00:06:03,705 --> 00:06:04,365 That's your cap. 139 00:06:04,395 --> 00:06:05,685 48% of net sales. 140 00:06:05,685 --> 00:06:09,165 Like let's, we have to break all of that down and penny push to make 141 00:06:09,165 --> 00:06:11,955 sure that that does not exceed 48%. 142 00:06:13,005 --> 00:06:13,155 Yep. 143 00:06:14,745 --> 00:06:18,345 And number five, and we spoke a lot about number five, I can do a whole 144 00:06:18,345 --> 00:06:22,125 episode on number five, maybe a whole series of episodes on number five. 145 00:06:22,815 --> 00:06:25,545 Your advertising budget should not be zero. 146 00:06:26,355 --> 00:06:30,735 Should not be zero, should not be zero, but it does not 147 00:06:30,735 --> 00:06:33,765 exceed 11% of your net sales. 148 00:06:34,485 --> 00:06:34,784 Okay? 149 00:06:34,844 --> 00:06:39,405 So if you're, we, I had a, I had a, a really interesting question 150 00:06:39,405 --> 00:06:40,605 come up from that episode. 151 00:06:41,445 --> 00:06:43,935 I'd like to start here, Brian, if that's okay. 152 00:06:43,935 --> 00:06:46,815 I'm not gonna jump right into number six and, and, and the rest of them. 153 00:06:47,055 --> 00:06:47,085 Okay. 154 00:06:47,085 --> 00:06:47,295 All alright. 155 00:06:47,475 --> 00:06:49,545 We'll just, we had a little bit of a comment. 156 00:06:49,545 --> 00:06:49,965 Let's, 157 00:06:50,325 --> 00:06:50,535 yeah, 158 00:06:50,715 --> 00:06:53,115 we have a little bit of a comment to make here on number five. 159 00:06:53,445 --> 00:06:53,865 Okay. 160 00:06:53,985 --> 00:06:58,395 And I promise it won't take long, but the question was is you're 161 00:06:58,395 --> 00:07:04,275 saying that your advertising budget should not exceed 11% of net sales. 162 00:07:04,455 --> 00:07:04,995 That's true. 163 00:07:05,055 --> 00:07:05,925 That is what I said. 164 00:07:06,645 --> 00:07:09,195 But how do you know what the percentage is? 165 00:07:10,005 --> 00:07:14,594 If you haven't realized those sales yet, right? 166 00:07:14,594 --> 00:07:16,094 So think about that question for a minute. 167 00:07:16,605 --> 00:07:18,615 That's the, that's the, uh, that's the comment. 168 00:07:18,675 --> 00:07:24,015 The comment is, I have to advertise in July to make revenue in July. 169 00:07:25,215 --> 00:07:26,625 True, true. 170 00:07:26,955 --> 00:07:30,795 You can also make revenue in, you know, August, September, and, and, 171 00:07:30,795 --> 00:07:32,205 and every other subsequent month. 172 00:07:32,505 --> 00:07:34,844 But let's just take a look in, in a month, which I think is where 173 00:07:34,844 --> 00:07:37,185 this comment is coming from, is. 174 00:07:39,270 --> 00:07:43,110 How do I know what 11% is if it hasn't been realized in that month? 175 00:07:44,100 --> 00:07:44,310 Yeah. 176 00:07:44,370 --> 00:07:49,560 We spent a thousand bucks on those amazing radio ads that are so effective these 177 00:07:49,560 --> 00:07:53,250 days, and I, how do I tie that back? 178 00:07:54,420 --> 00:07:55,140 How do you tie it back? 179 00:07:55,140 --> 00:07:55,170 I. 180 00:07:56,275 --> 00:07:59,940 I think that's a very interesting comment, and while I don't wanna make 181 00:07:59,940 --> 00:08:05,430 a very long response here, this is why advertising is important because you have 182 00:08:05,430 --> 00:08:08,700 to start at zero somewhere at some point. 183 00:08:09,510 --> 00:08:13,230 If you look at your advertising dollars and you spent $5,000, I'm just gonna 184 00:08:13,230 --> 00:08:16,020 throw a number out there, an arbitrary number out there, and it generated. 185 00:08:17,429 --> 00:08:22,409 $50,000 for you, you're operating at 10%, right? 186 00:08:22,409 --> 00:08:25,919 So you start there and then what does the next month look like? 187 00:08:25,979 --> 00:08:28,169 Do you still have that $5,000 budget? 188 00:08:29,070 --> 00:08:32,699 Are you expected to produce another $50,000 or more? 189 00:08:32,905 --> 00:08:33,025 I. 190 00:08:33,659 --> 00:08:37,740 You start there and you analyze and you make changes accordingly. 191 00:08:37,740 --> 00:08:42,419 Your, your advertising budget is not a set in stone budget. 192 00:08:42,929 --> 00:08:45,360 I think that is what people get confused about. 193 00:08:45,540 --> 00:08:47,550 There's a lot of re there's a lot of vendors out there. 194 00:08:47,550 --> 00:08:52,319 I mentioned a couple on our last episode, and they have monthly retainers. 195 00:08:52,319 --> 00:08:56,100 Like that's just their cost, their cost to manage it, the cost of the ad spend. 196 00:08:56,100 --> 00:08:59,910 You put, you marry them together and there's a, there's a fixed cost to this. 197 00:08:59,910 --> 00:09:00,360 There's a budget. 198 00:09:00,710 --> 00:09:03,530 And maybe you're not doing just one of those things. 199 00:09:03,530 --> 00:09:07,220 Maybe you're doing, maybe you're doing a little bit of SEO, maybe you're doing pay 200 00:09:07,220 --> 00:09:13,490 per click, maybe you're doing BNI, maybe you're doing, you know, ride the wave, 201 00:09:13,490 --> 00:09:15,260 whatever it is, social sponge, whatever. 202 00:09:16,160 --> 00:09:19,970 You're adding all that up and you're getting to a number, and that 203 00:09:19,970 --> 00:09:21,680 number needs to produce revenue. 204 00:09:22,010 --> 00:09:25,760 So your first 90 days is all about. 205 00:09:26,445 --> 00:09:30,195 Experimenting with the budget, experimenting with this ad spend and 206 00:09:30,195 --> 00:09:33,465 the budget and the money that you're spending and seeing what the results are. 207 00:09:33,945 --> 00:09:35,865 So if you're not doing that, you have to start there. 208 00:09:36,195 --> 00:09:39,645 But at a certain point, we talked about this again on episode 209 00:09:39,645 --> 00:09:42,885 number one is forecasting revenue, forecasting lead opportunities, 210 00:09:42,885 --> 00:09:45,045 forecasting this, these data points. 211 00:09:45,075 --> 00:09:49,935 I know that the shop owner that does 4 million knows exactly a 212 00:09:49,935 --> 00:09:52,065 range A, a pretty tight knit range. 213 00:09:52,770 --> 00:09:55,795 Of how many opportunities they're going to have in a month. 214 00:09:56,880 --> 00:09:57,180 Okay. 215 00:09:58,050 --> 00:09:59,700 Uh, not every shop is like that. 216 00:09:59,700 --> 00:10:03,150 I mentioned last episode that one of my $4 million clients doesn't have a 217 00:10:03,150 --> 00:10:06,870 single advertising budget and lives off of referrals, but it's consistent. 218 00:10:07,380 --> 00:10:07,740 Okay? 219 00:10:08,550 --> 00:10:12,390 But if you don't have an advertising budget, you start one, you look at the 220 00:10:12,390 --> 00:10:18,450 results, and you forecast opportunities in revenue after the first 90 days. 221 00:10:18,450 --> 00:10:21,900 Let's just say three months is a good, uh, good measure to see 222 00:10:21,900 --> 00:10:23,070 if something's working or not. 223 00:10:23,985 --> 00:10:24,105 Yeah. 224 00:10:24,135 --> 00:10:27,255 Uh, some people would say that's not a long time to look at. 225 00:10:27,255 --> 00:10:30,135 S-E-O-S-E-O is all farming in a long-term play. 226 00:10:30,795 --> 00:10:34,935 Uh, so I would, and once you start it, you don't really wanna stop it. 227 00:10:35,385 --> 00:10:35,685 Okay. 228 00:10:35,685 --> 00:10:35,775 So I. 229 00:10:37,964 --> 00:10:39,525 SEOs a kind of a different topic. 230 00:10:39,824 --> 00:10:42,704 We'll, we'll, we'll jump off that soapbox a little bit there. 231 00:10:42,975 --> 00:10:43,035 Yeah. 232 00:10:43,035 --> 00:10:43,935 Don't get me started on that one. 233 00:10:44,204 --> 00:10:48,525 So the comment was very interesting, uh, just how do you know what 11% is? 234 00:10:48,584 --> 00:10:50,865 And I thought, yeah, well that's, that is true. 235 00:10:50,895 --> 00:10:52,995 How would you know if you, you've never done it before, 236 00:10:52,995 --> 00:10:54,015 but you gotta start somewhere. 237 00:10:54,525 --> 00:10:55,935 So create a budget. 238 00:10:56,550 --> 00:10:59,520 Say, I'm gonna spend this month, X amount of dollars, and then we're gonna see 239 00:10:59,520 --> 00:11:03,660 how much lead opportunity and revenue it, it drives, and then go from there. 240 00:11:03,959 --> 00:11:07,110 Uh, that, and then, but the, the shop owners that are doing this are 241 00:11:07,110 --> 00:11:10,680 looking at that pretty consistently and saying, I'm on target. 242 00:11:10,680 --> 00:11:12,270 I'm underneath that 11%. 243 00:11:13,230 --> 00:11:13,380 Yeah. 244 00:11:14,160 --> 00:11:14,579 Or not. 245 00:11:14,699 --> 00:11:18,480 Alright, number six, 246 00:11:22,650 --> 00:11:24,015 sign, shop, commandment. 247 00:11:25,035 --> 00:11:25,605 Six. 248 00:11:26,955 --> 00:11:29,205 Earlier in number two, we talked about direct labor. 249 00:11:29,205 --> 00:11:37,065 Now we're talking about total payroll should not exceed 30% of net sales. 250 00:11:39,480 --> 00:11:39,700 Woo. 251 00:11:40,275 --> 00:11:40,965 That's a tough one. 252 00:11:41,475 --> 00:11:42,885 That's a hard one for most people. 253 00:11:43,365 --> 00:11:43,845 Okay. 254 00:11:44,625 --> 00:11:48,225 Um, I'm gonna take a beat and talk a little bit about this. 255 00:11:48,525 --> 00:11:53,925 I feel like I owe it, I feel like I owe it to the audience to explain this one. 256 00:11:54,495 --> 00:11:57,045 I usually see this one expressed in a different way of like, 257 00:11:57,555 --> 00:11:59,325 revenue per employee, but. 258 00:12:00,435 --> 00:12:01,725 Or sales per employee. 