RISE Contractor Velocity - How Speed Affects the Bottom Line

Alright, guys, we're going to talk a little bit about velocity and how it determines your cash flow and profit. And so it's one of those things. This is something that's passionate on my own agenda because I don't think anybody really pays attention to it. They just think that it is what it is. And so velocity, for lack of a better term, is a measurement of the speed of something, how fast it gets from point A to point Z. So velocity plays the biggest role in our profitability. All comes down to how fast can a contractor get from start to finish with a client without compromising quality or service? So how fast can you. Does anybody know what their velocity is? You guys are in here. Average, Average from start to finish? About eight weeks. About eight weeks. Okay, that's pretty good. Now do you do. Oh, no, no, no. That's not velocity. That's. You just. You just started. All right, I'm talking from time you first meet the homeowner, do you collect the final check and send them their final paperwork? Year and a half, man, Illinois is crazy long. It is crazy long. Six weeks from start to finish on average. That's a super low number. I find that most contracts, what's that, 60? I find most contractors between 70 and 100 is where they are at days. 70 and 100 days, what's that? Not if you get Ink involved. Have you heard of Ink Inc? It's Iink. Look them up, Google them. They'll process all your mortgage checks for you for one and a half or 2%, I want to say, of the check. And you don't have to jack with it. They'll process every bit of it for you. It's fantastic. It's a brilliant idea. They pay you for it or they turn it around for you. They turn it around for you faster than you ever can because they have the processes and systems down and they're becoming so big now that the mortgage companies are just having to deal with them and they're making so much money that they're holding the mortgage companies to the fire and going, hey, if you don't start paying this stuff on time, we're going to sue you. So it's been a really cool thing. Inc is brand new. I just met him at the Iraq. And they're probably going to join the Catalyst group as well. Just because we feel like they bring some value and there's not a lot of crossover. So that's the definition of velocity in the contractor's world is how fast from first contact till I collect the Final check. So I can remember doing this as a contractor. I got taught this by a mentor. And I measured my. We took all of our jobs that we'd done for 1999, and we said, okay, how long did that take? 108 days. And I would challenge you guys that you're thinking you're six or five weeks or 60 days to actually go do the math on it, and it might shock you because I thought the same thing. I thought, eh, two months, two and a half months maybe. Man, it was a lot longer than that. Three and a half months. And so it obviously shocked me. And you understand what happens, right, with the longer it takes to get your money, the less profitable the job becomes exponentially. Like every day that it takes that that money's in somebody else's bank besides yours, you're losing money. That's why the insurance company is trying to hold on to it. So there's eight key ingredients of a team focused on velocity. And so I've got a team. I've got sales managers, production managers, administrative people, all these other people. And they have to be focused on this. And in order for us to get those time frames down. And I'll talk to you about what we did to get some of those time frames down. So they need a leader who rises to the challenge to evaluate the business, actually takes the time to look at it. I don't like standing up here. This room is too small for that. Well, too few people. So it was one of those things. When that got shown to me, I went, dude, what's going on? Why are we allowing this to happen? And we created some milestones and stuff that started to let us measure it. We started to see where those problems lie. And I'll show it to you here in just a few minutes. Everyone is focused on speed without shortcuts. Okay? So all of my team, we're trying to get from here to here as fast as we can without sacrificing our quality. No shortcuts. Everything is measured, analyzed, and refined to speed up the process. So I know, like, if I develop a step by step, how many of you were in my deal where I was talking about the step by step process? Any of you? So that step by step process, if I do it right, what was the last thing over there? Time. So if I know time, I can actually start to put it into this velocity measurement and determine whether I am being successful or not. And so it makes cuts when cuts are necessary to improve profitability. And so you can't be scared to say no to certain things. And so, for example, the thing we said no to, the biggest first cut we ever made. We don't do interior work anymore, ever. Never ever do we do interior work ever, ever again. Because once we started to analyze our velocity, it's where we were slowing down, and it's where we were least profitable. As a matter of fact, we were losing money on it. And we thought we had to do it to get the work right. Like, we're a general contractor. You got to do all the other stuff to get the roof right. No, you don't. That's just what you believe. That's what's in your head. That's what you have been conditioned to think you have to do. Ability to make complicated processes simple. And anybody that tells me that this roofing game, when you throw the insurance companies and mortgage companies into the equation