CHANGE THE WAY YOU ACT, WORK, & THINK.

 
BE HAPPY…
​.(the way you ​
ACT)​
BE PERSISTENT…
​(the way you ​
WORK​
)
BE CREATIVE…
​(the way you ​
THINK​
)
 
 
Before you embark on the next 28 days, let’s examine a few terms that may
be familiar to you and adjust the way we will use them. In order to be
successful in your business and in your life, you need to ACT, WORK, and
THINK differently than the rest of the world.

BE HAPPY
People view happiness as something they feel. They think happiness is an
emotion. I don’t buy that, and neither should you. Happiness is a choice.
Happiness is an action. Successful people choose to look within, evaluate the
situation, and take action. Happiness isn’t something you find. Happiness is
something you choose. Take action and ​
BE HAPPY
​.

BE PERSISTENT
Don’t stop. Don’t give in. Do the hard work that produces results. Success is
rarely achieved by a single massive action. Successful people become so
because they buckle down and show up EVERY. SINGLE. DAY. They practice
doing the little things, the things that require discipline. When you are faced
with a mountain to climb, start that journey with a single step, and follow it
with another, and another, and another. Do the work and ​
BE PERSISTENT​
.

BE CREATIVE
Creativity is a funny thing. People associate creativeness with being an artist
or designer. Creativity is much much bigger than that. If you can think your
way out of a problem, then you are creative. If you can make sense of the
chaos, then you are creative. Some creative people use paint and canvas to
express their talents, but your creativity is expressed by your service to your
clients, the work you perform, and the way you run your company. Think
differently and ​
BE CREATIVE.​

The work you perform over the next 28 days will streamline your business,
reduce your paperwork, and provide you with new information. You will gain
a greater perspective on potential possibilities and how to achieve your goals.
This action guide will take you step-by-step and teach you the tools and
techniques your business needs to increase profitability and enhance
productivity.
 
   
COUPLE THINGS YOU NEED TO KNOW:

1. ​
This ebook is a companion action guide to my online course ​
The SKILLED
TRADE | SOUND BUSINESS Project​
(release date June 2016). Throughout T
​ ​he
Paperwork Punch List​
, I make reference to specific modules within the online
course so you can take a deep-dive approach to making the techniques I teach
work for your business. If you are interested in taking the online course,​
go
​
here​
and sign up for ​
​ The SKILLED TRADE | SOUND BUSINESS Project
(release date June 2016). That said, I’ve written this action guide in a way that
you can still get incredible value and results by taking the steps without taking
the online course. My objective with this guide is not to sell you an online
course, but to help you enhance the way you run your business. So read on
and have fun!

2. ​
I recommend you print this action guide and take it one day at a time,
checking off your progress as you go. Sure you could read this action guide
real quick today and assume you know it all and move on with your business
and your life as usual - ​that method won’t make any lasting change​ . Want to
really start significant change in your business and your life? Really? Commit
to actually completing the assigned tasks, study the methods I present, and
follow the examples one day at a time. Try it out. If you really do the work,
things will start to happen. This action guide was based on my nearly 20 years
experience in construction related businesses and research I performed with
various professionals in the the skilled trades and construction industries. If
you downloaded this action guide from my​ website​
​ , I’ll send you follow up
emails to help you along the way. If not, you can sign up​ here​
​ (you can opt
out anytime).
Businesses, especially those in and around the construction industry, can be
exceptionally overwhelming. Many of you are in this very moment -
overwhelmed beyond description. To you, I offer my most sincere empathy.
Please rest assured that you are most certainly not alone, and trust me when I
tell you that there is another way, a better way, to run your business and live
your life.

Most professionals in the trades and construction get into the business
because they love making things with their hands. No one goes into this
business because they say, “I love doing paperwork.” Doing the paperwork
creeps up on you, gets pushed aside for more urgent tasks, or in most cases, is
generally ignored until it turns into an emergency. Operating in this way
produces anxiety, worry, fear, procrastination, confusion, lack of direction,
and, in some cases, shame.

This constant state of emergency is no way to run a business and no way to

live your life. You deserve better, and there is a way out.

The trick is to systematize your approach to the things that make your
business run and to format these systems so you can utilize the power of the
data within your business to propel it in the direction you intend.

● punch list ​
- noun

a list of unfinished matters that require attention.

(Dictionary.com Unabridged, Based on the Random House

Dictionary, © Random House, Inc. 2016)
You don’t like doing paperwork but it requires your attention. Therefore, I
designed ​
The Paperwork Punch List​
to streamline your construction business in
28 days. Over the next 28 days, as you persistently work to take your
business to the next level, you will uncover what is working and what is not.
This clarity and sense of direction will focus your business’ most valuable
assets - your time and energy.

WHY 28 DAYS?

1. ​
We live our lives in a weekly cycle. Work starts on Monday and ends on
Friday (at least for people that don’t own a business). The weekend starts on
Saturday, and by Sunday evening, we are thinking about all the things we
have to do on Monday morning. You are going to work this into your weekly
cycle because weeks turn into months. Months turn into years, and years
turn into careers.

2. ​
Research indicates that consistent, daily action toward specific ends in
mind, over an extended period of time, actually creates lasting change in the
chemistry of the brain. Neural pathways that affect thought patterns and
behavior are altered by consistent focus on and practice toward desired
progress and change. Thus, consistent, focused attention on intentional,
positive and productive thought patterns and behaviors helps our brain
replace old, potentially destructive, thought and behavioral patterns with
healthy, new ways of thinking and being.

You need to be willing to change the way you act, work and think over the
next 28 days. If you tried to implement all these tactics in a shorter time
period, you wouldn’t reach the depth required to make a lasting change. If the
time period was extended, then you might not think you have the time to
commit to completing this action guide.