259 00:12:01,905 --> 00:12:03,915 There's a lot of formulas out there, Brian. 260 00:12:03,975 --> 00:12:05,325 There's a lot of formulas out there. 261 00:12:05,325 --> 00:12:10,155 Revenue per employee is an, is an EOS metric, okay? 262 00:12:10,155 --> 00:12:13,425 That was created outta the book of traction, and I don't 263 00:12:13,665 --> 00:12:14,835 disagree with that at all. 264 00:12:14,925 --> 00:12:17,475 I, I fully support that metric. 265 00:12:17,775 --> 00:12:20,475 But here's what's very interesting about that metric. 266 00:12:20,655 --> 00:12:23,685 That metric does not show up on a profit and loss statement. 267 00:12:24,285 --> 00:12:24,825 It does not. 268 00:12:24,825 --> 00:12:24,826 Okay. 269 00:12:25,230 --> 00:12:26,070 It does not. 270 00:12:26,460 --> 00:12:26,880 It does not. 271 00:12:26,880 --> 00:12:29,250 There's no chart of account that says revenue per employee. 272 00:12:30,060 --> 00:12:30,870 Uh, no. 273 00:12:31,560 --> 00:12:31,770 Yep. 274 00:12:32,100 --> 00:12:38,040 So when you look at your total payroll, okay, what is total payroll? 275 00:12:39,120 --> 00:12:42,540 You might have subcontractors working for you. 276 00:12:44,190 --> 00:12:46,650 You might have W2 employees working for you. 277 00:12:47,880 --> 00:12:49,320 People that are commission only. 278 00:12:50,055 --> 00:12:54,795 People that require workers' comp, people that require 279 00:12:54,795 --> 00:12:56,265 payroll taxes to be taken out. 280 00:12:56,265 --> 00:13:00,375 If you're in one of those glorious states in the, in the us uh, people 281 00:13:00,375 --> 00:13:02,235 that take, you know, just everything. 282 00:13:02,235 --> 00:13:07,215 If you're contributing to employee benefits like in a 401k or retire 283 00:13:07,245 --> 00:13:09,944 other retirement field, you know, funnels and things like that, 284 00:13:10,635 --> 00:13:12,194 this is all part of the equation. 285 00:13:12,795 --> 00:13:16,814 When you look at your total payroll, I am talking about every cent that 286 00:13:16,814 --> 00:13:18,405 goes towards your labor force. 287 00:13:19,050 --> 00:13:24,660 I am talking about paying Uncle Sam paying into their retirement paying commissions. 288 00:13:25,500 --> 00:13:30,300 Everything should not exceed 30% of net sales. 289 00:13:30,300 --> 00:13:38,760 So that means you sell a hundred dollars, $30 of it is complete labor, where $20 290 00:13:38,760 --> 00:13:44,459 of it was, was the people that were relating to the the, the product sale. 291 00:13:45,225 --> 00:13:45,344 Yep. 292 00:13:45,344 --> 00:13:52,905 So that's the difference is that you have a $10, or in this case a 10% increase 293 00:13:52,905 --> 00:13:56,865 for all of the other fluff, for all of the other items, for all of the other 294 00:13:56,895 --> 00:13:59,175 people that you have on your staff. 295 00:13:59,685 --> 00:14:01,245 And what that essentially means is. 296 00:14:02,835 --> 00:14:03,075 Give it. 297 00:14:03,075 --> 00:14:05,055 Let's put some real numbers behind this. 298 00:14:05,445 --> 00:14:10,575 If you are doing $3 million in revenue, your labor force should 299 00:14:10,575 --> 00:14:15,495 not exceed your total payroll, your labor, your hourly wages, your 300 00:14:15,615 --> 00:14:23,850 commission, your salaried employees yourself should not exceed $900,000. 301 00:14:24,885 --> 00:14:25,845 If you're doing 3 million. 302 00:14:29,550 --> 00:14:34,020 If you're doing 1 million, listen, I think that're total payroll, that's 303 00:14:34,020 --> 00:14:39,780 a, an eyeopening thing when you sit down and stare at it. 304 00:14:39,780 --> 00:14:40,050 Right? 305 00:14:41,880 --> 00:14:43,890 Man, let tell you something about this. 306 00:14:44,610 --> 00:14:47,100 When you're in the day-to-day grind of a sign shop. 307 00:14:47,775 --> 00:14:50,714 When you're in your, okay, so I'm talking about Jason from Idaho. 308 00:14:50,714 --> 00:14:51,224 Here we go. 309 00:14:51,285 --> 00:14:53,685 Here, I'm, we're going back to you, Jason, from last episode. 310 00:14:54,555 --> 00:14:59,954 Jason, I don't know who you are, we've never met, but I'm, I'm sure that you 311 00:14:59,954 --> 00:15:06,074 are involved in your sign shop and you have employees that ask for raises, 312 00:15:07,005 --> 00:15:08,535 employees that are working overtime. 313 00:15:08,535 --> 00:15:16,545 Perhaps, um, you might be asking yourself, man, should I hire another? 314 00:15:17,505 --> 00:15:19,785 Salesperson, should I hire another installer? 315 00:15:19,785 --> 00:15:23,985 Should I hire another INS fabricator production, vinyl production specialist? 316 00:15:24,765 --> 00:15:26,954 Man, should I hire an inbound CSRI? 317 00:15:27,660 --> 00:15:31,170 In every single one of my weekly coaching calls with my clients, 318 00:15:31,410 --> 00:15:33,720 these questions are being asked. 319 00:15:33,720 --> 00:15:37,829 And if they're not being asked of me or asked to me, they're being asked 320 00:15:37,829 --> 00:15:39,569 internally with that sign shop owner. 321 00:15:39,839 --> 00:15:43,650 And I think I'm just trying to lay, create a new workflow. 322 00:15:44,310 --> 00:15:46,290 My designer should not be taking orders. 323 00:15:46,980 --> 00:15:47,670 No, they shouldn't. 324 00:15:48,225 --> 00:15:50,819 Does that mean you need to hire a sale, an order taker? 325 00:15:51,960 --> 00:15:53,100 Maybe, maybe not. 326 00:15:53,520 --> 00:15:59,610 But these questions are asked hundreds of millions of times around the 327 00:15:59,610 --> 00:16:06,930 country multiple times a year, and my advice on all of this is use this 328 00:16:09,180 --> 00:16:14,070 sixth commandment as your measuring. 329 00:16:14,070 --> 00:16:14,460 Stick 330 00:16:15,150 --> 00:16:17,430 the North star as the, 331 00:16:18,480 --> 00:16:20,520 yeah, use this as your guiding light. 332 00:16:22,380 --> 00:16:27,570 You can look at last month's p and l statement, year to date revenue, and 333 00:16:27,570 --> 00:16:32,970 where you're at in payroll to determine if that answer is even possible. 334 00:16:34,380 --> 00:16:38,040 You know, if you have room in your, much, in your budget, because your o 335 00:16:38,100 --> 00:16:45,930 your total payroll is maybe sitting at 24, 23, 20 4%, you have 7%. 336 00:16:47,415 --> 00:16:51,585 Left in that budget, but with the expectation of, and this is where your 337 00:16:51,585 --> 00:16:56,325 comment can comes in, Brian, is how much more revenue is this employee going to 338 00:16:56,325 --> 00:16:58,785 help us make by hiring this employee? 339 00:16:59,625 --> 00:17:05,234 So whether you have one employee or a hundred, the number of 30% 340 00:17:05,234 --> 00:17:09,615 doesn't change because in theory, if you hire another designer. 341 00:17:11,190 --> 00:17:14,909 That designer should be able to produce more output, which means more revenue, 342 00:17:14,909 --> 00:17:22,200 which means the revenue per employee is, which you brought up earlier, is aligned. 343 00:17:22,530 --> 00:17:23,010 Okay? 344 00:17:23,010 --> 00:17:23,280 Sure. 345 00:17:24,000 --> 00:17:28,379 If you're having a log jam and not being able to produce as much work in 346 00:17:28,379 --> 00:17:30,480 a week in a works week because you're. 347 00:17:31,725 --> 00:17:35,415 Always, you know, clogged with larger jobs. 348 00:17:35,415 --> 00:17:38,805 And it's hard to get smaller jobs across the finish line 'cause there's no time. 349 00:17:38,805 --> 00:17:43,125 And you hire another production guy, okay, how much more production 350 00:17:43,125 --> 00:17:44,295 in a week can they produce? 351 00:17:44,295 --> 00:17:46,575 And that's where that formula makes sense. 352 00:17:46,575 --> 00:17:47,835 And I'm a huge believer in it. 353 00:17:48,585 --> 00:17:52,185 But you can't operate that way without knowing what the 354 00:17:52,185 --> 00:17:53,865 total number is in payroll. 355 00:17:53,865 --> 00:17:58,845 Because if you're over 30% and you have these problems, which is very common, you 356 00:17:58,845 --> 00:18:00,435 may not actually have the right people. 357 00:18:01,275 --> 00:18:03,855 You may not have the right people in the right seats. 358 00:18:04,215 --> 00:18:06,045 You may not have them in the right role. 359 00:18:06,045 --> 00:18:07,575 That's what basically what that means. 360 00:18:07,905 --> 00:18:11,415 And you may not be getting the most amount of output out of 361 00:18:11,415 --> 00:18:13,005 a high performing employee. 362 00:18:13,515 --> 00:18:17,895 Maybe a $40 an hour employee is producing the same amount of work that 363 00:18:17,895 --> 00:18:20,145 a $25 an hour employee can produce. 364 00:18:20,150 --> 00:18:23,685 But he's been with you so long, you've given him raises because he's a nice guy. 365 00:18:24,345 --> 00:18:28,455 Well, the day in and age of doing that is over because you now have 366 00:18:28,665 --> 00:18:30,285 commandment number six, which is. 367 00:18:31,139 --> 00:18:35,550 Your total payroll should not exceed 30% of nest sales. 368 00:18:36,300 --> 00:18:39,540 Is that a, was that a, was that a, did I leave anything out that I think, I 369 00:18:39,540 --> 00:18:42,955 think we kind of hit on all of those points there, but I could be wrong. 370 00:18:42,955 --> 00:18:43,075 Yeah. 371 00:18:43,080 --> 00:18:47,010 I mean, to me, like this is a, this is a great metric. 372 00:18:47,190 --> 00:18:50,639 This is a probably of my, of the 10 Commandments. 