Canadian Electrical Industry News Week

Shawn McCadden

 

August 31, 2017

By Shawn McCadden

Economic reports continue to forecast growth for the remainder of the year. For contractors, this is great news, but it can also present the challenge of scaling up to meet growing demand.

Scaling up requires not just hiring more workers and buying more material, but also adjusting your financial strategy to cover increased overhead expenses without hurting cash flow and profits. Here are three financial strategies for successfully scaling up in 2017 and beyond.

Scale up revenue while scaling down costs and expenses

A scalable business model allows you to increase revenue while holding both job costs and overhead expenses down. To be scalable, your financial plan should aim for gross profit margins of 40% or more (minimum of a 1.67 mark-up).

To achieve this level of gross profit margin, one fundamental strategy is increasing your revenue. The key to increasing your revenue is improving your marketing and sales. One of the most efficient ways to improve your marketing is by improving your positioning through a better unique selling proposition (USP): a brief statement that summarizes what you offer customers that your competition doesn’t.

To refine your USP, narrow down your ideal target market. For instance, is there a certain neighbourhood or a certain type of project that would be more profitable to specialize in? Research what your target market is most seeking in an electrical contractor. For example, are they price shoppers, or are quality or service bigger priorities for them? Craft your USP to emphasize what your target market most values, and make sure all your marketing material reflects your new USP.

Along with increasing your revenue, the other half of keeping a high profit margin is keeping expenses low. Many businesses fail because they can’t cover the cost of overhead. Finding ways to reduce the money you must pay for running your business is key to minimizing your expenses. Make time to research different organizational charts, industry best practices, project management methods, business management software, and employee compensation strategies based on performance. As the business grows, investing in these areas now can help your business reduce overhead through efficiency of operations as well as economy of scale.

Maintain efficiency through outsourcing

Outsourcing is proven way to cut labour costs both in the field as well as the office. Many successful large companies outside our industry have used outsourcing effectively to streamline their labour expenses. For instance, Google relies heavily on revenue from pay-per-click advertisers who pay to have their results featured in search engine rankings. Maintaining its advertising revenue requires a large sales support team, which Google has outsourced. Amway is another company that outsources its sales, relying on a distributor model to promote direct sales. In our industry many contractors already outsource activities such as building permit procurement, sales, lead intake and prequalification, and specialty trades.

As these examples illustrate, you can outsource functions that are part of your core business if it is more efficient to delegate them to specialists than to maintain in-house talent. With the right plan and system you can also easily outsource routine peripheral functions such as bookkeeping and payroll.

Shawn McCadden is a consultant, educator and speaker who offers business consulting and coaching services for remodelling business owners who want more for and from their businesses and their lives. He also consults with construction-related product manufacturers and suppliers, helping them understand, find, educate and better serve remodelers. Check out Shawn’s website http://www.shawnmccadden.com/ and blog www.shawnmccadden.com/Subscribe-to-The-Design-Builders-Blog.

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Schneider Electric

For the eighth year in a row, Schneider Electric, the global specialist in energy management and automation, participated as a proud sponsor in the 17th annual Tremblant 24h. With support from family, friends, employees, and the company, Schneider Electric Canada employees raised funds and presented a cheque for $101,840 to support local children’s causes. 

The company was one of 366 teams participating in this year’s events, which took place December 8 to 10 in Mont-Tremblant, Québec.

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EFCElectro‐Federation Canada (EFC) and Cámara Nacional de Manufacturas Eléctricas (CANAME) of Mexico, have submitted joint recommendations to their respective governments to safeguard future trade in North America.

The recommendations call on the strong need for governments to retain, modernize and improve the North American Free Trade Agreement (NAFTA) in order to increase market access, reduce business costs and improve global competitiveness.

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Now in its 24th edition, the 2018 Canadian Electrical Code, Part I includes a number of significant updates and changes to better help electrical workers in the safe maintenance of electrical equipment and create safer electrical installations.

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 Sean Freeman

Sean Freeman is a vibrant, enthusiastic and selfless individual who has taken his trade expertise beyond that of a simple career. Not only is he a Master Electrician but he has traveled around the world as an electrical technician delegate with the Red Cross Emergency Response Unit. His skills are a vital part of emergency response and disaster relief.

In 2013 Sean responded to Typhoon Haiyan in the Philippines. In 2014 Sean spent almost a month in Kenema, Sierra Leone working at the Ebola Treatment Centre. There he was responsible for ensuring electricity and clean water were available, and worked to strengthen the infrastructure of the facility. 

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