Four weeks. If you focus, then that’s all it will take to make a change. You can
focus for 28 days.

The action guide is split into (4) one-week modules. You start each module on
a Monday and complete it on Saturday. Sunday is reserved for reflection,
celebration, and restoration before you start the next module. Use this day to
celebrate the small victories along the way. Plan a date with your significant
other, start reading that book that is collecting dust, talk a walk, or just quietly
visualize what you are going to achieve each week.

You can do this. The next four weeks will fly by. You might as well make
them count.

OVER THE NEXT 28 DAYS:

● You will increase the value of your time and change your view of FREE
ESTIMATES
● You will understand the power of the written word
● You will start providing written proposals for all your work
● You will use learn new online tools to make your documentation control
more efficient
● You will learn the difference between Markup and Margin and how to
use them
● You will develop Project Ledgers to track your job costs
● You will learn how to easily track your labor costs per project
● You will start developing your own estimating system
● You will learn how to tie your project ledgers to your invoicing
● You will learn how to develop a billing summary for each of your
projects
● You will develop an invoicing system that ties to your proposals
● You will start developing labor budgets
● You will start projecting a budget for next quarter, next year, and
beyond
● You will face obstacles
● You will face successes
● You will get clarity
● You will get real
● You will get things done.
● You will change your future.

[ BE HAPPY. BE PERSISTENT. BE CREATIVE. ]

WEEK 1...Let’s do this thing!

. DAY 1 (Monday) - ​
the power of the written word

Your work is only as good as your word, and the words you communicate to
your clients are best understood if they are written down. Taking the time to
write out your proposals will clearly define the scope of your work, set the
price of the work, and communicate the quality you are going to achieve.

If your customers are mainly other contractors or construction professionals,

then communicating t​
he BIG THREE​
(Scope, Price, & Quality) comes naturally.
You speak the same language. You understand each other and what is
expected. But how many times have you completed your work, only to find
out that the contractor expected something more or different? Probably
more than a few times. Each of these instances costs you money and, even
worse, reputation. You know what you said, and you know what he said.
Without a written agreement or clearly defined proposal to reference, it’s a
“he said/he said” situation. You can avoid this awkward and costly situation
by simply making sure you send the contractor a written proposal for each
and every project. Even though you may have a generic sub-contractor
agreement that covers most of the legalese and defines your working
relationship, you must have a project specific proposal that clearly defines
your work.
If your customers are homeowners or not construction professionals, then
communicating ​
the BIG THREE​
(Scope, Price, & Quality) can be more difficult.
You DO NOT speak the same language and expectations can be all over the
place. You need to educate your clients on your services and how those
services will be performed. This takes more time and effort, and you should
be charging them for this additional level of service. You are providing them a
level of service that your competition is not. When you take the time to
prepare a written proposal for these types of clients, you are ensuring that you
and your clients are on the same page before the work begins. When things
change (and they will change), you have the ability to reference the written
proposal prepared for the project and discuss how the change affects t​
he Big
Three​
.

TASKS FOR DAY 1:​

(take about 30 minutes to work through these tasks)

Use an existing or upcoming project as an example for today’s tasks.

You will write out a proposal that communicates ​
the Big Three​
. Don’t worry
about defining all the details. You can focus on just the bullet points.

❏ Write out the Scope: define the major tasks of the project (lump the
scope items into sections).
❏ Set the price for each section.. Do not show line item pricing for the
individual tasks.
❏ Communicate the Quality for the project.
❏ Commit to preparing a written proposal for your next potential project.
NOTE: Don’t worry if you don’t have a system/software for preparing a
written proposal. We will get into that later this week. Just use what is familiar
to you now, whether that is a word processing document, a spreadsheet, or
even a piece of paper. The point is to get your proposal written down.

. DAY 2 (Tuesday) - ​
free estimates are not free

Let’s start off today by defining a couple terms.

. Estimate - ​
a guess based on experience

. Proposal/Bid/Quote - ​
a written document that specifies ​
the Big Three

Many professionals in the trades offer FREE ESTIMATES. They think this
method is so effective that they plaster their trucks and shirts with this
message.

But how many times does a FREE ESTIMATE turn into actual business?
How many FREE ESTIMATES do you have to give before you get a paying
customer?
How much time do you spend each week giving FREE ESTIMATES?

Seriously, answer those questions.

 (If you are unsure of what you are currently charging is enough to make a
profit for your work, then let’s talk about how the online course the SKILLED
TRADE | SOUND BUSINESS project can help you. S
​IGN UP HERE​
for the
online course).

You know what a project will generally cost based on a description of the work
and your experience. You can provide a budget range to your potential client
based on the information they give you. You should be able to do this over
the phone or through email. The estimate you provide should be general in
nature and definitely not written down. Remember, it’s just a guess based on
your experience. If you write it down without knowing ​
the Big Three​
, then you
are providing a proposal for work that has not been clearly defined. This will
cost you time now and money later, and since TIME is MONEY...this will cost
you money now and money later.

Producing FREE ESTIMATES does take your time. Who pays for the FREE
ESTIMATES?

ANSWER: The clients that decided to hire you.

If you use FREE ESTIMATES as a way to gain new business, then you are
charging the very people that you should be rewarding for hiring you. You
reward them with exceptional service and by exceeding their expectations.
Providing exceptional customer service does take additional time. That’s great
if you had extra time, but all your extra time is being spent on running around
giving out FREE ESTIMATES.
You can’t afford to give FREE ESTIMATES and exceptional customer service to
your clients. FREE ESTIMATES cost you time. Time is Money, therefore, FREE
ESTIMATES are not free.

I know what you are saying,

“I shouldn’t give FREE ESTIMATES?! You’re crazy. No one will pay for
an estimate!”