373 00:18:50,639 --> 00:18:53,370 This is probably right up there in my top two or three. 374 00:18:54,284 --> 00:18:59,385 My, my absolute favorite is the advertising one because I, I, I, I 375 00:18:59,385 --> 00:19:00,855 go to bat with that all day long. 376 00:19:01,365 --> 00:19:04,064 Uh, but yeah, you know, labor is a, is number two. 377 00:19:04,064 --> 00:19:05,655 It's probably number two for me for sure. 378 00:19:05,745 --> 00:19:09,584 Um, you know, it's talking about total payroll and not necessarily just 379 00:19:09,584 --> 00:19:14,024 direct labor because it's so easy to look at total payroll and say, okay, 380 00:19:14,655 --> 00:19:18,465 but how much of that is directly towards completing a project and. 381 00:19:19,110 --> 00:19:21,120 That's why that there's two KPIs here. 382 00:19:21,120 --> 00:19:26,370 That's why that there's two commandments that you want to really just look at 383 00:19:26,370 --> 00:19:30,240 individually because you might have a great designer and he's putting out great 384 00:19:30,240 --> 00:19:33,929 work and you know he is on a salary, okay? 385 00:19:33,929 --> 00:19:35,820 And he's making those direct labor numbers. 386 00:19:35,820 --> 00:19:38,100 But maybe your total payroll number is off. 387 00:19:39,375 --> 00:19:42,975 Maybe it's higher than 30% and it has, but it has, that's an easy way of 388 00:19:42,975 --> 00:19:47,445 looking at this and saying, it's not really related to my direct labor staff, 389 00:19:47,445 --> 00:19:49,845 because that's, that's at or under 20%. 390 00:19:50,385 --> 00:19:53,475 So it might be coming from maybe you are taking too much money or 391 00:19:53,475 --> 00:19:56,805 maybe your general manager's making too much money, or maybe there's 392 00:19:57,225 --> 00:20:00,645 something being spent more in the, uh, support labor side that it shouldn't 393 00:20:00,645 --> 00:20:04,485 be, and maybe you can cut back and reallocate some dollars elsewhere. 394 00:20:05,310 --> 00:20:12,389 Or we're not pricing high enough, or we're not advertising or making enough sales. 395 00:20:13,320 --> 00:20:18,929 Yeah, that's the other side of that coin that really we just, damn, damn 396 00:20:18,929 --> 00:20:20,580 it, damn it for bringing it up, Brian. 397 00:20:20,699 --> 00:20:21,149 That damn it. 398 00:20:21,149 --> 00:20:21,300 That'll 399 00:20:21,300 --> 00:20:25,409 be, that'll be the next mini series that we have to do. 400 00:20:25,889 --> 00:20:26,310 Right? 401 00:20:26,760 --> 00:20:30,645 Because when you're looking at all of these commandments. 402 00:20:31,635 --> 00:20:38,235 You're saying 30% of net sales or 60% of net sales, whatever the KPI is, net 403 00:20:38,235 --> 00:20:41,504 sales is an inval, uh, what's the word? 404 00:20:42,195 --> 00:20:43,185 It's a variable. 405 00:20:43,950 --> 00:20:44,264 Variable, okay. 406 00:20:44,625 --> 00:20:45,855 It's the, it's a variable. 407 00:20:46,274 --> 00:20:51,735 Meaning did you sell that project for a thousand dollars or $1,200? 408 00:20:52,995 --> 00:20:57,284 'cause if you have the same labor and the same cost of materials 409 00:20:57,615 --> 00:20:59,385 and the same marketing dollars. 410 00:21:00,435 --> 00:21:06,165 That percentage changes based off of what you sold that project for, right? 411 00:21:06,165 --> 00:21:06,615 A hundred percent. 412 00:21:07,304 --> 00:21:11,865 So the other way to look at all of these commandments so far is to 413 00:21:11,865 --> 00:21:16,155 also look at your pricing, which we're not here to discuss pricing. 414 00:21:16,680 --> 00:21:17,010 Okay. 415 00:21:17,220 --> 00:21:22,020 We're here to discuss what are the KPIs of your business, of your profit and loss. 416 00:21:23,040 --> 00:21:25,320 Perhaps the way to fix it all is to raise your pricing. 417 00:21:25,530 --> 00:21:26,580 I'm not saying that it isn't. 418 00:21:27,000 --> 00:21:27,300 Okay. 419 00:21:27,480 --> 00:21:30,480 Perhaps I haven't looked at your pa profit and loss to know, 420 00:21:31,020 --> 00:21:34,410 which leads us into commandment. 421 00:21:34,410 --> 00:21:35,910 Okay, number seven. 422 00:21:38,520 --> 00:21:39,300 Good segue. 423 00:21:39,390 --> 00:21:40,200 Good segue. 424 00:21:40,200 --> 00:21:40,770 Love it. 425 00:21:41,790 --> 00:21:44,580 Your average invoice. 426 00:21:46,800 --> 00:21:51,660 Should equal or exceed $600. 427 00:21:52,950 --> 00:21:57,120 So we're kind of getting into a little bit of the pricing world here, right? 428 00:21:57,960 --> 00:22:02,250 If you start looking at how many orders you produced, you 429 00:22:02,250 --> 00:22:03,750 know, and, and I gotta say. 430 00:22:04,169 --> 00:22:06,810 This is still subjective here. 431 00:22:06,870 --> 00:22:08,730 So I wanna say this with an asterisk. 432 00:22:09,000 --> 00:22:13,350 This is put together for a shop that also is a vinyl shop. 433 00:22:14,370 --> 00:22:14,669 Okay? 434 00:22:15,600 --> 00:22:19,770 So this is not a fa uh, we're not talking about an exclusively like a fab shop. 435 00:22:20,520 --> 00:22:24,840 Somebody that's like building channel letters all day long, or awnings, or, 436 00:22:24,899 --> 00:22:25,230 yeah, 437 00:22:25,500 --> 00:22:26,495 vehicle wraps all day long. 438 00:22:26,875 --> 00:22:27,695 You know, we're talking about. 439 00:22:28,665 --> 00:22:32,175 Yeah, if you're at $600 there, you're, you're hurting. 440 00:22:32,804 --> 00:22:33,314 Correct. 441 00:22:33,614 --> 00:22:36,915 We're talking about your average run in the middle shop that does both 442 00:22:36,915 --> 00:22:39,314 vinyl and a little bit of fab and. 443 00:22:40,965 --> 00:22:43,725 Ultimately, you know, you're not turning, you're not turning down 444 00:22:43,725 --> 00:22:47,385 DOT letters, you know, you're not turning down those window graphics, 445 00:22:47,385 --> 00:22:49,365 the door graphics or the neighborhood 446 00:22:49,905 --> 00:22:50,534 sign shop. 447 00:22:51,105 --> 00:22:52,575 Exactly, exactly. 448 00:22:52,575 --> 00:22:55,695 So we're, we're really speaking to that type of shop. 449 00:22:56,565 --> 00:22:57,915 Your average invoice. 450 00:22:58,155 --> 00:23:01,875 Should equal or exceed your $600 mark. 451 00:23:01,935 --> 00:23:03,705 Now, what is an invoice? 452 00:23:04,574 --> 00:23:08,445 I have to start there because there seems to be some confusion of what? 453 00:23:09,165 --> 00:23:09,524 Yep. 454 00:23:09,524 --> 00:23:09,794 You get it? 455 00:23:09,794 --> 00:23:10,034 Yep. 456 00:23:10,544 --> 00:23:15,014 Yeah, because I'm not saying quote, I'm not saying order. 457 00:23:15,675 --> 00:23:16,665 I'm saying invoice. 458 00:23:16,695 --> 00:23:16,725 Okay. 459 00:23:18,794 --> 00:23:19,905 I didn't say your average quote. 460 00:23:20,324 --> 00:23:22,995 I didn't say your average order said your average invoice. 461 00:23:23,534 --> 00:23:24,405 That means. 462 00:23:25,125 --> 00:23:26,535 Done and paid. 463 00:23:27,255 --> 00:23:27,885 Done. 464 00:23:28,815 --> 00:23:29,655 Completed 465 00:23:33,495 --> 00:23:34,335 and paid. 466 00:23:34,605 --> 00:23:35,025 Okay? 467 00:23:35,565 --> 00:23:35,925 Okay. 468 00:23:37,845 --> 00:23:39,255 That's what an invoice is. 469 00:23:40,125 --> 00:23:44,895 Your average completed job should equal or exceed $600. 470 00:23:45,750 --> 00:23:49,050 You know, so when you think about like, a customer could walk in and 471 00:23:49,050 --> 00:23:53,820 buy a banner or a couple of a-frame signs, or maybe it's a real estate 472 00:23:53,820 --> 00:23:55,560 office that's buying some lawn signs. 473 00:23:56,010 --> 00:23:58,140 Our shop minimum is a hundred dollars. 474 00:23:58,590 --> 00:23:59,010 Sure. 475 00:23:59,460 --> 00:24:01,080 The shop minimums a hundred dollars. 476 00:24:01,080 --> 00:24:04,860 Those, those types of conversations need to go outside the, you know, throw, 477 00:24:04,890 --> 00:24:06,480 toss that conversation out the window. 478 00:24:06,720 --> 00:24:06,990 Okay. 479 00:24:07,560 --> 00:24:08,190 We need to. 480 00:24:09,495 --> 00:24:13,455 Focus on $600 or more in order to be profitable. 481 00:24:13,815 --> 00:24:14,145 Okay? 482 00:24:14,835 --> 00:24:18,375 If our invoices and shop, Fox and Corbridge, and every other basic 483 00:24:18,375 --> 00:24:22,065 POS system will tell you this, how many invoices have you done? 484 00:24:22,065 --> 00:24:26,685 What's the total make the simple division, and you have your total average invoice. 485 00:24:27,345 --> 00:24:29,265 Here's a very interesting point to that. 486 00:24:29,895 --> 00:24:33,645 I said it should equal or exceed $600. 487 00:24:34,155 --> 00:24:37,575 Most shops are exceeding $600. 488 00:24:38,640 --> 00:24:41,970 So I have to say that with a giant asterisk, if you're in this world 489 00:24:41,970 --> 00:24:45,900 of sign shops, you're, you're kind of living in around the seven, $800 490 00:24:45,900 --> 00:24:47,550 world for your average invoice. 491 00:24:48,000 --> 00:24:53,130 So if you see your average invoice in the five hundreds, maybe in the 492 00:24:53,130 --> 00:24:57,360 six hundreds, you're not necessarily, you're still in a critical mode. 493 00:24:57,570 --> 00:25:01,890 You're still in an area of which it is important for you 494 00:25:01,890 --> 00:25:04,590 to, to increase that number. 495 00:25:05,310 --> 00:25:05,550 Yeah. 496 00:25:06,179 --> 00:25:09,270 The way to increase that number again, Brian, take a look at your pricing. 