search
cart
facebook twitter linkedin youtube instagram Spotify Podcasts Apple Podcasts Spotify Podcasts Apple Podcasts
  • Sign In
  • Create Account
  • Sign Out
  • My Account
  • NEWS
  • TOPICS
    • Cool Roofing
    • Event News
    • Latinos in Roofing
    • Low Slope
    • Legal
    • Metal
    • Project Profiles
    • Roofing Supply Pro
    • Roofing Safety
    • Steep Slope
    • Sustainable Roofing
    • Technology
  • EXCLUSIVES
    • Best of Success
    • Contractor Profile
    • IRE Show
    • Roofing Contractor of the Year
    • Top 100
    • Young Guns
    • State of the Industry
    • Century Club
  • MULTIMEDIA
    • Videos
    • Podcasts
    • Interactive Spotlights
    • Roofing Quizzes
    • IRE Videos
    • Webinars
    • Photo Galleries
  • PRODUCTS
    • New Products
    • Featured Products
  • COLUMNS
    • Editor's Note
    • Exit Planning
    • Legally Speaking
    • Safety Advice
    • Technical Details
    • Guest Column
  • EVENTS
    • International Roofing Expo
    • Webinars
    • Best of Success Conference
    • Industry Events
  • DIRECTORY
    • Associations
    • Distributors
    • Manufacturer/Supplier
    • Business Services
    • Get Listed
  • MORE
    • Roofing Contractor eNews
    • Techos y Más Advisory Board
    • RC Store
    • Roofing Supply Pro
    • Custom Content & Marketing Services
    • Market Research
    • Sponsor Insights
    • Company Spotlights
    • Classifieds
      • Auctions
      • Business For Sale
      • Business Opportunities
      • Equipment For Sale
      • Positions Available
      • Products
      • Safety
      • Software
      • Services
      • Training
    • Contact Us
  • EMAGAZINE
    • eMagazine
    • Advertise
      • Media Kit
      • Editorial Calendar
      • Contact
    • Archive Issues
  • SIGN UP!

Loaves of Bread Not Slices

By Al Levi
May 23, 2010
I’ll admit it. I’m not a giant fan of reading financials and management reporting.



I’ll admit it. I’m not a giant fan of reading financials and management reporting.

I’ll also admit. That I can help pretty much any business be more successful and they’ll fail if they don’t know the numbers.

That’s why I make sure they’re in good hands when it comes to this particular one of the 7 Power Concepts I speak about on a regular basis.

Yes, I can read a financial statement and I know what the numbers mean.

Yes, it still bores me!

The reason it really bores me is when I read financial reports where anal-retentive owners and/or their accountants get busy generating tons of paper all of which make it even more mind numbing.

The great Frank Blau told me once, “If you can’t run your company with a pad and a pencil the computer will just obscure the facts.” That doesn’t mean the computer isn’t helpful. It is. But, sometimes it just generates too much or the wrong things.

My good friend who handles the financial one-to-one work with my clients teaches them, “You don’t need to know how many slices of bread there are on the shelf when all you need to know is how many loaves of bread there are.”

When I’m working only one to one with clients and she’s not involved, I teach my clients the following: Focus on the basics on real-world accounting and know that this is not the same as tax accounting.

Real-world accounting done properly gives owners and managers real numbers designed to run their company in real-time which tax accounting that your accountant typically does is designed to help you avoid or at least delay paying taxes which is a good thing. But, only real-world accounting will help you run your company with a financial dashboard to know where you are and where you’re headed.

Here’s the loaves of bread I pay attention to:

Key Numbers for Service & Repair Companies

Note: The following is only Rule of Thumb, but it’s based on experience in traveling the country and speaking with other industry leaders.

1. Marketing is 4 - 18% of last year’s gross sales. Four percent being conservative and typically a mature company and 18% being for a company highly aggressive at growing.

2. A desired ratio of 2 employees in the field making money for every 1 employee [including the boss or bosses] on the inside. 1.5 to 1 is still acceptable. 1 to 1 is a danger sign.

3. Gross profit of 50 to 70%. The more service you do the more it should lean toward 70%, and the more install you do the more it tends to lean toward 50%.

4. Having a high new profit of say 8 - 20% is only necessary if you need it to show the banks or are preparing to sell. The focus needs to be on hitting top line gross sales and gross profit targets first and foremost.

Note: Another reason I don’t get overly focused on Net Profit is I know I can “massage it’ anyway I want by paying the owner and managers more profit sharing and bonuses and loading up on other types of compensation and perks.