I am not saying that you should charge for estimates. I am saying that you
should only provide an estimate if you have enough information to make a
guess based on your experience. Getting that information from your potential
clients should be quick and easy. If they can give you the information you
need and they agree that your estimate falls within the range of their budget,
then you can discuss how you can work with them to prepare a proposal.

If they can’t give you the information you need (or are not willing to), then
they are just “kicking the tires.” They are not the type of clients you want. Let
your competition have them. You want to focus on clients that value your
experience and your time. These high value clients will gladly pay you for your
time to prepare a proposal to ensure that their projects are successful.

The difference between an estimate and a proposal is the qualification of the

client. If you have qualified the client, then you have discussed t​
he Big Three
and agreed how best to proceed to the proposal phase. You have eliminated
the ​
prospecting​
clients and are working on serious buyers of your product.
Qualification of the client increases your closing rate by allowing you to move
beyond ​
the Big Three​
and your value. Learn to sell your value, and you’ll never
compete on price again!

(If you are interested in learning how to develop a system for getting your
high value clients to pay you for your proposal, then let’s talk about how
the online course the SKILLED TRADE | SOUND BUSINESS project can help
you. ​
SIGN UP HERE​
for the online course).

TASKS FOR DAY 2:​

(take about 30 minutes to work through these tasks)
❏ Write down 5 questions you will ask your next potential client that will
help define ​
the Big Three​
.
❏ On your next sales call, commit to asking the client, “What’s your
budget?” If they say they don’t have one, then give them a high guess.
They do have a budget, and you need to find out what it is. If you can’t
get them to be honest with you at this stage, then this is a client you
don’t want.
❏ Based on the last month, calculate your Closing Rate: # of estimates or
proposals accepted/total # of estimates or proposals produced.
❏ Write the statement below on piece of paper and post it where you will
see it everyday the rest of the week.

“FREE ESTIMATES ARE NOT FREE.”

. DAY 3 (Wed) - ​
using Google Apps to manage your documents

Written proposals are a great tool to communicate ​

the Big Three​
to your
clients, but you need a way to manage and organize them within your
company so that they are readily accessible, up-to-date, and easy to use.

Hello Google Apps.

You are probably familiar with the search engine Google, and you may use a
gmail address for your personal and/or business email. Did you know that
your gmail address is just the tip of the iceberg as far as the products that
Google offers?

You can use the power of​

Google Apps for Work​
​ to manage all your business
documentation and more. We are only going to focus on a few Google Apps
products today, but over the next few weeks you should explore Google’s
other products and customize them for your business.

NOTE: If you are currently using a gmail address for your business email, then
you already have (free) access to the products we will discuss here. If you
don’t have a gmail address, then you can sign up for one​
here​
​ . It’s free and
easy. Before you do that, I recommend you investigate using Google Apps for
Work to host your email and other work related products we discuss in this
action guide. You will pay a fee for each user on the account, but well worth it
for all the products to which you have access. One major advantage of using
Google Apps for Work is that you can setup your email to look like this:
“your_name​your_domain.com”
@​
Here’s an article on how to setup Google Apps for Work.

Google Sheets​
is a spreadsheet program (similar to Excel) that I have used for
many years with many businesses to track, record, and analyze all the number
crunching required to run a business.

Google Docs​
is a word processing program (similar to Word or Pages) that you
can use for all your word processing needs.

Google Drive​
is an online storage area for all your files.

All of these Google products are cloud-based and sync with your mobile
device so you can access this information where ever you have internet
access.

If you don’t want to use Google Apps for Work, then you need to make sure
that the products you do use have the ability to be stored in the cloud and
backed up regularly. You may have an existing system of spreadsheets,
documents, and computer based storage that serve you well. If so, great. If
you need to start a system, I recommend that you familiarize yourself with
Google Apps for Work and consider using it going forward.

This action guide will teach you how to setup a custom estimating system and
written proposal for your business using Google products. You will need to
adjust the steps outlined to work with the system you use.

TASKS FOR DAY 3:​

(take about 30 minutes to work through these tasks)
❏ Investigate Google Apps for Work and determine if it is right for you
 ❏ Watch two videos online about Google Sheets and determine if it’s right
for you (just search “google sheets for beginners”...you’ll find plenty of
info)
❏ Watch two videos online about Google Docs
❏ Watch this video on​
Google Drive
​

. DAY 4 (Thursday) - ​
developing your own estimating system

Your estimating system is the heart of your documentation control. How well
you manage your estimates and proposals determines the effectiveness of
your project management. Your ability to manage projects effectively
enhances your profitability.

You may already have an existing estimating system, but based on the
research, this is most likely a pain for you. Your estimating system produces
one thing - a number. Perhaps that number is a price, or perhaps that
number is a quantity. You will learn how to tie your estimates and proposals to
your project ledgers. You will then integrate your project ledgers with your
invoicing. Your invoicing system will then inform your budgeting. Once you
have a clear budget for your business then you can focus on your profits….but
first things first.

Many estimating software packages do a great job at producing accurate

estimates. They offer professional looking proposals and provide you with a
deep database of pricing information. But are you able to use all the features
that come with these systems without a steep learning curve? Are you able to
customize them to suit your specifics needs? Do they work as well with small
projects as they do with large complex ones? In my experience, these
estimating software packages are overloaded with options for every possible
scenario. You can easily get lost in the matrix. Let’s simplify the estimating
process and develop a system that you can use every day and build upon as
your company grows.

If you are currently using an estimating software that serves your needs, then
great. Stick with that system if you want. Make sure that it meets the criteria
that we will review today. If it doesn’t, then consider simplifying your work
and try this method.

Ok. Let’s get started.

I have published a sample Project File Template to the web. Click​

here​
​ to
open a web page containing the template, or copy and paste the link below
into your browser:

http://bit.ly/PPL_Proposal_Template

We will be working with this file for several days. You should bookmark the
link above in your browser so you will have it easily available for reference.