497 00:25:09,360 --> 00:25:11,939 Take a look at your material costs, take a look at your markups, 498 00:25:11,939 --> 00:25:13,439 take a look at your hourly rate. 499 00:25:14,219 --> 00:25:16,110 Make sure that you're charging the right amount. 500 00:25:16,110 --> 00:25:19,919 'cause if you are, and your hourly, which we'll get to here in just a minute, and 501 00:25:19,919 --> 00:25:21,990 your hourly rate should be what it is. 502 00:25:22,409 --> 00:25:25,949 Most projects don't take one hour and most projects take a couple of hours. 503 00:25:25,949 --> 00:25:31,530 So you should be seeing your average invoice go up. 504 00:25:32,370 --> 00:25:32,550 Yeah. 505 00:25:32,790 --> 00:25:33,030 Alright. 506 00:25:33,030 --> 00:25:33,120 It's 507 00:25:33,120 --> 00:25:33,870 low hanging fruit. 508 00:25:33,975 --> 00:25:40,185 Yeah, like if, if you are concerned about raising the price, go watch. 509 00:25:40,215 --> 00:25:41,985 Uh, forget the episode number. 510 00:25:41,985 --> 00:25:43,844 It's with Paul Gardner of Sign Enterprise. 511 00:25:44,534 --> 00:25:47,715 Dude came back after getting some good advice, doubled his pricing. 512 00:25:48,495 --> 00:25:53,774 Did not see any measurable decrease in business, so I was 513 00:25:53,774 --> 00:25:55,544 just gonna, we'll hang that there. 514 00:25:55,800 --> 00:25:56,429 We'll move on 515 00:25:56,850 --> 00:25:57,070 Now. 516 00:25:57,070 --> 00:26:00,794 Earlier we talked about my favorite KPIs and advertising being one, 517 00:26:00,794 --> 00:26:02,504 total payroll being number two. 518 00:26:03,405 --> 00:26:04,935 This is like two A. 519 00:26:05,775 --> 00:26:06,015 Two A. 520 00:26:06,375 --> 00:26:06,645 Okay. 521 00:26:06,645 --> 00:26:07,635 This is like two A. 522 00:26:08,115 --> 00:26:08,355 All right. 523 00:26:08,355 --> 00:26:09,255 You want me to do that thing? 524 00:26:09,345 --> 00:26:09,555 Should I? 525 00:26:09,585 --> 00:26:10,305 Yeah, go ahead, please. 526 00:26:10,305 --> 00:26:10,845 Yes, please. 527 00:26:11,985 --> 00:26:12,375 Okay. 528 00:26:12,585 --> 00:26:15,555 Let's talk about sign shop commandment. 529 00:26:15,555 --> 00:26:19,695 Number eight, lead conversion. 530 00:26:21,375 --> 00:26:24,165 Most people aren't even tracking this, so this is, this might be 531 00:26:24,165 --> 00:26:25,485 like, what does that even mean? 532 00:26:26,024 --> 00:26:33,165 Lead conversion to a quote should equal or exceed 80%. 533 00:26:34,365 --> 00:26:37,004 Okay, let's start with square one here. 534 00:26:37,665 --> 00:26:45,764 If you are not documenting your leads, start doing it today. 535 00:26:46,455 --> 00:26:47,355 They're in my inbox. 536 00:26:47,355 --> 00:26:48,585 Pete, what are you talking about? 537 00:26:49,185 --> 00:26:56,415 If you are getting an email with the questions of how much can you, will you 538 00:26:56,955 --> 00:27:02,145 or I need, that is a lead people, okay? 539 00:27:03,435 --> 00:27:08,595 If you're getting a Facebook message, and some of you do that, some of you 540 00:27:08,595 --> 00:27:11,985 don't, I don't think I ever really did that, but if you're getting a phone call. 541 00:27:13,305 --> 00:27:16,395 If you're getting a walk-in customer, some of you, some of you get walk-in 542 00:27:16,395 --> 00:27:17,295 customers, some of you don't. 543 00:27:18,045 --> 00:27:21,495 If you're getting a walk-in customer, the moment they walk through your 544 00:27:21,495 --> 00:27:24,285 threshold lead, there's a lead. 545 00:27:24,495 --> 00:27:27,495 You paid for that person to walk through your door in your rent 546 00:27:27,495 --> 00:27:30,525 expense, so you better be freaking reporting this information. 547 00:27:30,945 --> 00:27:33,825 An email from a, from a customer, a repeat customer. 548 00:27:34,515 --> 00:27:38,955 It doesn't matter what it's, if you are not documenting this start 549 00:27:38,955 --> 00:27:41,475 today, how do you document it? 550 00:27:41,505 --> 00:27:43,935 Well, it depends on how, what you know, what you wanna do. 551 00:27:44,325 --> 00:27:49,335 If you are using Shop box, take a look at, take a look at the lead function. 552 00:27:49,485 --> 00:27:49,845 Add. 553 00:27:49,845 --> 00:27:50,355 Add a lead. 554 00:27:50,745 --> 00:27:51,165 Simple. 555 00:27:51,855 --> 00:27:55,365 You know, if you're using corbridge, do the same. 556 00:27:56,085 --> 00:27:57,015 Yeah, do the same thing. 557 00:27:58,065 --> 00:27:59,955 If you're not using any of those and you're like one of 558 00:27:59,955 --> 00:28:01,335 those shops that are using like. 559 00:28:02,415 --> 00:28:04,455 QuickBooks and spreadsheets and whatever. 560 00:28:05,385 --> 00:28:07,574 Then you need some form of like intake form. 561 00:28:07,605 --> 00:28:11,294 You need to be able to quantify how many people asked you these? 562 00:28:11,355 --> 00:28:13,695 How much can you, I need questions. 563 00:28:14,054 --> 00:28:14,504 Okay. 564 00:28:14,564 --> 00:28:16,784 Or statements, I guess I need is a statement. 565 00:28:17,264 --> 00:28:20,774 Throw it on a Trello board at the very least, like whatever, like 566 00:28:21,225 --> 00:28:23,324 find some way to like track this. 567 00:28:23,324 --> 00:28:28,155 I mean, obviously like it, there's CRM solutions that are like, handle this. 568 00:28:28,155 --> 00:28:30,014 And that's like for a different day. 569 00:28:30,074 --> 00:28:35,054 Obviously we've got like the, the shop spotlight series going on right 570 00:28:35,054 --> 00:28:36,524 now through the end of the year. 571 00:28:36,945 --> 00:28:37,455 Um. 572 00:28:38,550 --> 00:28:38,730 God. 573 00:28:38,790 --> 00:28:40,649 It's like, yeah, I, I'm with you. 574 00:28:40,860 --> 00:28:44,820 Like, if, if you're not tracking the incoming leads, what are you doing? 575 00:28:45,209 --> 00:28:45,419 What are 576 00:28:45,419 --> 00:28:45,764 you, what 577 00:28:45,770 --> 00:28:45,870 are you 578 00:28:45,870 --> 00:28:46,050 doing? 579 00:28:46,439 --> 00:28:47,100 What are you doing? 580 00:28:47,250 --> 00:28:50,399 You know, you're just quick to say a hundred dollars for that banner. 581 00:28:50,399 --> 00:28:51,090 Like, no. 582 00:28:51,300 --> 00:28:53,340 Where is the consultative nature in this? 583 00:28:53,340 --> 00:28:54,270 Where is the outreach? 584 00:28:54,270 --> 00:28:55,139 Where's the emails? 585 00:28:55,379 --> 00:28:58,320 If you are not getting that name, email address, phone 586 00:28:58,320 --> 00:28:59,879 number loaded into some CRM. 587 00:28:59,879 --> 00:29:04,649 You are so far off from doing what you need to be doing, and I'm sorry 588 00:29:04,649 --> 00:29:07,260 to say it like that, but start. 589 00:29:07,889 --> 00:29:09,600 Start today, okay? 590 00:29:10,230 --> 00:29:14,520 You are not actually succeeding as an owner if you are not doing that. 591 00:29:15,120 --> 00:29:17,100 Now, many of you are, I'm not talking to you. 592 00:29:17,100 --> 00:29:22,980 To those that are quantifying your leads is an incredibly valuable tool that 593 00:29:22,980 --> 00:29:25,560 you need to start doing as a business owner, as a sign shop business owner. 594 00:29:25,980 --> 00:29:30,090 So you get, let's just assume that you are, how many of those 595 00:29:30,090 --> 00:29:32,850 leads are turning into quotes? 596 00:29:33,270 --> 00:29:34,350 That's what that means. 597 00:29:35,159 --> 00:29:37,020 Lead conversion to a quote. 598 00:29:37,455 --> 00:29:39,855 Should equal or exceed 80%. 599 00:29:40,665 --> 00:29:45,675 So let me kind of back up here and just go, if a customer asks you a 600 00:29:45,675 --> 00:29:49,245 simple question, gimme one, give rattle one off here, Brian, let me, let's, 601 00:29:49,275 --> 00:29:50,355 let's role play here a little bit. 602 00:29:51,015 --> 00:29:53,535 I need a birthday banner for my wife. 603 00:29:53,535 --> 00:29:54,675 She's turning 40. 604 00:29:55,335 --> 00:29:55,755 Cool. 605 00:29:56,175 --> 00:29:57,080 How much is that gonna be? 606 00:29:57,740 --> 00:29:59,475 It, let's just assume that that's an email. 607 00:29:59,820 --> 00:30:01,590 Lemme make it really, really simple here. 608 00:30:01,710 --> 00:30:01,770 Yeah. 609 00:30:01,770 --> 00:30:04,110 Let's say you sent, you say, Hey, you came highly recommended. 610 00:30:04,110 --> 00:30:05,430 I have my, what'd you say? 611 00:30:05,430 --> 00:30:06,990 Mother's 40th birthday coming up? 612 00:30:06,995 --> 00:30:07,620 No, no. 613 00:30:07,620 --> 00:30:09,030 Grandmother's, whatever. 614 00:30:09,060 --> 00:30:09,960 My, my wife. 615 00:30:10,139 --> 00:30:11,370 Your wife's Forti birthday. 616 00:30:11,670 --> 00:30:12,030 I don't hear. 617 00:30:16,530 --> 00:30:17,730 Yeah, that would be pretty possible. 618 00:30:18,000 --> 00:30:18,330 Hey, come on. 619 00:30:18,330 --> 00:30:20,040 This is West Virginia, but Lou, come on. 620 00:30:20,040 --> 00:30:21,030 We have standards here, 621 00:30:21,030 --> 00:30:21,300 bro. 622 00:30:21,690 --> 00:30:21,960 Come on. 623 00:30:22,020 --> 00:30:22,260 Okay. 624 00:30:22,260 --> 00:30:25,920 Your wife's, uh, your wife's birthday coming up and you need a, okay. 625 00:30:25,920 --> 00:30:28,830 So I respond in that email and I say, absolutely. 626 00:30:28,830 --> 00:30:30,030 Happy birthday to your wife. 627 00:30:30,390 --> 00:30:32,130 What size banner are you looking for? 628 00:30:32,760 --> 00:30:34,230 And what would you like it to say? 629 00:30:37,890 --> 00:30:39,660 Then it goes dark, then it goes dark. 630 00:30:40,080 --> 00:30:41,580 You hear nothing but crickets. 