5. A CSR conversion rate of 75% or higher.

6. A Service Tech conversion rate of 75% or higher.

7. $250,000 per truck/year was a good goal in the past. The goal has been trending toward averaging $300,000 per truck/year. The best shops are averaging $350,000 and up. Anything $250,000 and below is a caution flag.

8. I like to see a budget line item for year-round recruiting, hiring and training that is at least 0.5% to 1% of last year’s sales.

9. 10% to 20% material cost to the total sales for a purer service and repair company.

10. 25% to 40% material cost to the total sales for purer new construction and remodel company.

Get focused on these key numbers and engineer a change that will get you focused on making the numbers work for you.

Links

  • Give Me 60 Minutes And I'll Show You The Secrets To Running A Profitable Service Business ... Even During A Recession!
  • Step by Step Program

Share This Story

Al Levi has been helping plumbing, HVAC, roofing, remodeling, electrical and carpentry businesses solve problems, turn greater profits, and help owners get their lives and free time back for over 7 years. This is all based on his 25-year career at his family-owned and operated contracting business. For more information, visit www.60minuterecessionsolution.com.
You must login or register in order to post a comment.

Report Abusive Comment

Blog Topics

Damato of the Day

Guest Blog

Recent Comments

Cambridge Heating And Cooling

Foundation Bolts Manufacturer and Supplier

Scratch Games

CDSCO Certification

Justin Bieber’s purple hoodie is an iconic piece...

Manage My Account
  • eMagazine Subscription
  • Sign Up for the eNewsletter
  • Online Registration
  • Manage My Preferences
  • Subscription Customer Service

More Videos

Sponsored Content

Sponsored Content is a special paid section where industry companies provide high quality, objective, non-commercial content around topics of interest to the Roofing Contractor audience. All Sponsored Content is supplied by the advertising company and any opinions expressed in this article are those of the author and not necessarily reflect the views of Roofing Contractor or its parent company, BNP Media. Interested in participating in our Sponsored Content section? Contact your local rep!

close
  • TAMKO Titan XL Shingles
    Sponsored byTAMKO®

    Built for Business: How Titan XT® Shingles Keep Proving Their Value

  • An overhead view of a residential block
    Sponsored byCBIZ CompuData

    From Spreadsheets to Strategy: How Roofing Companies Can Transform Financial Operations

  • Snow Guard Solutions for Metal Roofs by S-5!
    Sponsored byS-5!

    Safeguard Your Building: How Snow Guards Prevent Costly Roof & Property Damage

Popular Stories

The Home Depot is weighing a bid for GMS. The potential offer would pit the retail giant against QXO Inc.

UPDATE: Home Depot Pushes QXO Out of GMS Pursuit

Brad Jacobs, chairman and CEO of QXO, offers $5 billion to acquire GMS, a major distributor of gypsum and interior building products.

QXO Sets Its Sights on GMS in $5 Billion Offer

Undocumented workers make up 36% of the U.S. roofing workforce, leaving contractors and workers alike especially vulnerable.

Roofing is Left Exposed by Trump’s Deportation Flip-Flop

Roofing Contractor Webinar

Events

December 3, 2025

The Premier Roofing Conference: Best of Success

Join roofing professionals from across the nation at the 2025 Best of Success conference, the ultimate destination for roofing professionals seeking the latest industry insights and networking opportunities. Pick up strategies for critical challenges like workforce shortage with innovative solutions, explore the latest advancements in roofing technology and sustainable practices, and gain valuable insights from industry leaders on navigating the evolving roofing landscape.

View All Submit An Event
×

Be in the forefront of the roofing industry!

Join thousands of professionals today. Shouldn’t you know what they know?

JOIN NOW!
  • RESOURCES
    • Advertise
    • Contact Us
    • Directories
    • Store
    • Want More
  • SIGN UP TODAY
    • Create Account
    • eMagazine
    • eNewsletter
    • Customer Service
    • Manage Preferences
  • SERVICES
    • Marketing Services
    • Reprints
    • Market Research
    • List Rental
    • Survey/Respondent Access
  • STAY CONNECTED
    • LinkedIn
    • Facebook
    • Instagram
    • YouTube
    • X
  • PRIVACY
    • PRIVACY POLICY
    • TERMS & CONDITIONS
    • DO NOT SELL MY PERSONAL INFORMATION
    • PRIVACY REQUEST
    • ACCESSIBILITY

Copyright ©2025. All Rights Reserved BNP Media.

Design, CMS, Hosting & Web Development :: ePublishing