is easy, I will call them a liar. And it's only gotten harder and harder and harder over time. And so what can I do to take that process and turn it into something much easier? We were talking about one of the ways we could do that over there in the other room. By having your own system and selling your system. Being a contractor and not really worrying about the insurance company as much as we normally would. Everyone is accountable and understands why. So we got all these measurements and everything on it. They all know because of those measurements what's going to happen. We're going to be able to evaluate their success or failure in their reviews so they're accountable to the process and they have the ability to see the big picture. Because we can get caught up in one job that took six months to collect and be all irritated and angry about that particular job. Things happen. I want to look at the entire big picture and say, overall, how are we doing? Because that one job, yeah, it was a mess, nasty, and it hurt our number. But overall, how are we doing? Are we doing pretty well or not? And this is the one where and why most roofing companies don't do this. Because whoever's leading it does not like systems and analysis. They like sales. That's what they really like. They like sales. Hey, did you sell one today? Did you sell one today? Hey, did you go make another sale? I don't how long it took. I don't care. I just want to make sure you made one right. And so we don't. It's not something we look at as enjoyable unless we find the right person. Now, did any of you meet Matt Morrison from Accu Links? Know who he Is, have you met him and my guy Kevin? Those guys would like systems and analysis. So I hand it to that person, I say, hey, do this for me. And they eat it up. They love it. So in empowering people to do some things that you may not like to do, that was really what I worked hard as. I am not a person that enjoys process systems, paperwork and all that other. I'm a sales guy. That's really what it comes down to for me. And so I had to find the right people to help me out, whether it was an administrative assistant, a new partner, whatever it was, to get those things done. So those things right there, if you do those things, you know that you've got a team that's focused on velocity. So we manage by the numbers. So revenue. So yearly revenue, quarterly revenue, monthly, weekly, daily. We manage by these terms all the time. Like this revenue is coming in and we're managing our cash flow based off of that revenue in most cases. Would you agree with me? Okay. And so by rep is the last one, like, hey, how's our rep doing? Is he doing well or not doing well? So the other thing that we need to take into consideration is overhead costs. And this is real overhead. This isn't the charged 10% or 15% stuff that I see all the time. This is actual real overhead. Employee payroll, rent, utilities, insurance, marketing, legal, phones, transportation, travel, education, technology, all our hardware and software tools, gifts, charitable giving, sponsorships, events. Do I got another one? Nope. What else would be on there? I mean, there's all kinds of overhead stuff that we forget about as contractors and we think that we're living within our overhead when we're not really. I challenge most of you to be under 15% in the real world. Like, if you actually did the math on it, that's probably where you'd be. And. And I challenge a lot of my guys to really go figure that out. It's super easy way to figure out this number. Take all those things that are not direct related cost to your job. So cost of goods, sold material and labor. Take everything else, add it all up and divide it by your revenue. That will tell you your percentage of overhead. Okay? And the first time you do it, make sure there's soft cushions around you, okay? Because when you fall over on the side and you hit the ground, I don't want you to crack your skull. I can remember the first time I did it was 17.7%. I went, holy cow, I'm losing 7.7% on every job I do because I'm not charging our actual real overhead. I'm charging a fictitious number if you pay off of gross profit. So I had to know these numbers and I had to get those figured out. Is it smart to adjust that? You know, the reality is, most people I'm coaching nowadays, it's like, don't pay off a gross profit unless you absolutely have to. The only reason your pay to your sales guys is determined by one thing. Are they in charge of profit or not? If they are fully in charge of profit, in other words, they know the revenue, the cost of all goods, and how to figure out markup and percentage of profit and all that other good stuff. And it's up to them to hit certain percentages, then they're in charge and they should be paid off a profit. If that's not the case and we work out the claims for the insurance, okay, we have somebody doing that for them or we have set pricing, we say, hey, you can't go below this number or you can't go below this percentage of profit. Then I control that. He's no longer in control. I can pay him based off the revenue. And I would much prefer to pay people off the revenue because if I pay people off the profit, what do I have to do? Gotta show them the books top to bottom. You know how many people that I have out there work? I think I told the guys that were in the last one how many guys I have working, 77 or so that went out and started their own companies. Because I showed them the books. Like, man, those books look really good. I want some of it. It's not the reality of it. And every single one of those guys will