631 00:30:41,940 --> 00:30:43,170 You send a follow up email. 632 00:30:43,560 --> 00:30:44,820 Hey Bryant, this is Peter again. 633 00:30:44,910 --> 00:30:45,990 Did you get my last email? 634 00:30:45,990 --> 00:30:48,900 I sent you a couple of questions and I would need to know, uh, 635 00:30:48,930 --> 00:30:50,100 before I can give you a price, 636 00:30:53,940 --> 00:30:54,360 go start. 637 00:30:54,720 --> 00:30:55,441 Nothing, nothing, nothing. 638 00:30:56,070 --> 00:30:59,880 That is a, that is a lead that did not make its way to a conversion. 639 00:31:00,420 --> 00:31:00,720 Okay. 640 00:31:01,770 --> 00:31:03,135 To a quote, conversion to a quote. 641 00:31:03,210 --> 00:31:05,130 I think that's to a quote conversion. 642 00:31:05,130 --> 00:31:06,630 When I first read this one. 643 00:31:07,605 --> 00:31:11,460 We, we will talk about the other conversion metric in Yeah. 644 00:31:11,465 --> 00:31:12,468 Down the pipe, but down the pipe. 645 00:31:12,840 --> 00:31:16,350 This is like, hey, lead comes in, does this make it to a 646 00:31:16,350 --> 00:31:18,510 quote that we can then track? 647 00:31:19,290 --> 00:31:19,620 Correct. 648 00:31:20,220 --> 00:31:21,990 So you would get somebody to ask you. 649 00:31:22,020 --> 00:31:23,520 You, you would think that like that. 650 00:31:24,120 --> 00:31:27,600 Bryant's a great customer, you know, but by, you know, he might be like, 651 00:31:27,600 --> 00:31:28,530 I don't know what I want to say. 652 00:31:28,560 --> 00:31:31,320 I don't actually know how big, so I need time to actually think about that, 653 00:31:31,320 --> 00:31:35,129 measure my ceiling in my living room, whatever, and figure out a sign size. 654 00:31:35,550 --> 00:31:40,230 But at the end of the day, Bryant might also go on Vistaprint and order it 655 00:31:40,230 --> 00:31:42,270 himself, go to Staples and get it himself. 656 00:31:42,270 --> 00:31:44,430 Or maybe, you know what? 657 00:31:44,879 --> 00:31:49,290 I actually just walked into a random sign shop and they were able to give me 658 00:31:49,290 --> 00:31:50,310 a price, and I just pulled the trigger. 659 00:31:51,070 --> 00:31:53,650 So that could be a lost lead. 660 00:31:54,490 --> 00:32:01,990 So the goal here is to quote 80% or more of the leads that you get in. 661 00:32:01,990 --> 00:32:04,480 You want to, you want to have something trackable. 662 00:32:04,480 --> 00:32:07,060 You wanna be able to say, here's your quote, and then be able to 663 00:32:07,090 --> 00:32:08,230 have something to follow up on. 664 00:32:08,290 --> 00:32:08,590 Right? 665 00:32:09,010 --> 00:32:12,430 So eight out of every 10 is what I'm trying to say, is the minimum 666 00:32:12,910 --> 00:32:16,120 you're going, if you're quoting six outta 10, you are screwed here. 667 00:32:16,560 --> 00:32:16,770 Okay. 668 00:32:16,770 --> 00:32:18,960 You're not doing yourself any good, any good service. 669 00:32:19,350 --> 00:32:22,500 So eight or better if you're, I have shops that are going 670 00:32:22,500 --> 00:32:24,060 10 for 10, a hundred percent. 671 00:32:24,930 --> 00:32:26,250 Every lead is getting a quote comes through 672 00:32:26,250 --> 00:32:27,540 the door quoting. 673 00:32:27,930 --> 00:32:28,110 Nice. 674 00:32:28,110 --> 00:32:28,320 Yeah. 675 00:32:28,380 --> 00:32:29,760 This is, that's a gold standard. 676 00:32:29,940 --> 00:32:34,200 And now like the, I, I think like the questions that I have here, and I love 677 00:32:34,200 --> 00:32:37,590 that this is on here because it's, to me, it's indicative of, it could be 678 00:32:37,590 --> 00:32:41,430 indicative of a couple of like problems that you've either got like in your 679 00:32:41,430 --> 00:32:45,870 sales funnel or your communication or you know, just a lack of systems, but. 680 00:32:46,500 --> 00:32:50,670 Um, like lead conversion to quotes. 681 00:32:52,200 --> 00:32:57,840 This one, I, I don't know, like if shop box is tracking this for you, or some of 682 00:32:57,840 --> 00:32:59,430 these other systems are tracking mm-hmm. 683 00:32:59,580 --> 00:33:00,030 Like. 684 00:33:02,070 --> 00:33:02,970 Ah, man. 685 00:33:03,000 --> 00:33:05,550 Like this is a, this is a good one. 686 00:33:05,610 --> 00:33:08,010 I lost my train of thought there for a second, so it's all 687 00:33:08,010 --> 00:33:08,220 right. 688 00:33:08,430 --> 00:33:08,910 That's all right. 689 00:33:09,000 --> 00:33:09,930 We're gonna get to the nick. 690 00:33:09,990 --> 00:33:12,750 We're gonna get into the, the nitty gritty here in just a minute, 691 00:33:13,320 --> 00:33:18,030 but the goal here, track your leads to quotes, conversion rate. 692 00:33:18,420 --> 00:33:18,750 Okay. 693 00:33:19,170 --> 00:33:23,850 If you're not doing anything, like shop box, whatever, do a Google form. 694 00:33:23,850 --> 00:33:25,379 It's free and. 695 00:33:26,685 --> 00:33:30,105 Google keep track of how you know how many and how many you converted. 696 00:33:31,365 --> 00:33:32,115 Very simple stuff. 697 00:33:32,775 --> 00:33:33,585 80% or better. 698 00:33:33,915 --> 00:33:34,665 Number nine. 699 00:33:35,235 --> 00:33:35,685 Getting there. 700 00:33:35,715 --> 00:33:36,945 We're getting there towards the finish line. 701 00:33:37,815 --> 00:33:42,465 So let me preface number, uh, sign shop commandment number nine here By 702 00:33:42,465 --> 00:33:50,715 saying this, most of you are starting to figure out what this number is. 703 00:33:52,409 --> 00:33:53,760 You're not naive anymore. 704 00:33:53,790 --> 00:33:55,110 You're not green to it. 705 00:33:55,350 --> 00:33:57,840 You're not making up numbers outta nowhere anymore. 706 00:33:58,530 --> 00:34:00,270 We have talked a lot about this. 707 00:34:00,480 --> 00:34:05,159 We have done shop classes, mastermind classes on this. 708 00:34:05,639 --> 00:34:11,159 Every single one of my coaching clients starts by filling out this tool. 709 00:34:11,820 --> 00:34:17,159 You need to know what your hourly billable production rate is. 710 00:34:19,210 --> 00:34:20,070 Dun, dun, dun. 711 00:34:20,745 --> 00:34:23,895 And most of you are finally catching up. 712 00:34:24,495 --> 00:34:28,875 All right, so if there is a significant improvement in the industry that I 713 00:34:28,875 --> 00:34:34,215 have seen is that there are a lot more of you that are understanding the 714 00:34:34,215 --> 00:34:38,625 importance of this and are starting to pick up the fact that this is 715 00:34:38,625 --> 00:34:42,645 actually a game of selling hours. 716 00:34:43,275 --> 00:34:45,345 We're not selling signs here, people. 717 00:34:45,990 --> 00:34:50,219 I know how silly that sounds 'cause you are selling signs, but are 718 00:34:50,219 --> 00:34:54,630 you selling your signs profitably with the correct amount of hours? 719 00:34:55,530 --> 00:34:58,020 Are you selling what? 720 00:34:58,080 --> 00:35:00,150 Give it to me dude, you're teasing me. 721 00:35:00,150 --> 00:35:06,000 Like let's, okay, so here it is your hourly billable production rate. 722 00:35:06,090 --> 00:35:10,230 Again, we preface this by saying what type of shop are we talking about here? 723 00:35:10,785 --> 00:35:14,595 Okay, so this is, again, you're a run of the mill neighborhood sign shop, 724 00:35:14,595 --> 00:35:16,755 vinyl shop that does some fabrication. 725 00:35:18,105 --> 00:35:20,745 Less than 2000 square feet around that number. 726 00:35:21,255 --> 00:35:25,760 You know, half a dozen employees, whatever your billable production 727 00:35:25,760 --> 00:35:28,730 rate should meet or exceed. 728 00:35:30,120 --> 00:35:31,830 1 25 per hour. 729 00:35:31,950 --> 00:35:32,250 Yeah. 730 00:35:32,310 --> 00:35:34,980 Some people might be looking at their like hourly rate and 731 00:35:34,980 --> 00:35:36,480 saying, I'm charging one 50. 732 00:35:37,049 --> 00:35:37,650 Good for you. 733 00:35:38,130 --> 00:35:39,509 I still don't know if it's right. 734 00:35:39,690 --> 00:35:41,070 We still don't know if it's accurate. 735 00:35:42,185 --> 00:35:42,305 I. 736 00:35:43,125 --> 00:35:44,895 You might be charging a hundred dollars an hour and you might be 737 00:35:44,895 --> 00:35:47,835 like, wow, okay, I want, I need to just simply raise that to 1 25. 738 00:35:47,835 --> 00:35:49,245 No, just don't do that right away. 739 00:35:49,635 --> 00:35:51,435 Look at your real data. 740 00:35:52,245 --> 00:35:55,095 If you're not sure what your data is, ask me, email me. 741 00:35:55,095 --> 00:35:58,725 I'll give you a hourly rate calculator and you could use it. 742 00:35:59,020 --> 00:36:03,640 And figure out what your true to the penny hourly rate is. 743 00:36:04,060 --> 00:36:05,500 Because let me tell you something here. 744 00:36:05,620 --> 00:36:09,520 There's a lot of people out there with some fake ass formulas, okay? 745 00:36:09,940 --> 00:36:12,640 Total hours divided by total employees. 746 00:36:12,970 --> 00:36:16,810 Boom, hourly rate, wrong, not even close. 747 00:36:17,770 --> 00:36:20,020 What is your billable production rate? 748 00:36:20,730 --> 00:36:24,210 Is the correct term, how many hours are you actually able to sell? 749 00:36:24,870 --> 00:36:27,000 Not every employee is working full-time here, guys. 750 00:36:27,000 --> 00:36:29,399 You guys know that 40 hours a week is not what you're, you're 751 00:36:29,399 --> 00:36:30,540 paying somebody 40 hours. 