This file is just an example to show you how your custom Project File will look.
This file is a VIEW ONLY file, but you can easily recreate this file in your
spreadsheet.
 (If you would like full access to the Project File Template, as well as the
other templates we discuss in this action guide, and how to customize the
templates, then let’s talk about how the online course the SKILLED TRADE |
SOUND BUSINESS project can help you. ​
SIGN UP HERE​
for the online
course).

The Project File Template contains 3 tabs: PROPOSAL, BREAKDOWN, and

LABOR BUDGET CHECK.

The PROPOSAL tab is the finished project proposal that you will send to you
client.

The BREAKDOWN tab is where you will build your custom estimate.

The LABOR BUDGET CHECK tab is where you compare the price and
associated labor budget produced by your estimate with your actual labor cost
and price to verify that your estimate is accurate.

The purpose of any estimating system is to accurately and clearly define the
scope of work and calculate the value of that work based on the conditions for
that particular project.

Let’s start with defining the scope of the project.

(I have used a simple interior trim project as the example for the Project File
Template, but you can apply this method to any trade or construction
business.)

TASKS FOR DAY 4:​

(take about 30 minutes to work through these tasks)
 On Day 1 of this action guide you wrote a Scope for an existing or
upcoming project.
❏ Create a spreadsheet with the 3 tabs: PROPOSAL, BREAKDOWN, and
LABOR BUDGET CHECK
❏ Enter your Scope items into the first column on the BREAKDOWN tab.
❏ What assumptions have you made in developing this scope? Write
them down. If you think that these assumptions should be listed, then
include them in your scope items. For example: the Crown is listed as a
1-piece crown and the base is listed as a 2-piece crown.

. DAY 5 (Friday) - ​
determine your Unit Price or HR/Unit

Depending on the nature of your business, you may price your estimates
based on Unit Pricing or Labor Pricing. If you use Unit Pricing to create your
estimate, then the estimating process is simplified.

You take your Unit Cost X your Markup to determine your Unit Price. This
method works to produce a price, but you won’t necessarily be able to
determine your production rates or Labor Budget. If you pay your employees
based on Units installed, then quality goes out the window.

If you have employees, then you need to know how to estimate their
production time for each Unit in order to achieve the highest profit on your
project and accurately estimate your production schedule.
 (If you are a General Contractor and exclusively use sub-contractors, then
you can still use this template to produce your estimates and proposals.
You will need to modify the format of the template slightly, but you can still
achieve the same results.)

Let’s take a look at some of the HR/Unit rates listed in the template.

For example: it takes 1 employee 2.5 hrs to hang and install casing on a Single
Interior Door and 3 hours to do the same for a Double Door.

I would bet that you have a pretty good idea how long it takes for a person to
install each of the items on your Scope. If you have never thought about
estimating in this way, then start developing a list of standard items and the
HR/Unit rates associated with these items. The more you practice thinking
about the time it takes for one person to install an item, the easier estimating
will become. Start thinking of items in your scope, and ask yourself, “How
long will it take one person to _________?”
NOTE: In our example, you will see that the HR/Unit for “Install Crown” is
0.050 HR/Unit for 1 person. Installing Crown is usually a two-man job. The
estimate shows this - 0.050 for 2 people (Crew Size = 2). Depending on how
you build your standard Production Rates, you can input the actual number of
persons it takes to perform a scope item. You can also adjust the Production
Rate to include a 2 person team.

Example: 0.050 HR/Unit x 2 Crew = 0.10 HR/Unit x 1 Crew

If you convert all your Production Rates to “1 Crew” rates, then you will be
able to move very quickly through your estimates. You will also have fewer
cells to change each time you start a new project file.

The template calculates the number of Hours for each line item by
multiplying the Production Rate by the # of Units.

TASKS FOR DAY 5:​

(take about 30 minutes to work through these tasks)
❏ Develop a Production Rate List for all your Scope items in HR/Unit.
❏ Practice converting any existing Production Rates that include multiple
crew members into a Production Rate that is the equivalent on a
1-person crew.
❏ Practice converting any existing Unit Costs you into an HR/Unit
Production Rate.

. DAY 6 (Saturday) - ​
defining the base labor rate

You have defined your scope. You have determined the quantities of those
scope items and assigned a Production Rate to each of them. Now if you
apply a Labor Rate to the Production Rate, you will have a value for the work.
This method of estimating uses a Base Rate (see the “Base Rate” of $40.00 at
the top of the page in the BREAKDOWN tab.)
The Base Rate is the hourly rate you would charge to a client for 1 hour of work
“in a perfect world.” Monday, we will discuss how nothing you do happens in
a perfect world, and how you will account for that in your estimate.

The Base Rate is not your costs per hour or your average wage paid per hour
to employees. The Base Rate is the number in your head that you use to
quickly calculate an estimate on the fly when someone asks you, “How much
is that going to cost?”

You do it all the time. When asked that question, you pause and think:

“Well...that’s going to take 3 guys, 4 days to do...and I need to charge at

least ​
$50.00 per hour per guy​
...so I’d say....3 guys for 8 hours a day is 24 hours a
day times 4 days is 96 man-hours times $​
50 per hour​
…...That’s going to be
about $4800 for the labor to do that work.”

The $50 per hour is your Base Rate. It’s not what you pay Bill, John, or Sam.
It’s not exactly your cost for those 3 guys plus your markup. It’s probably
slightly more than that exact number. It’s your gut feel for what you need to
charge to make the profit you need to make. For just about anyone in the
skilled trades that does high quality work and really serves their clients with
superior customer service, I would imagine that Base Rate is around $40.00
and up.