tell you, good lord, man, this is hard. It was a lot harder than I thought it was. Now I'll tell anybody that ever says as a sales guy that they want to be an owner. You better think that through because I am pretty good at what I do. If I got back in the business, I'd be a salesperson, no doubt about it. I got a lot less risk, a lot less effort, a lot less time involved. I can go and do as I please. I can outsell anybody else in the company and probably make more than the owner. I will, yes, I'll do it on one of our two minute drills. Actually, it is on one of my two minute drills. It is on one of my two minute drills. So now the other numbers I need to know is these cogs or cost of goods sold by trade. So I need to know not only that it was material, but what Trade did that material apply to? So roofing. And I've got roofing material, roofing labor, roofing permits. I would have siding labor, siding material, siding permits, and all of the different things are associated with it by trade. I'll come back here. So I need to know those things about that trade. Not only do I need to know that these are total dollars I got, but I got this much for roofing, this much for siding, this much for gutters, and these are all the things that are associated with each one. So at the end of the year, I can say, hmm, I made money at roofing. That was awesome. And that was like 42% and siding. Yeah, I did pretty good there, too. That's 38% gutters. Eh, we did like 22%. And this painting thing. God, we're upside down. 3%. What's going on here? Right. We're not doing that anymore. Why would we do that? We obviously aren't good at it, so stop doing it. So it allows me to manage by my numbers. Yes. So today, right now, do you interpret gross bronfit as revenue minus material, labor, and equipment? Yes. I would not. I would do. I've changed my thinking on that. I used to really say, hey, we should charge something for overhead. But I would just. I would adjust my commission structure accordingly because I have to. I cannot have a true accounting of that until after the year has happened, or I must have a very, very tight, strict budget. And that's usually hard for us to stick to in what we do. Okay. So I would say, hey, here's the revenue cost of my materials, cost of my labor, any other associated cost to that, whether it's debris removal, whatever charges for measurements and all that other stuff, like all my cost associated with that job, I'm out of it. This is the gross profit. I'm going to pay you based on that, but I'm not paying you 50%. There's no way. Yeah. And it may even be lower than that. It could be even lower than that because you've thrown that 10% overhead back in there. That number is in there. I never took it out. You just adjust the commissions accordingly. And that way you always know that you've got your true overhead accounted for. So any other questions about any of that? Seriously, just stop me if I'm rambling on. Okay? You can come up and like, hey, hey, hold on. All right, so I've got to compensate people. And so I've got commissions I have to consider and how I'm going to do them. And I'm going to give you just a real quick, like, rule of thumb. If you're a company doing more than $5 million a year, you more than likely have a sales manager, okay? And hopefully you have a production manager and then you've got some salespeople. And I'm probably not much more than that as far as organizational structure. Anybody fall in that group? Okay? So. And sometimes sales managers still owner, right? Like, he could play the same role. But you should get paid for your job, right? That's your job. And so my rule of thumb is this. The most of the profit after overhead that I'm willing to give up is 60%. And that means everybody, everybody that's commission based. If that's a sales manager, a production manager, general manager, salespeople, team leaders, whatever it is, I can denote 60% of that gross profit to it. I'm going to keep the other 40. And that's just the way I look at it. That's me personally. My rule of thumb, I have people with numbers less than that. I just know that that is about the max that you can do without putting yourself in a world of hurt. You get behind in cash flow pretty quickly. Okay? And then I also pay out a lot of bonuses and incentives. So I may have a lower number than that 60%. I might bring in at 50 and pay out that other 10 in bonus and incentives, but I cannot go over 60%. Does that make sense? Everybody with me, okay? And then flat fees, any flat fees that I gave out to sales guys, so they hit a number for the month and it's $1,000 bonus. Boom, there you go. Or it's not even a bonus, it's just part of their compensation package. Get $1,000 if you hit our goal, that's a flat fee. So I've got to make sure that other flat fees would be like if you were having somebody that was settling claims for you or writing estimates, that's a common one, 75 bucks an estimate, that's a flat fee. So we got to consider all those things as part of that job. So I got to know what my average job looks like. So my average revenue, my average price per square, my overhead, real overhead percentage, my percentage of material, percentage of labor measurements, what they cost me, permits, debris removal, third party fees, gross profit commissions, net profit. Oh, dadgummit. I've done that twice now. So I need to know those things about my jobs where I'm averaging on all of those numbers. So as I'm going through all of my business, I Need to know those numbers. You know, I've coached 170something companies now in those 170, I have never had a one that