752 00:36:30,540 --> 00:36:32,370 They're not working 40 hours, okay? 753 00:36:32,670 --> 00:36:37,560 So you have to take into a, into account certain factors of downtime and things 754 00:36:37,560 --> 00:36:43,680 that you just simply cannot charge a customer for hourly billable production 755 00:36:43,680 --> 00:36:47,205 rate should meet or exceed 1 25 an hour. 756 00:36:49,259 --> 00:36:49,470 It. 757 00:36:50,069 --> 00:36:51,630 I wanna just take a minute on this. 758 00:36:51,725 --> 00:36:54,390 I, I, i, I won't go too long 'cause I know we only have about 759 00:36:54,390 --> 00:36:55,740 10 or 15 minutes left here. 760 00:36:57,810 --> 00:37:03,750 For those listeners out there that are really dialed into their hourly production 761 00:37:03,750 --> 00:37:08,100 rate, like they know what it is, I'm going to challenge you here because you 762 00:37:08,100 --> 00:37:14,640 should be fluctuating that rate based off of the capacity of your schedule. 763 00:37:15,959 --> 00:37:18,240 Okay, let me, let me explain what that means. 764 00:37:18,240 --> 00:37:18,299 Whoa. 765 00:37:19,230 --> 00:37:19,620 Okay. 766 00:37:21,600 --> 00:37:22,319 I see where you're going. 767 00:37:23,520 --> 00:37:25,500 If you are at one 20, let's just say you're a shop. 768 00:37:25,500 --> 00:37:27,839 You're at 1 25 an hour and you're busy. 769 00:37:28,439 --> 00:37:28,799 Okay. 770 00:37:28,890 --> 00:37:34,589 Busy ish means like, I'm busy, everybody's working, I'm still 771 00:37:34,589 --> 00:37:36,689 taking orders, et cetera. 772 00:37:37,859 --> 00:37:43,020 How much rope do you have left before you're at maximum capacity? 773 00:37:44,385 --> 00:37:47,835 How many more jobs can you take on before you can, you gotta 774 00:37:47,835 --> 00:37:48,945 say, I can't take anymore. 775 00:37:49,785 --> 00:37:51,375 And I know that's an interesting problem to have. 776 00:37:51,375 --> 00:37:53,805 'cause almost none of you out there are saying no. 777 00:37:54,285 --> 00:37:58,515 And if you're not saying no, man, start trying. 778 00:37:58,605 --> 00:37:59,895 Start trying to say no. 779 00:38:00,285 --> 00:38:02,025 That's my biggest piece of advice here. 780 00:38:02,670 --> 00:38:04,529 Because not every job is worth taking. 781 00:38:04,529 --> 00:38:09,509 Every a a vinyl job can disrupt a very large production channel editor job. 782 00:38:10,110 --> 00:38:13,950 The banner that a window perf sign that comes in off the street can disrupt your 783 00:38:13,950 --> 00:38:16,080 workflow If you're not realizing that. 784 00:38:16,140 --> 00:38:16,845 Get to realize that. 785 00:38:16,845 --> 00:38:17,125 Talk 786 00:38:17,125 --> 00:38:19,350 to ton of shop owners that that's the case. 787 00:38:19,350 --> 00:38:19,410 Yeah. 788 00:38:19,620 --> 00:38:21,840 Like, Hey, these little jobs are eating us up. 789 00:38:22,590 --> 00:38:22,830 Yep. 790 00:38:23,505 --> 00:38:26,130 But there is a point where if you want to say yes. 791 00:38:26,745 --> 00:38:27,705 How are you saying? 792 00:38:27,705 --> 00:38:28,125 Yes. 793 00:38:28,845 --> 00:38:32,835 Okay, so lemme, let's just say you're at 80% capacity, 794 00:38:34,995 --> 00:38:39,674 but in order to really fill in the, the, the 10 or or 15% more that you have on 795 00:38:39,674 --> 00:38:43,065 your rope, I'm raising that hourly rate. 796 00:38:43,964 --> 00:38:47,174 I'm raising that not to, not, not keeping it at 1 25, I'm gonna 797 00:38:47,174 --> 00:38:51,915 raise it because I'm gonna be near danger zone on my production rate. 798 00:38:52,665 --> 00:38:54,674 I'm gonna be tearing my hair outta my head. 799 00:38:54,674 --> 00:38:55,725 My team is gonna be. 800 00:38:57,314 --> 00:38:59,024 You know at it on its wits end. 801 00:38:59,805 --> 00:39:00,134 Yeah. 802 00:39:00,194 --> 00:39:02,774 Plea, you know, crying wolf, whatever it is. 803 00:39:04,274 --> 00:39:10,725 And I need to charge more for that because I am needing to be profitable, 804 00:39:10,725 --> 00:39:14,984 at least if I'm gonna go into critical mode and put and overwork my staff. 805 00:39:16,544 --> 00:39:17,625 Yeah, makes sense. 806 00:39:18,285 --> 00:39:19,694 But there's an opposite side to that. 807 00:39:20,130 --> 00:39:21,360 There's an opposite side to that. 808 00:39:21,450 --> 00:39:28,110 And what if you're at one 50 an hour or $200 an hour and you're slow and 809 00:39:28,110 --> 00:39:32,580 you have more on your plate, you know, your, your, your advertising budget is 810 00:39:32,580 --> 00:39:34,440 not converting leads the way it should. 811 00:39:36,030 --> 00:39:41,280 Well, now I'm gonna drop my, my, my rate a bit. 812 00:39:41,760 --> 00:39:44,520 I'm not saying to, to a certain dollar amount, but you know, within 813 00:39:44,520 --> 00:39:47,280 reason to account for more capacity. 814 00:39:47,850 --> 00:39:49,140 So your hourly rate. 815 00:39:49,830 --> 00:39:51,960 This is where people get the hourly rates wrong. 816 00:39:52,350 --> 00:39:55,439 I'm so happy that we're catching up to this because we are talking 817 00:39:55,439 --> 00:39:57,000 about like real numbers now. 818 00:39:57,000 --> 00:40:00,359 We're no longer in the world of like my hourly rate's, $65 an hour. 819 00:40:00,779 --> 00:40:03,480 Like that's just, that was like seven years ago. 820 00:40:04,859 --> 00:40:06,149 We're in the 1 25 now. 821 00:40:06,149 --> 00:40:09,990 Range inflation, cost of goods, the cost of living is increased. 822 00:40:10,620 --> 00:40:10,950 You. 823 00:40:11,805 --> 00:40:14,654 Rent is going up, wages are have increased. 824 00:40:14,654 --> 00:40:17,174 You know, you have to, you have to, at this point, your marketing dollars have 825 00:40:17,174 --> 00:40:19,544 gone up, cost of materials have gone up. 826 00:40:20,145 --> 00:40:23,535 You have to be in this area 125 or more. 827 00:40:24,225 --> 00:40:29,535 But even those shop owners that are dead set in their like number, that 828 00:40:29,654 --> 00:40:31,395 they're confident that that is accurate. 829 00:40:32,160 --> 00:40:38,100 Are not looking at their hourly rate in this, like, floating scale ca way. 830 00:40:38,100 --> 00:40:40,680 Well, it's like they're not looking at it from a week by week basis. 831 00:40:40,710 --> 00:40:40,920 Yeah. 832 00:40:41,850 --> 00:40:47,040 I, I love that view because it's, you know, when you think of it, like, we 833 00:40:47,040 --> 00:40:49,649 talked about this in the pricing course, like we're not selling rubber docks 834 00:40:49,649 --> 00:40:51,509 that are the same every single time. 835 00:40:52,260 --> 00:40:57,180 You, you estimate how much it's gonna cost you in time and materials, right? 836 00:40:57,180 --> 00:41:00,540 So we have to know what to charge for that time. 837 00:41:00,600 --> 00:41:04,290 Now, that's not to say that, Hey, we, we shouldn't be trying to always get 838 00:41:04,290 --> 00:41:10,680 more, even if it's the same job, like it, obviously clients have, uh, different 839 00:41:10,680 --> 00:41:17,040 values associated to maybe the same sign, but like this number is the basis for. 840 00:41:18,480 --> 00:41:21,990 For estimating and your pricing is, is critical. 841 00:41:22,290 --> 00:41:25,500 Uh, but it like having it flexible. 842 00:41:27,105 --> 00:41:28,095 Even more critical. 843 00:41:28,455 --> 00:41:32,535 Uh, yeah, you have to look at your, you have to look at your production schedule. 844 00:41:32,565 --> 00:41:36,375 Like if you're not having the, I love this term, by the way, I, I picked this 845 00:41:36,375 --> 00:41:40,635 up from my Canadian client, your JSM meetings, your job status meetings. 846 00:41:40,635 --> 00:41:41,235 I love that. 847 00:41:41,445 --> 00:41:44,625 I, I've never heard of that before, but your production meetings or 848 00:41:44,625 --> 00:41:46,695 your JSM meetings, I love that js. 849 00:41:47,625 --> 00:41:47,655 Okay. 850 00:41:47,655 --> 00:41:51,675 If you're not having those meetings where you could say like, okay, this 851 00:41:51,675 --> 00:41:52,935 is what we're working on this week. 852 00:41:53,565 --> 00:41:57,734 You probably need to start there where you can understand, like if I'm mapping 853 00:41:57,734 --> 00:42:03,165 this out on a schedule, like think about like, um, think about like bar owners, 854 00:42:03,165 --> 00:42:06,645 restaurant owners that are creating a shift schedule for their staff, right? 855 00:42:06,645 --> 00:42:06,705 Yeah. 856 00:42:07,065 --> 00:42:10,665 They could see every time slot for every individual who's working 857 00:42:10,665 --> 00:42:13,395 and who's working When, I mean, we've lived in that world forever. 858 00:42:13,515 --> 00:42:17,835 That's not going away, but when you're in the sign industry, you can. 859 00:42:18,300 --> 00:42:20,490 Look at your jobs in the same light. 860 00:42:20,490 --> 00:42:21,990 Like this is what we're printing. 861 00:42:21,990 --> 00:42:24,270 This is when it's printing, this is when we're fabricating it. 862 00:42:24,455 --> 00:42:26,145 This is when time for sales. 863 00:42:26,145 --> 00:42:26,550 This is the next 864 00:42:26,550 --> 00:42:29,220 available slot to do this job, 865 00:42:29,610 --> 00:42:29,760 right? 866 00:42:29,760 --> 00:42:35,130 You could visually see how much capacity you have, and if you say, 867 00:42:35,220 --> 00:42:38,670 wow, we can, you know, what is this guy working on on Thursday? 868 00:42:38,970 --> 00:42:40,140 You have more capacity. 