(If you need help in determining your Base Rate and other costs for your
estimates, then let’s talk about how the online course the SKILLED TRADE |
SOUND BUSINESS project can help you. ​
SIGN UP HERE​
for more
information.)
The Base Rate for the BREAKDOWN tab in the template is $40.00. You can
see that Base Rate is used throughout the estimate, and I suggest you
reference that cell throughout your estimate as well.

The template calculates the Subtotal for each line item by multiplying the
Crew Size by the HOURS and the Labor Rate (which is the Base Rate).

TASKS FOR DAY 6:​

(take about 30 minutes to work through these tasks)
❏ What would you charge for 3 employees to do 4 days of work for a
client if you were to bill them hourly for the work?
❏ ANSWER:___________________
❏ What is your profit margin for those 3 employees for that time frame?
(Assume they are not all your highest paid employees.)
❏ ANSWER:___________________
❏ Determine the Base Rate you will use for your estimates.
❏ ANSWER:___________________

. DAY 7 (Sunday) - ​
reflect on what you’ve learned

Congrats!

You made it through the first week. Not only have you started to design your
own custom estimating system, but also you have started to act, work, and
think differently. These small changes each day add up over time and before
you know it, you will be viewing your work and your business with a refreshed
sense of clarity. Don’t give up. Keep going. You will be glad you did.

You have only two tasks for today, and they are easy ones.

TASKS FOR DAY 7:​

(take all day to do these 2 tasks. You deserve it.)
❏ Relax. Don’t worry if you haven’t mastered the creating your
spreadsheet or fully understand all the technical stuff covered this week.
The information isn’t going anywhere. Review as needed. Just relax
today.
❏ Go do something you enjoy. Talk a walk with your spouse or play with
the kids. Eat some great food or watch a movie. We’ll get back to work
tomorrow. Go have some fun.

[ BE HAPPY. BE PERSISTENT. BE CREATIVE. ]

WEEK 2...completing the estimate & proposal

. DAY 8 (Monday) - ​
there’s no perfect world

On Day 6, you determined your Base Rate. This is the amount you would
charge per hour for labor in a “perfect world.” You know that there is no such
place. You need to make sure you factor that fact into your estimates.

In the Project File Template on the BREAKDOWN tab, I estimated that it takes
1 person 2.5 hours to install and case a Single Door or 25 man-hours to install
and case 10 Single Doors. But that is just the install. That does not account
for scattering those doors throughout the house, or the setup and breakdown
required. It doesn’t include the carpenter being pulled away for a site meeting
from time to time, or the fact that the door may have some particularly
difficult aspect to the install. You can come up with an endless list of things
that will pull your employees away from the task at hand.

It’s these little things that eat away at your productivity and ultimately, your
profits. You must account for them. You can easily do this by applying
Productivity Factors to all or portions of your scope items. For simplicity sake,
the template shows the Productivity Factors across the board applied to all
items. You can develop your own factors for the scope of work you usually
perform and apply them in any way you see fit. This is a very quick and easy
way to develop an extremely accurate proposal price and labor budget.

Once each factor is determined, enter the factor in the cells at the top of
Productivity Factor field. You can quickly set up a formula in each line item
row to calculate the amount that is added to each line item for the applied
factor. If you don’t need a certain factor for a project, then just make the
factor 0%. In the template, I use a Travel Factor of 0%. This simply means
that the project is located within the normal radius of our work, and I don’t
have to reimburse any employees to travel to the job site. This factor may be
significant if you have to pay employees to travel day-to-day to a job site.

Even though this part of the estimate only calculates the Labor Price for the
estimate, the overall price of the Labor does include the cost of supplies that
are expected as part of a Labor Price. This would include fasteners, adhesives,
saw blades, and other consumables.

Once the Productivity Factors are determined and the additions are
calculated, then the template calculates the ​
Total​
for each line item.

All the line items are then summed for each Phase of the Work. You now
have a custom estimate prepared with two of ​
the Big Three​
documented.
(Don’t worry. We will get the third of t​
he Big Three​
in a couple days.)
TASKS FOR DAY 8:​
(take 30 minutes to complete these tasks)
❏ You don’t have the luxury of working in a perfect world. Make a list of
the items that affect your productivity.
❏ Pick 4 or 5 of these items and assign a % to add to your estimate.

. DAY 9 (Tuesday) - ​
determining your labor budget

Your custom estimate is complete. Before you prepare your proposal and
send to your client, you need to do one last check. You need to check that
your estimate price and Labor Budget will work together.

The reason you established a Production Rate and a Base Rate is so that you
can determine your Labor Budget based on the Productivity Factors you
applied. (See...it all ties together.)

Here’s an example:
We said that it takes 25 man-hours to install 10 Single Doors in a perfect
world. We accounted for the fact that we don’t live in a perfect world and
added Production Factors to that line item value. The value was determined
on a Base Rate of $40.00/hr. After we applied the Production Factors (which
included Supplies and Travel), we have a value of $1,375.00.
In order to determine the Labor Budget for that line item, we want to make
sure that we DO NOT include the Supplies or Travel Budget. The total
excluding those items is listed in the column “Total w/out Supplies & Travel.”

To determine the Labor Budget for that line item, the template divides the
“Total w/out Supplies & Travel” by the Labor Rate for that line item. This give
us a Labor Budget for that line item of 33.75 hrs.

Although we estimated 25 man-hours to install those 10 Single Doors, it is

really going to take 33.75 man-hours to do so. We need to make sure we are
covered for that additional time in our proposal.

The template calculates the Labor Budget for each line item and sums them
up at the bottom. For this template example that total is 1167.8 man-hours
(scroll down to the bottom of the page to see the total).

Click on the LABOR BUDGET CHECK tab at the top of the page.

This is where you check and make sure that you are charging enough for the
scope of work to make the profit you need for the personnel you assign to this
job for the estimated production schedule (Labor Budget).