could tell me all of those. I have had one that could tell me more than half. Most of them can't tell me more than one or two. I hear a lot of about. Okay, well, we did about this. Okay, what's your percentage of material according to your average job? Well, it's about 35%. All right, let's put the pin to it. Let's take your last 30 jobs and figure it out. So he figured out and magically it's not 35, it's 37.5. So 2.5% higher than you thought it was. And if you do a thousand jobs for the year, that's some real money, right, that you're not accounting for and not realizing is going out the door that you could probably keep in the house if you just managed your buying a little bit better. Any questions about those average job numbers? All right, I promise you I'm leading you somewhere. All right, so managing by the numbers, learning from your numbers. What can I learn? Obviously, total revenue. Like I could tell you specifically to the penny on December 31st of each year, how much we had sold, like to the dime. Like, that's our number. Most of us don't know until two or three months later after all the dust settles, that, hey, I think we did this and that. And in 2017, how many of you are like, I know the exact number at the end of the year. Good, good. How many of you know the total gross profit accurately? Okay, I thought Chastity might. How many of you know total net profit? This is where we are at and this is what we truly made. After all expenses and everything else. This is money in our bank that we can count on. I wouldn't say spend it, but we can count on it. Don't spend it. You need the cash flow, actual overhead expense. What is your actual overhead? Does anybody know that one chassis? Do you? Real well, you got coached by us, so you got into the numbers. That's the hard one. And it's not all that hard really, once you put it right in QuickBooks. QuickBooks will tell you really quickly. Sales by trade. So how much are we selling by each trade that we're doing? Should we keep selling all these sales by rep. My material costs. So what are my total costs? My labor costs, which I could then get. My percentages as well of material and labor. Any trades to keep or eliminate. That's My evaluation, every year I remember we got it down to roofing, siding, gutters and windows. We were down to four. And I was adamant about cutting windows. I want windows out of here. And my partner is like, no, no, we can do the windows, we can do the windows. We went back and forth, back and forth. And he convinced me that we could handle the windows. First window job of the year. First window job of the year. He's the guy that measured, right? So he said he would take that over so we don't have any more. That mess up. Quarter inch off on every single window. Big did not fit. We just bought a whole house full of windows. Lost our shorts on the job. I said, how do you feel about those windows now? He goes, nobody's selling any more windows, so if you're not great at it, don't do it. Why? Why would you go out there and put that into your velocity measurement? Why would you say, hey, all right, we can paint your house, we can paint your Sheetrock, or you can do anything and what do you have to do, right? You're not gonna go paint it, right? You gotta go find somebody to sub. Is this sub somebody you work with every single week, every single day? Keep em busy? Not normally. You're on the hunt for one, right? Like, yeah, Mrs. Jones, we can take care of it. And I have a few guys in my Rolodex, but they're all busy. Then what do I do? I search for somebody else and I go, do you do good work? Yeah, I do great work. I send him out there and instantly I have a pissed off homeowner. And now I've got problems. It's not painted right. He doesn't show up, he doesn't finish it. Goes halfway through it and he's like, he's in the drunk tank, got stop for dui. Like I don't know these people. And it throws all these wrenches and it's stuff I cannot control. If I can't control it, I don't want to do it. So compensation, so I'm learning, is my compensation doing what I want it to do, which my compensation is all about. Incentive production. And what have you done for me lately? There's none of this work my way up, you know, because I've sold a certain amount with you and I keep getting a little bit more, a little bit more, a little bit more. And I finally get up to the upper echelon and I just stay there. Okay? That is like the opposite of what you should do. Because when you get somebody to there that highest commission rate, what can they do? They can sell less and make the same amount of money. You actually disincentivize them to sell higher volume. But if you say, hey, every month that you hit quota, I'm going to pay you this low percentage. Every month that you hit expectations a little bit higher number, I'm going to pay you a little bit more. And every month that you hit goal, which going above and beyond the call of duty, I'm going to pay you even a little bit more. And guess what? Next month it starts all over again. What do you think guys do at the end of the month, last week or so, what do you think they're doing? Man, it is like somebody just poured jobs into your office. They're trying to get them in to get under that wire to make sure that their commission percentage goes up on all the jobs they sold that month. It's not just a couple ones extra. It's every job they sold that month gets that extra percentage. And they push cost per job acquisition. I have never had a single client that can tell me that number cost per job. How much does it cost you for each job that you acquire?