869 00:42:40,410 --> 00:42:40,590 You have. 870 00:42:41,385 --> 00:42:42,405 Additional capacity. 871 00:42:42,405 --> 00:42:43,305 So what does that mean? 872 00:42:43,845 --> 00:42:44,205 Okay. 873 00:42:44,205 --> 00:42:47,805 We need to, we know what our break even number is on the hourly 874 00:42:47,805 --> 00:42:49,125 rate, so we can't go beneath that. 875 00:42:51,060 --> 00:42:54,450 I'm gonna lower some of that desired profit margin on that hourly rate to 876 00:42:54,450 --> 00:42:59,010 accommodate for additional capacity to give some more aggressive competitive 877 00:42:59,010 --> 00:43:03,000 pricing to get more orders in that are still profitable, but to bring 878 00:43:03,000 --> 00:43:07,620 on, uh, additional work due to the capacity of our production schedule. 879 00:43:07,620 --> 00:43:10,710 So if you're not looking at your hourly rate in that way. 880 00:43:10,990 --> 00:43:12,190 You should, you should be. 881 00:43:12,190 --> 00:43:17,020 Um, this was one of the reasons why I did like so many hourly rate calculations 882 00:43:17,020 --> 00:43:21,910 with Chatbox back in the day because I was always like, busy, super busy, super slow. 883 00:43:22,180 --> 00:43:24,700 You know, what, what's the lowest that we can go down here? 884 00:43:24,760 --> 00:43:27,490 Then you, you also give your, like your sales reps. 885 00:43:27,910 --> 00:43:29,800 They autonomy there is like, hey. 886 00:43:31,650 --> 00:43:35,220 We can knock the price off if we can get this order committed and into 887 00:43:35,220 --> 00:43:39,570 production because we've got, uh, you know, we've got a free slot, we've got 888 00:43:39,570 --> 00:43:42,420 four hours to fill on Tuesday, et cetera. 889 00:43:42,420 --> 00:43:42,810 Whatever. 890 00:43:43,200 --> 00:43:43,890 Yeah, yeah. 891 00:43:43,950 --> 00:43:49,260 Uh, as part of my shop policy, I would, I always had like a dry erase board, 892 00:43:49,560 --> 00:43:52,650 and I would always write in the top right corner of the dry erase board. 893 00:43:52,650 --> 00:43:54,960 Like this is this week's hourly rate. 894 00:43:55,230 --> 00:43:59,460 Like it would go down, it would go down $5, $10, $20, whatever it was. 895 00:44:00,464 --> 00:44:01,424 But it would always change. 896 00:44:01,515 --> 00:44:05,625 So people were conditioned to look at that hourly rate and always say like, 897 00:44:05,625 --> 00:44:11,234 okay, now I know kinda like how many hours to charge for at that rate based off of 898 00:44:11,234 --> 00:44:15,734 where we are in the schedule and who has closed and who has sold something and been 899 00:44:15,734 --> 00:44:17,595 added to the production schedule or not. 900 00:44:18,404 --> 00:44:20,924 So very interesting dynamic if you're not looking at it that way. 901 00:44:21,254 --> 00:44:23,475 I'm not necessarily saying that you should or you have to. 902 00:44:23,835 --> 00:44:26,895 Uh, but just staying in the black and white world of, no, 903 00:44:26,895 --> 00:44:28,669 my, my hourly rate is one 50. 904 00:44:29,610 --> 00:44:32,400 And, and leaving it alone is probably not such a good idea. 905 00:44:33,420 --> 00:44:34,290 Probably not such a good idea. 906 00:44:34,560 --> 00:44:38,400 And then finally here guys, look, side shop commandment number 10. 907 00:44:38,610 --> 00:44:39,750 Finally here 908 00:44:42,090 --> 00:44:43,950 we gotta talk about your conversion rates. 909 00:44:44,310 --> 00:44:44,610 Okay? 910 00:44:45,720 --> 00:44:49,230 Now we, earlier we talked about lead to quote, this is the next 911 00:44:49,230 --> 00:44:54,180 one, down that path, quote to order, quote to sales order. 912 00:44:54,870 --> 00:44:55,259 Okay? 913 00:44:55,950 --> 00:44:58,980 Conversion rate for quote conversion. 914 00:45:00,000 --> 00:45:06,149 To sales order should equal or exceed 65%. 915 00:45:06,569 --> 00:45:12,690 What that actually means is, is this, you quoted 10 of them, 6.5 916 00:45:12,690 --> 00:45:14,759 of them have said yes, that's it. 917 00:45:14,759 --> 00:45:14,940 Why is 918 00:45:14,944 --> 00:45:16,109 this number so low? 919 00:45:16,109 --> 00:45:16,379 Pete? 920 00:45:18,029 --> 00:45:18,270 That's me. 921 00:45:18,270 --> 00:45:18,779 Why is the 922 00:45:18,779 --> 00:45:19,415 number so low? 923 00:45:20,040 --> 00:45:21,509 That's me playing devil's advocate. 924 00:45:21,509 --> 00:45:25,919 If, for, for the listeners who can't see my face right now, 925 00:45:26,790 --> 00:45:30,390 well, I actually don't think that this has anything to do 926 00:45:30,569 --> 00:45:33,779 with the sign shop's behavior. 927 00:45:34,200 --> 00:45:34,620 Okay. 928 00:45:34,620 --> 00:45:38,310 Pricing, I think this is, has everything to do with the buyer's mentality. 929 00:45:38,819 --> 00:45:39,044 Okay. 930 00:45:39,964 --> 00:45:45,359 If you are a shop, and when you send out a quote, I hate to tell you this, but 931 00:45:45,359 --> 00:45:47,399 you are not selling 100% of your quotes. 932 00:45:48,570 --> 00:45:50,490 If you are, call me. 933 00:45:50,880 --> 00:45:51,780 I wanna be a partner. 934 00:45:53,490 --> 00:45:53,760 Oh, 935 00:45:53,760 --> 00:45:54,150 that's simple. 936 00:45:54,390 --> 00:45:56,160 That's not really disagree with you, man. 937 00:45:56,610 --> 00:45:58,080 I wanna invest in your business. 938 00:45:58,080 --> 00:46:01,530 If you are quoting and selling 100% of your quotes. 939 00:46:02,070 --> 00:46:03,660 If you need an investor, you call me. 940 00:46:04,800 --> 00:46:06,720 That's a, that's a symptom to me, my friend. 941 00:46:07,500 --> 00:46:08,010 No, if you, 942 00:46:08,730 --> 00:46:12,840 if you are earning, if you're selling a hundred percent like you 943 00:46:12,840 --> 00:46:16,950 convert, you send a quote, converts over at a hundred percent rate. 944 00:46:17,895 --> 00:46:19,395 Pricing too low. 945 00:46:20,174 --> 00:46:20,714 A hundred percent. 946 00:46:21,410 --> 00:46:22,515 Oh, oh, oh, oh. 947 00:46:22,515 --> 00:46:24,435 I didn't know where the heck you were going with that. 948 00:46:24,435 --> 00:46:25,515 I'm like, wait a second, here 949 00:46:25,545 --> 00:46:27,285 you are pricing too low. 950 00:46:27,285 --> 00:46:29,145 And that's, that's why I love this number. 951 00:46:29,535 --> 00:46:33,255 It used to come up all the time, uh, because this was one of the ones that's 952 00:46:33,255 --> 00:46:38,924 on that Shox dashboard and it, the dashboard of all the other like softwares 953 00:46:38,930 --> 00:46:44,654 and CRMs, you could see, okay, how many, how many did we win out of this? 954 00:46:45,870 --> 00:46:46,830 What was the percentages? 955 00:46:48,569 --> 00:46:48,870 Yeah. 956 00:46:48,870 --> 00:46:52,049 So let's, let's, let's back up a minute. 957 00:46:52,200 --> 00:46:52,589 Okay? 958 00:46:52,589 --> 00:46:52,740 Yep. 959 00:46:52,740 --> 00:46:53,940 Alright, let's back up a minute. 960 00:46:54,720 --> 00:46:58,080 Assuming that this is the first time that you've heard about all of these 961 00:46:58,080 --> 00:47:03,089 10 Sign Shop Commandments, most shops are not performing well in all of them. 962 00:47:03,240 --> 00:47:06,420 They have some, they have rooms for improvement to be made here. 963 00:47:07,500 --> 00:47:12,360 Um, maybe their average invoice is under $600, which is to your point. 964 00:47:13,200 --> 00:47:17,970 Why their conversion rate would be so high, but if their hourly billable 965 00:47:17,970 --> 00:47:22,920 production rate is at 1 25 or more, maybe there is something to that. 966 00:47:23,010 --> 00:47:27,690 But if it's not and you're converting at a higher rate than 65 or. 967 00:47:27,900 --> 00:47:33,000 If you're closer to a hundred, you are probably underpricing your jobs and you're 968 00:47:33,000 --> 00:47:34,710 not selling them at a profitable level. 969 00:47:34,710 --> 00:47:38,280 Because if you are closing at a hundred percent, why are 970 00:47:38,280 --> 00:47:39,780 you listening to this podcast? 971 00:47:40,050 --> 00:47:45,090 If you are making 30%, 40% profit and you're selling every 972 00:47:45,090 --> 00:47:46,350 job, why are you listening? 973 00:47:46,860 --> 00:47:50,160 'cause you're not doing that because you're not close to doing that. 974 00:47:50,700 --> 00:47:57,180 So the average shop will take eight out of 10 leads and quote them. 975 00:47:59,009 --> 00:48:04,319 And then out of those eight, they are selling 65% of them, and it's due to 976 00:48:04,319 --> 00:48:10,290 a, in large amount of the con of the buyer's behavior and the relationship 977 00:48:10,440 --> 00:48:14,100 that the buyer has with the company and the person that they're talking with. 978 00:48:14,100 --> 00:48:21,180 The reason why it's also 65% is, is to also account for those sign shops 979 00:48:21,180 --> 00:48:25,560 out there that are transactional with their pricing and not. 980 00:48:25,560 --> 00:48:25,860 Mm-hmm. 981 00:48:26,505 --> 00:48:30,345 Consultative with their pricing, you're, if you are black and white, you know, 982 00:48:30,345 --> 00:48:33,435 I have a client, I have a client, I, I won't mention him by name, but I have a 983 00:48:33,435 --> 00:48:35,505 client who is extremely transactional. 984 00:48:35,625 --> 00:48:38,235 I mean his, to a flaw. 985 00:48:38,355 --> 00:48:40,395 His biggest flaw in his sign shop is I. 986 00:48:40,800 --> 00:48:45,240 I don't have the bental capacity to be consultative or even 987 00:48:45,240 --> 00:48:46,590 bandwidth to be consultative. 