Input the Total Labor Budget from the BREAKDOWN tab in Line (1) on the
Labor Budget Check tab and follow the steps to the right.
Line (6) is where you input the total hourly wages for the size of crew that will
be assigned to this project. In this example the $79.00/hr total wage is:

$79.00/hr = ($25+$20+$18+$16) per hour ← 4 people at those hourly wages

Line (7) is where you assign the Labor Burden and Markup you require to
determine the Price for that crew per hour.

If you are unsure how to apply the correct Markup to achieve the proper
Margin you need for your business, meet me back here tomorrow. We will go
over those subjects in great detail.

If Line (13) or Line (14) is within an acceptable range for you, then you have
completed your custom estimate and are ready to prepare your proposal. If
these numbers are negative, then you may need to adjust elements within the
BREAKDOWN to reconcile these numbers. (See Notes 1, 2, and 3 at the
bottom of the LABOR BUDGET CHECK tab).

TASKS FOR DAY 9:​

(take 30 minutes to complete these tasks)
❏ Determine your Labor Budget for your project for all Phases.
❏ Input your Labor Budget number into the LABOR BUDGET CHECK tab
in Line (1)
❏ Follow the steps to complete the LABOR BUDGET CHECK.
 ❏ Adjust your BREAKDOWN items as needed to make the LABOR
BUDGET CHECK work.
❏ Take note of the items that needed to be adjusted. If you feel confident
in your Productivity Factors and Production Rates, then you most likely
need to raise your Base Rate. In most cases this is the fix to make the
numbers work out. And if you think about it...this gives you permission
to finally raise your prices. You’ve been thinking about doing it for a
long time, and now you have the evidence that shows you have to in
order to stay in business.

. DAY 10 (Wednesday) - ​
understanding Markup and Margin

We have learned how important your estimating system is to the operations

of your business. But all the fancy estimating methods, tricks, and rules of
thumb do not compensate for a deep understand of your Markup and Margin.

Markup and margin are the most important numbers you need to understand
in running your business. The reason we are going to spend time on them
today is because most people use the terms incorrectly.

Markup: the amount by which you add to your COSTS to

determine your PRICE.
 Margin: the amount of profit realized on a project by subtracting
the COSTS from the PRICE

Both of these numbers are usually expressed as percentages, and the biggest
mistake people make is using the terms interchangeably.

Here’s an example: (see if you catch the mistake)

Project COSTS: $100

Desired MARGIN: 20%

“I know that 20% is what I should be making on my projects, so I need to

add 20% to my COSTS to get my SALES PRICE.

$100 (COSTS) x 0.2 = $20

(this is the amount I add to my COSTS to get the SALES PRICE)
Or
$100 (COSTS) x 1.2(MARKUP) = $120

SALES PRICE = COST + Money I want to make = $100 + $20 = $120

If my SALES PRICE is $120 and my COSTS are $100, then I just made a
20% PROFIT.”
Did you catch the mistake?

The PROFIT is $20. (SALES PRICE - COSTS)

The PROFIT MARGIN is S

​ALES PRICE - COSTS = $
​120 - $100 =
​16.67%
SALES PRICE $120

Wait! I thought I was making 20% on this job?!

The mistake happened in this sentence:

“​
I know that 20% is what I should be making on my projects, so I need to add
20% to my COSTS to get my SALES PRICE.”

Here’s the correct version of the statement:

“I know that 20% is ​

the MARGIN​
I should be making on my projects, so I
need to ​
apply the correct MARKUP to my COSTS​
to get my SALES PRICE
that realizes that MARGIN.​
”

Based on the statement above, here’s what the equation should be for a 20%
PROFIT MARGIN:

COSTS = $100
PROFIT MARGIN = 20%
SALES PRICE = ______?
MARKUP = ______?

COSTS x MARKUP = SALES PRICE so that ​

SALES PRICE - COSTS​
= 20%
SALES PRICE

But wait! I don’t know my SALES PRICE or my MARKUP.

Correct. But you do know your COSTS and your MARGIN. So let’s start with
what we do know.

SALES PRICE = C
​OSTS = $100 = $125
(1 - MARGIN) (1 - 0.2)

MARKUP = S
​ALES PRICE = $125 = 1.25
COSTS $100

Therefore, in order to realize a 20% MARGIN on a COST of $100, I need to

multiply my COSTS by 1.25. That puts my SALES PRICE at $125.

In the INCORRECT example above, if I only add 20% to my COSTS, then I will
only realize a PROFIT MARGIN of 16.67%. I am losing 3.33%, and the
difference between the MARKUP and MARGIN gets further apart the higher
you go.
In the table below, you can see the MARGIN that is produced applying various
MARKUP factors.

MARKUP FACTOR MARGIN %

1.15 13.04%

1.20 16.67%

1.25 20.00%

1.30 23.08%

1.35 25.93%

1.40 28.57%

1.45 31.03%

1.50 33.33%

You never ADD the percentage of your MARGIN to your COSTS. You always
MULTIPLY your COSTS by the MARKUP factor you need to realize your
MARGIN.

PROFIT is a dollar amount. (SALES PRICE - COSTS)

PROFIT MARGIN (or just MARGIN) is PROFIT = _____%

SALES PRICE

MARKUP is the factor you apply to your COST to get your SALES PRICE.
You must understand this method of calculating your PROFIT MARGIN.
Otherwise, you will never realize the appropriate PROFITS you need to be
making in order to run your business.