Siding or roofing?

Roofing.

About $1,120 for a good solid lead that we're looking for. A siding job is more about 1500. We're swinging up.

Scary numbers, right? Like when you hear, like most of you would have said, it cost me.

100 bucks, almost 1200 bucks copy for a good solid roof leaf.

Depending on how you're doing it, right? That all has to do with how, like if that was my number, I'd probably be looking at some different ways because I want mine to be around 3 to $400 is about where I want to be on my cost per job acquisition. Because you think about it, you pay. How much do you pay for a telemarket lead? Anybody know? 125 bucks. So pay for two of those. That's 250. I close at a 50% close rate. What is my cost of acquisition? 250. Correct. It took me two of those to get one. And so when you start adding all those numbers up with all the things that you do marketing wise to figure out what your cost per job acquisition is. That's another one of those ones. You better put the mats around your chair so you don't break your head open when you like. Man, if I pull that up, Jeremiah, I'd have fallen over and cracked my skull and be dead right now. It would be bad. Right. All that expense that you've got into paying for your websites and the pay per click and the social media and all that, you got to figure all that stuff into all that marketing like comes into this big pie right here. And then you got your revenue. You divide your revenue into that piece of pie. It'll tell you how much it costs you per job to acquire a job. It's a simple equation, just most of us don't do it. All right, so why is it important to know your numbers? Well, it allows you to budget usually the first year I work with a company, I can't do a budget with them because everything's such a mess. It's like we don't even know where to start. We can start with some generalities, but once we kind of get things cleaned up that second year, we're able to kind of say, alright, we want to put 5% of last year's revenue on the budget for marketing. We want to put 2% of last year's budget or last year's revenue on bonuses and incentives. We want to put this much towards commissions. We want to put this much or sales, really this much. This much towards marketing, this much towards production. Okay. And start to create budgets for each one of your departments.

How do you do that portion? How do you figure? I know about the marketing percentage. How do you get into the other portions? Where do you start to.

You have to look at your expenses for those departments over the previous year, determine what percentage you spent on them from that previous year, and can you afford to spend more or less on them? So if my production cost me, let's say $500,000 to execute and we brought in $5 million, it cost me 10% to do it. Right. Do I need to go up in that to produce more? Like if I spend a little more, would we produce more or if I spent a little less, would I still produce the same? Those are the questions that you're asking yourself is like, are we as streamlined as we can possibly be? Can we trim our budget here and still do the same amount? Do we have too many people in this department executing that? Because I tell you right now, if it cost me 10% to do $5 million, I'd have a problem with that. It'd be a little bit high.

What do you do when you hire supervision to help?

It's part of it. It's all part of that production. It's got to be a part of that percentage. What's your, what percentage of your budget goes towards that aspect of Your business.

How many of those can you consider? Employee versus non employee? I don't want to get off.