988 00:48:46,590 --> 00:48:48,180 So it's just order taking. 989 00:48:48,630 --> 00:48:50,100 It's just nothing but order taking the door. 990 00:48:50,400 --> 00:48:50,580 Yeah, 991 00:48:50,790 --> 00:48:53,970 get it in, get it out, get it in as quickly as you can and follow 992 00:48:53,970 --> 00:48:55,620 up with them, uh, on it later on. 993 00:48:56,970 --> 00:49:01,380 Like, can you price me for a three foot by six foot max metal 994 00:49:01,380 --> 00:49:03,240 sign on installed on posts? 995 00:49:03,780 --> 00:49:09,270 Man, if you are not consultative with that, you are screwing yourself. 996 00:49:09,270 --> 00:49:12,870 But if you are in a world where it's like, sure, three by six, enter it 997 00:49:12,870 --> 00:49:19,170 into my formula, single sided, two wood posts, $750, and the customer 998 00:49:19,170 --> 00:49:21,090 says, yeah, the price is too high. 999 00:49:21,510 --> 00:49:22,350 You just lost the lead. 1000 00:49:22,410 --> 00:49:24,450 You just lost a sale because you were not constant. 1001 00:49:24,450 --> 00:49:25,410 You didn't ask questions. 1002 00:49:25,410 --> 00:49:28,410 You don't, you didn't develop the relationship a hundred percent. 1003 00:49:29,430 --> 00:49:32,609 So there is a, you have to take into account a couple of factors here. 1004 00:49:32,609 --> 00:49:37,709 65% is because of transactional behavior of the sign shop owner, but 1005 00:49:37,709 --> 00:49:41,399 it's also about a buyer potentially saying, okay, I got a price. 1006 00:49:41,459 --> 00:49:42,540 Let me go shop that around. 1007 00:49:43,049 --> 00:49:46,799 Lemme go see if I could get a better price or validate the 1008 00:49:46,799 --> 00:49:47,790 price that I was just given. 1009 00:49:48,299 --> 00:49:50,129 So you're not selling yes to everything. 1010 00:49:50,129 --> 00:49:51,660 And if you are, that's why I made that comment. 1011 00:49:51,660 --> 00:49:55,470 If you are, I wanna be your partner because, uh, assuming that 1012 00:49:55,470 --> 00:49:58,290 you're doing all of these items, these 10 commandments correctly. 1013 00:49:58,904 --> 00:50:00,674 You're closing that much man. 1014 00:50:00,674 --> 00:50:02,535 You got yourself an operation that is cooking. 1015 00:50:02,714 --> 00:50:03,705 I wanna be a part of it. 1016 00:50:03,705 --> 00:50:03,884 Okay. 1017 00:50:04,035 --> 00:50:04,305 All right. 1018 00:50:04,575 --> 00:50:05,654 And I wanna be part of it. 1019 00:50:05,654 --> 00:50:05,805 Ill that. 1020 00:50:06,359 --> 00:50:12,870 But if you are not cooking in any of these particular KPIs, uh, well this is, um, 1021 00:50:13,290 --> 00:50:14,970 you know, look, I I would also say this. 1022 00:50:14,970 --> 00:50:16,410 I've bought sign shops in the past. 1023 00:50:16,410 --> 00:50:17,700 I built sign shops in the past. 1024 00:50:17,700 --> 00:50:20,700 I've sold sign shop to sign shops in the past. 1025 00:50:21,540 --> 00:50:26,490 These are also the, the 10 things that I look for when evaluating 1026 00:50:26,549 --> 00:50:28,230 a purchase or an acquisition. 1027 00:50:28,859 --> 00:50:31,890 I'm looking at these particular 10 items and saying. 1028 00:50:33,075 --> 00:50:34,545 How well is your shop performing? 1029 00:50:35,295 --> 00:50:35,851 And if I is a 1030 00:50:35,856 --> 00:50:37,305 healthy shop, like Yeah, 1031 00:50:37,305 --> 00:50:38,745 if it's a healthy shop or not. 1032 00:50:39,225 --> 00:50:41,865 Uh, I don't the, let me say it like this. 1033 00:50:41,865 --> 00:50:44,745 When you're putting together a profit and loss statement, 1034 00:50:45,645 --> 00:50:46,995 where does your eye go, Brian? 1035 00:50:47,445 --> 00:50:49,245 Like when you finally get it from your accountant, your 1036 00:50:49,245 --> 00:50:50,085 bookkeeper, where do you go? 1037 00:50:50,730 --> 00:50:51,780 Straight to the bottom baby. 1038 00:50:52,590 --> 00:50:53,550 How much money did I make? 1039 00:50:54,030 --> 00:50:54,120 Yeah. 1040 00:50:54,120 --> 00:50:58,950 And honestly, you have to de train yourself to do that as a sign shop owner. 1041 00:50:59,610 --> 00:51:04,410 I recently did a financial audit with one of my clients in Miami, Florida, 1042 00:51:05,370 --> 00:51:09,330 and he was like, here's my, here's my year to date p and l spread, you 1043 00:51:09,330 --> 00:51:14,040 know, every month, you know, he put it into my spreadsheet and I'm like, bro. 1044 00:51:14,805 --> 00:51:18,915 Are you realizing that your shop is like performing a hell of a lot better 1045 00:51:18,915 --> 00:51:20,595 than how you're presenting it right now? 1046 00:51:21,045 --> 00:51:23,535 And he was like, how do you figure I'm only profiting? 1047 00:51:23,535 --> 00:51:24,375 I forget what the number was. 1048 00:51:24,375 --> 00:51:25,365 It was like 9%. 1049 00:51:25,425 --> 00:51:26,505 He was netting 9%. 1050 00:51:26,505 --> 00:51:29,205 I'm like, your shop is actually netting 21%. 1051 00:51:29,685 --> 00:51:33,675 And here's why I'm able to pinpoint all of these areas of which like 1052 00:51:34,065 --> 00:51:38,985 inaccurate accounting or, you know, if these are owner discretionary 1053 00:51:38,985 --> 00:51:40,935 expenses that you're referring to here. 1054 00:51:42,240 --> 00:51:45,240 And you start eliminating things and getting to the, the meat and potatoes 1055 00:51:45,240 --> 00:51:47,340 of, of what these 10 KPIs are. 1056 00:51:47,640 --> 00:51:49,890 Man, this guy's shop was like, dude, your shop's performing 1057 00:51:49,890 --> 00:51:52,050 like at a 21% net profit margin. 1058 00:51:52,290 --> 00:51:55,350 Your cost of goods percentage is slightly high, but you're on pace 1059 00:51:55,350 --> 00:51:56,850 to be doing X amount of dollars. 1060 00:51:56,850 --> 00:51:59,880 Which if that happens in the end of the year, you're going to 1061 00:51:59,880 --> 00:52:04,020 see this, you know, get to that market level of, you know, under. 1062 00:52:04,725 --> 00:52:07,605 Whatever it was, 17%, 16%, whatever his cost of goods weren't. 1063 00:52:08,145 --> 00:52:08,325 Sure. 1064 00:52:08,325 --> 00:52:12,105 So, you know, you could look at a profit and loss very differently, but we are 1065 00:52:12,105 --> 00:52:15,015 trained to look at it from a professional and account and a bookkeeper and think 1066 00:52:15,015 --> 00:52:17,654 that it's the gospel, but it's not. 1067 00:52:17,714 --> 00:52:20,475 I've teach, I've taught you some things here on how to look 1068 00:52:20,475 --> 00:52:21,524 at your numbers differently. 1069 00:52:21,915 --> 00:52:25,274 A closer attentions to the per to the percentages and. 1070 00:52:26,655 --> 00:52:31,695 Little tip, ask your bookkeeper, ask your, uh, accountant that when they do give you 1071 00:52:31,695 --> 00:52:36,765 that, uh, profit in loss statement, to also add the column percentage of income 1072 00:52:37,035 --> 00:52:42,195 so that you can look at those percentages and not so much the dollar amount. 1073 00:52:42,585 --> 00:52:42,855 Okay? 1074 00:52:42,855 --> 00:52:45,255 And do the manual calculations yourself, because if you're looking 1075 00:52:45,255 --> 00:52:49,635 at this month by month, you're gonna see this up and down, up and down. 1076 00:52:50,730 --> 00:52:53,310 If you look at it once a year, you're already too late. 1077 00:52:53,310 --> 00:52:55,860 You can't make any improvements, you can't make any, you can't do 1078 00:52:55,860 --> 00:52:57,990 anything with the profit and loss. 1079 00:52:58,380 --> 00:52:59,550 So look at it monthly. 1080 00:53:00,360 --> 00:53:03,660 Pay close attention to these 10 Sign Shop Commandments because if you 1081 00:53:03,660 --> 00:53:05,670 are, you're a healthy sign shop. 1082 00:53:05,670 --> 00:53:08,610 If you're performing really well in all of these areas, you're a 1083 00:53:08,610 --> 00:53:12,300 sign shop that has value, you're a sign shop that can be sellable. 1084 00:53:12,480 --> 00:53:16,560 You're a sign shop that can be profitable, and you're probably a sign shop owner. 1085 00:53:16,995 --> 00:53:20,535 Sitting on Tahiti somewhere, sipping some margaritas, thanking 1086 00:53:20,535 --> 00:53:23,625 me for saying, yep, that's the validation that I was looking for. 1087 00:53:23,805 --> 00:53:25,575 Now I can, uh, you know. 1088 00:53:26,085 --> 00:53:28,515 Gear myself towards getting, getting on another margarita 1089 00:53:28,515 --> 00:53:29,805 or going on another vacation. 1090 00:53:29,835 --> 00:53:34,004 So I hope you've enjoyed the 10 Sign Shop Commandments here. 1091 00:53:34,395 --> 00:53:39,615 Whether you're aiming to increase profitability or achieve sustainable 1092 00:53:39,615 --> 00:53:45,435 growth, these commandments, these laws, these KPIs, whatever you wanna call 1093 00:53:45,435 --> 00:53:51,464 them, they are essential rules for your sign shop's financial success. 1094 00:53:52,990 --> 00:53:53,280 Boom. 1095 00:53:53,595 --> 00:53:54,345 Mic drop. 1096 00:53:54,855 --> 00:53:55,335 Pete's out. 1097 00:53:56,025 --> 00:53:56,925 Pete's out. 1098 00:53:57,615 --> 00:53:58,125 What do you think? 1099 00:53:58,605 --> 00:53:58,965 Like it? 1100 00:53:59,535 --> 00:53:59,835 Cool. 1101 00:54:01,635 --> 00:54:05,055 If you liked this episode, make sure you hit subscribe to get all 1102 00:54:05,055 --> 00:54:09,825 the latest episodes and check out our website, better Sign shop.com. 1103 00:54:10,605 --> 00:54:13,785 Get free resources and helpful tools on growing your shop. 1104 00:54:14,145 --> 00:54:15,135 Thanks for listening.