TASKS FOR DAY 10:​

(take about 30 minutes to work through these tasks)
❏ Look at Line (6) from the LABOR BUDGET CHECK tab from the
template.
❏ We apply a factor of 1.2 for Labor Burden (taxes, insurance, etc.) AND a
Markup of 1.67 to the wages we pay our employees for this project.
Determine the Total Cost per hour of those 4 crew members whose
total hourly wage is $79.00.
❏ ANSWER: ________________
❏ Calculate the MARGIN (in %) for the 1.67 Markup applied.
❏ ANSWER: ________________
❏ You should have calculated $94.80 for the Total Cost per hour.
❏ You should have calculated a 40% MARGIN for the 1.67 MARKUP
applied.
❏ What is the TOTAL PRICE for the crew per hour? (Hint: See Line (7))

(If you are interested in learning how to track the costs and margin for your
business, then let’s talk about how the online course the SKILLED TRADE |
SOUND BUSINESS project can help you. ​
SIGN UP HERE​
for more
information).
. DAY 11 (Thursday) - ​
preparing your written proposal

Your estimate is complete (BREAKDOWN tab), and you checked your price for
the scope of work against your labor budget (LABOR BUDGET CHECK tab).
Now you are ready to prepare your written proposal.

Refer to the PROPOSAL tab in the Project File Template. This PROPOSAL tab
reflects the information on the BREAKDOWN tab.

The top of the page is where you will list all the pertinent project information
like Project Name, customer, Project Location, Project Type, Date of Proposal,
revision number, and so on. You may want to customize this section to reflect
your branding by adding your logo or any other information that you feels is
necessary.

The main part of the proposal reflects the Scope of Work, Quantities (QTY),
and the Total Price for each Phase or Area of the Project. You want to make
sure you “reference” the cells from the BREAKDOWN tab in each of the cells
in the PROPOSAL tab.
Here’s how you will reference cells FROM the BREAKDOWN tab to the
PROPOSAL tab.
1. Click on the cell in the PROPOSAL tab where you want the information
to appear.
2. Hit the “=” in the highlighted cell on the PROPOSAL tab from Step 1.
3. Click on the BREAKDOWN tab to switch to that tab.
4. Click on the cell in the BREAKDOWN tab that you want to appear on
the PROPOSAL tab.
5. Hit “Enter.”
6. The information that you selected from the cell on the BREAKDOWN
tab will now appear on the PROPOSAL tab in the location where you
selected in Step 1.

DO NOT COPY AND PASTE from the BREAKDOWN tab! If you copy the
Scope from the BREAKDOWN tab, and then paste that into the PROPOSAL
tab, you will place a copy of the text into the PROPOSAL tab cells. If you do
this, then you are placing new text on the PROPOSAL tab. You don’t want
that. You want to “reference” the information on the BREAKDOWN tab to
the PROPOSAL tab. If you reference the information from the BREAKDOWN
tab, then if you need to change anything on the BREAKDOWN tab, it will
automatically be changed on the PROPOSAL tab.
Once you have one cell from the BREAKDOWN tab referenced to the
PROPOSAL tab, then you can copy and paste within the PROPOSAL tab to
quickly populate the remaining information needed.

This will take a little practice, but don’t worry. You will get very fast at this.

(If you are interested in learning how to quickly setup a custom proposal
sheet from your estimate sheet, then let’s talk about how the online course
the SKILLED TRADE | SOUND BUSINESS project can help you. S
​IGN UP
HERE​
for more information).

TASKS FOR DAY 11: (take about 30 minutes to work through these tasks)
● Practice referencing your Scope Items and Total Phase/Area Price from
your BREAKDOWN tab to your PROPOSAL tab.
● Practice setting up the Project Information area at the top of the
PROPOSAL tab. Customize as needed.

. DAY 12 & 13 (Fri & Sat) - ​

preparing your proposal notes section

Your written proposal is almost complete. The last item we want to add is the
“Notes” section. You will want to develop a well written “Notes” section for
your Proposal Sheets. This is the CYA portion of your proposal. Here you
should list anything and everything you have assumed, excluded, or included
that could be misunderstood if you don’t state it.

You will find that these “Notes” will stay the same, for the most part, from
project to project. You may adjust, add, or delete certain notes from your
proposal depending on that nature of that particular project. These notes are
not referenced from any other tab, and should be typed directly into the
PROPOSAL tab in the “Notes” section.

Your Proposal Sheet is now complete. Select all the cells in your Proposal
sheet by clicking on one of the cells in the corner of the sheet and dragging
your mouse to the opposite corner. Go to File/Print (or select the Print icon
from the upper left corner). In the Print Settings window, under Options, click
on “Selection”, select the Paper Size (8.5”x11” usually works best), “Fit to
Width” and “Portrait” under the Layout section, and hit “Print.”

Depending on your setup and preference, you can print a hard copy or a pdf. I
recommend printing a PDF. You can then upload that PDF to your Google
Drive and you will have a digital copy of your proposal.

Send the PDF of your proposal to your client, and you’re done. You have an
digital file of your proposal (the PDF) and you have an active version that you
can easily change when needed.
TASKS FOR DAY 12 & 13:​
(take as much time as needed over the next couple
of days to familiarize yourself with these tasks)
❏ Prepare your the PROPOSAL tab based on the items you want to show
from the BREAKDOWN tab.
❏ Play around with the formatting - highlights, bold text, etc. to achieve
the look you want for your project proposals.
❏ Put your logo on your Proposal Sheet.
❏ Make a list of Standard Notes that you can easily copy and paste from
sheet to sheet.
❏ Commit to sending out your next Proposal on your new Proposal Sheet.

. DAY 14 (Sunday) - ​
reflect on what you’ve learned

Wow! You have come a long way in just two weeks. You now have a custom
estimating system that produces a labor budget and a professional looking
written proposal that can easily be updated as the project changes. Pat
yourself on the back, and take a break.

You’re two weeks in and you are changing the way you operate your business
forever. All this work is hard, but you are halfway to the end. It only gets
easier from here on out.