No, you're good. If I was bringing on. And this really depends. There's so much that it depends on, like what state you're in, because the temperature of the government and whatever you're dealing with there is going to make a big difference. Your demeanor, mentality. Because if you're paying your sales guys off of gross profit and all that other good stuff, it makes sense to make that a job cost. Right? But if you're paying off a revenue, I would make that guy an employee. So he's tied into my company. I can tell him where to be and when to be there. So it depends on how you're operating your business, on which way you'd go with that. Does that make sense? Which is always the challenge. Like, I promise you, as a coach, it's a challenging deal. Clint brought it up last night. He goes. He goes, I see you go through all these things, showing us on the. All the different files. It's like, how much stuff do you really have? Like, you just go in there and you pull this one thing out of your bag of tricks for us. How much stuff is in there? And we figured it out. It's a little over 17,000 different documents and stuff that we've got in our Google Drive. And it really has a lot to do with what type of contractor are you? Where are you headed? What are your capabilities? What responsibilities can you handle? How willing are you to execute? More willing you are to execute. Man, I can give you the hammer, but a lot of guys aren't that way. And I got to give them small pieces at a time until we get there. A lot of people work with me three or four months, go through the year, come back, do three or four months again until we just kind of get their rhythm in. It works out pretty good. So it allows us to know how to budget it, knows where to cut, know where to spend more. Analysis of third party value. Troy left. That's good. All right. No, just kidding. So I've got to analyze my third parties. Anybody that's a third party to me that I'm using to outsource to. I have to decide if their value outweighs their cost or not. Most of the time it is. Sometimes it's not. It's not a hard thing to figure out. Forecast the future. I can tell you one that I found. Okay, so analysis of third party. One of my clients was outsourcing their claims not to anybody. Here it was an individual. And so I'm going through his numbers and stuff. We're trying to figure out. He's like, man, I didn't make as much last year on my jobs as I thought I was going to. I'm like, well, let's see, you know, send me your last 15, 20 jobs and I'll kind of go through them a little bit and see what's going on. And going through them. And going through them. I'm like, good Lord, what is this line right here is administration. So I called him. I was like, what is this? Oh, that's my claims person. I did the math on that. It's like 20%. He goes, yeah. I go, what? Good Lord, no wonder you're not making any money. She's making more money than anybody in the company. She didn't like it whenever I told him that, and things got adjusted. But you've got to now analyze the value of those third parties. Are they bringing you what you need or is it time to bring that thing in house? Because you've grown to a point to be able to handle it all right? So it allows you to forecast the future. So I can say based on this year and the year before and the year before that, looking at all that, this is what should happen this year. Okay? With that information, this is what should happen this year. You have the ability to know your cash flow. So those of you that don't understand, if you have $100,000 in your bank, that doesn't mean it's time to go buy a truck. That means that you probably have about 20% of that that might end up being profit. You've probably got some other jobs and stuff that need to get built. And if you got jobs outstanding, that $100,000 is going towards them, some shape, form or fashion, okay? So you need to know your cash flow and what that looks like. I'm not a financial wizard. I leave that up to CPAs and bookkeepers and stuff like that that know that information. But I know I need to know it. I know I need to know what does my cash flow look like. Because if I'm going to have a year where I'm going to expand, like a lot of you are here because you're trying to expand, right? I want to grow. Well, if I grow and I grow too fast, I don't have the cash flow to manage it. What happens to my credit lines? They get maxed out. What happens to. Number one reason. The number one reason companies go out of business is they Outgrow what they can cash flow. And you think, oh man, that guy's terrible. He didn't do those jobs. He's just a bad business guy is what he is. He wasn't truly a bad person in most cases. He didn't really run off and steal a bunch of money. He just spent dumb. He didn't realize he was stealing money because he thought because he had money in his bank that that money could be spent. It's just not the way it works. Understand? True profit. So at the end, after all expenses, what's your true profit? That should be at least 15%. At least that number, if not more. If you know what everything costs, you can measure its worth, what's it worth to you? And you can make decisions on whether you should continue to do that. Spend more, spend less, and really analyze your business in a way that most of us don't do because we're working in it all the time. We're working in our business, in our business. In our business, we can't do all that other stuff. We've got to get people to where they're running our business for us so we can actually work on the business. And this is the type of thing, once you grow big enough, you're allowed to get some time to really analyze your company. So measure what's important. Key performance indicators. So KPIs. You guys hear that term, it may have been glancing, blowing. You didn't know what it really was. But I need the key points in my process that identify success or failure. What are the key things from A to Z that identify success or failure? Measurement must be either individual KPI or linear. And so it's either one thing I'm measuring, that thing and how much time it takes, or if I'm measuring a whole process, it has to be linear. It cannot have a deviation point. And so my explanation, this process, let's see if I've got it. If it isn't linear, it's a new measurement. So if you're measuring along, let's say you start with marketing. Okay, so marketing is the first point in this that I'm going to measure. And then I've got leads, then I've got appointments or inspections, then I've got opportunities, then I've got agreements, then I've got adjuster meetings, then I've got bought, then I got wind, and then I got total revenue. Those might be how KPIs look across the board on a sales KPI. If at any point you think you can put supplement in there, you're going to have a difficult time doing it because that's not linear. You're doing supplements while all this other stuff is happening at the same time. Right. Most of you, that's happening on a whole different timeline and a whole different measurement. Because if I put it in the middle of this, I can't start any of this without that being done. And I do have a few companies that work that way. They supplement, get it all approved and everything before that job goes any further. But if at any point you supplement again, that has to be a whole different process that you're measuring for velocity. Does that make sense? Mortgage checks are the same way. So those are two of the main ones that live outside. So I'm going to give you a visual of it so it makes sense. Sample key performance indicators for a full process. So maybe sales, lead appointment, appointment to agreement, agreement to adjuster meeting, adjuster meeting to approval, approval to insurance paperwork, insurance paperwork to contract, contract approved for production. So that's what my sales KPIs might look like and what I'm going to measure time between. Okay, so from lead to appointment, how long is that taking? So in production it's like, so it's approved for production. So to ordered, once it gets ordered to delivered, delivered to job start, job start to completion, completion to final inspection, final inspection to invoice, invoice to paid in full. And then administration starts. Okay. And that last one could maybe be in administration, depending on your company. So paid in full, warranty got sent, warranty sent, and now this job is closed. It could be that simple. As far as the thing you're measuring, so you want to measure what is important and really what's important to you. These numbers can be all kinds of different things. I've seen a billion different versions. If you want my basic one, you just email me and I'll send it to you. Okay, so what can you measure overall? I can measure sales, production, administration. Oh, and supplementing. And I don't know why they're not showing up up there. Supplementation and mortgage companies. Okay. And anything else? I mean, you say this is my timeline from start to finish on this thing. I can measure that thing as long as I have those key points or key activity things that happen along the line. So now I've got to departmentalize my measurements. So sales department KPIs that determine success. So these are my activities that my sales guy might do. Okay, I think I talked about these. Revenue, average revenue, production KPIs that drive efficiency and Quality. So these drive that and determine success. Zach was in here. He's great like that. That was one of the best keynote things I've ever seen on sales. He's really good at it, understands. We had a long talk about it before he did it, and it's fantastic. And we have a lot of the same beliefs that if I can just get my people's minds right and let them know that, hey, I'm here to help you to be something special. These are the numbers that it takes to be that special person. But really and truthfully, I only care about one thing. I care about that this average revenue. You hit the number. I do not care what you did right here. I don't care if it took you 20 people to hit that number or five people or 100 people. You hit the number, I'm going to high five you until you did a great job. You don't hit the number. Yeah, then we're going to talk about this stuff. And where are you having your problem? Because wherever in here, he's not hitting his numbers. It gives me the ability to coach him and help him because that's my job. Because that's the way I hired him. And I told him from day one, my job is to make you the best that you can possibly be and, and to grow here at my company. So if you have a weak spot, we're going to fix it. Production KPIs that drive efficiency and quality. Jobs received, jobs approved, jobs rejected, Orders, jobs started, jobs completed past final inspection, jobs with a punch list. So there's quite a few there that I could measure to say, hey, where are our weak spots at measure? What is important. Departmentalizing your measurements. Administration. So data entry, accuracy, time to process paperwork, file review, permit filing, commission requests, warranty paperwork, spreadsheets, etc. All the things they're supposed to do. Reports and all those things I can measure when those things are supposed to be done on time. Workday streak. Workday streak is one I love. Like, that's a streak. And the longer you keep it going, the more bonuses you get as long as you're performing your duties correctly. Customer service. So reviews and referrals, communication on time, collections on time, customer surveys. I'll go back and give you guys an opportunity to take a picture of that if you want. So I'm saying these are the things that I would measure in each one of my departments. So common Insurance Restoration Company's key performance indicators. Supplements received, estimate created, submitted, received by insurance adjuster. Assigned approval, denial or readjustment. Adjuster meeting, final approval, and then paperwork received. And then when it comes. So that's a whole different timeline right there. Right? Like, all those things happen while we're doing a lot of other stuff. Then we got mortgage checks signed, mortgage affidavit signed, check sent to mortgage company, confirm receipt, check sent to the client, check received, client received check, and check turned in. So you see how all those things are linear and they follow this time. As long as they follow that timeline, I can measure the distance between each of those, and if I see a hiccup anywhere in there, I can start to ask some questions. Like this one right here. From final approval to paperwork received, it might even say contract, right? So final approval to paperwork receive, and then contract right down here. Well, if they got their paperwork, and this is a contract down here, and that's taking 12 days. What's going on? Why in the world does that take 12 days? Why in the world does that take three days? It should be, no, do not let them sit on that. Insurance, paperwork and money. Every day that's out there that you don't go and get them under contract fully is a day that somebody else can come in and say, I'll eat your deductible and steal it away from you. So those are the things I'm looking for. So this is what my velocity spreadsheet might look like. So there's my job info. Bart Starr, sales rep, is Ron Burgundy, Aaron Rodgers, and Tommy Callahan, my lead date and close date. So my close date, anything in the gray right here is automated. Anything here we're entering in. These are entries. So I have a data entry person, and that data entry person is just putting in the dates when a file comes.