You have only two tasks for today, and they are easy ones.
TASKS FOR DAY 14:​
(this is an easy one)
❏ Find a good book and start reading it. Reading is a way to sharpen your
mental capacity. In order to stay mentally sharp, you need to develop
that brain of yours, and reading is a great way to do just that. Get a book
and relax. The business will be there tomorrow. Today is about you.
Find a good chair, and just sit back, relax, and read. (It’s ok if you take a
nap, too).

[ BE HAPPY. BE PERSISTENT. BE CREATIVE. ]

WEEK 3...tracking costs in the Project Ledger

. DAY 15 (Monday) - ​
introduction to the project ledger

The research shows that many of you do not have a good system for tracking
not only the costs of your business overall, but also, for individual projects.
The performance of individual projects over a given period of time will
determine the performance of your overall business over that same period of
time. Both areas of your business are linked. You must have a way to track
each project’s costs, profits, and history.

This week you will learn how to organize and track all of the costs, payments,
invoices, and gross profit for your projects in one convenient file - the Project
Ledger.

I have published a sample Project Ledger Template to the web. Click​

here​
​ to
open a web page containing the template, or copy and paste the link below
into your browser:
http://bit.ly/PPL_Project_Ledger_Template

We will be working with this file for several days. You should bookmark the
link above in your browser so you will have it easily available for reference.
This file is just an example to show you how your custom Project Ledger will
look. This file is a VIEW ONLY file, but you can easily recreate this file in your
spreadsheet.

(If you would like full access to the Project Ledger Template, as well as the
other templates we discuss in this action guide, and how to customize the
templates, then let’s talk about how the online course the SKILLED TRADE |
SOUND BUSINESS project can help you. ​
SIGN UP HERE​
for the online
course).

The Project Ledger Template contains 5 tabs: PROJECT LEDGER, LABOR

COST, PROJECT INVOICING, BILLING SUMMARY, and LEDGER DATABASE.

The PROJECT LEDGER tab contains the entire history of your project from the
initial proposal price to the final gross profit of the job.

The LABOR COST tab is where you track all the labor costs, man-hours, and
tasks performed on the project.

The PROJECT INVOICING tab is where you determine the content of the
invoices that you will send to your clients each billing period.
The BILLING SUMMARY tab is where you create a snapshot of the current
status of the project for the current billing cycle.

The LEDGER DATABASE tab is where you can set up some general
information in a database format that will be used for calculating labor costs in
the LABOR COST tab. This tab can also be used to catalog your Billing Codes
for reference within the project ledger file.

(I used the same numbers from the Project File Template that you reviewed for
last week’s tasks. Although this example is an interior trim project, you can easily
apply this method to any trade or construction business.)

TASKS FOR DAY 15:​

(take about 15 minutes to work through these tasks)
❏ Review the Project Proposal example from last week and note the
where the Original Contract Prices are located on the PROJECT LEDGER
tab in the Project Ledger Template File.
❏ Familiarize yourself with the LABOR COST and PROJECT INVOICING
tabs
❏ Make a list of all of your labor costs including the labor burden. You will
use this information Wednesday.
. DAY 16 (Tuesday) - ​
the layout of the Project Ledger tab

Think of the PROJECT LEDGER tab as “headquarters” for all the

project-specific job costing information. Let’s review the layout and explain
how information is handled on the PROJECT LEDGER tab.

At the top of the page, you will enter your Project Proposal information. You
only need the description of the Area/Phase of Work and the total price for
that section of your Project Proposal. You will also fill in any other project
information as needed, such as, Project Name, Number, Address, etc.

Below the original project proposal information, you can enter any additional
changes to your contract price as changes occur. The total price for your
project will be reflected in the “Total Contract Price” at the bottom of this
section.

The information entered in this upper section of the PROJECT LEDGER tab
will be used to reference information on the PROJECT INVOICING tab.

Most of the information in the “Project History” section is referenced from the
LABOR COST tab. See the column/row descriptions for cell references and
input areas.

In this example, you can see a two-week history of this project. You see the
total price and change orders (ADDs) in the top section. You can see the labor
costs per employee and material costs per vendor/supplier in the “Project
History” section. You also know your gross profit at the end of each week.

Let’s review a few terms that are used on this tab to make sure you know what
information is supposed to go where.

The template shows a description at the top of the column or next to the cell
where the information is referenced or if you need to directly input that
information. This should be pretty straight forward.

There are a couple terms that I use in this template that may need some
clarification. Think of your project as a bank account. Whenever you spend
money on your project, consider this a payment. This could be an actual
payment to a vendor, supplier, or subcontractor. This could be the cost for
materials or even mileage reimbursement paid to an employee for this
project. Basically, anything that is a cost to the project is a “Payment.”
Conversely, an invoice for this project is considered a “Deposit.” You want to
reference your labor costs from the LABOR COST tab for each billing period
first. Enter your other costs by directly inputting them into the cells below the
labor costs. All of your costs are referenced in the “Payment” column. Finally,
you will reference your invoice for the billing cycle on the next row down and
reference the amount in the “Deposit” column.

The Balance for the current row is calculated by taking the Balance from the
previous row, adding the Deposit from the current row and subtracting the
Payments from the current row. You can copy and paste this cell down as
your project progresses, and you will always have a current running balance
for your project. This Balance is the Gross Profit in dollars for your project.
TASKS FOR DAY 16:​
(take about 30 minutes to work through these tasks)
❏ Review each section of the PROJECT LEDGER tab.
❏ “Referenced” items are values from other tabs in the file.
❏ “Input” items are values that you will enter directly into this tab.
❏ What is your normal billing cycle for your projects? Does your billing
cycle match your labor time reporting cycle? If these two cycles don’t
match, then determine the frequency you will process your Project
Ledgers.

. DAY 17 (Wednesday) - ​
tracking your labor costs

Tracking labor cost per project can be tricky at times. If you don’t have
employees, then this day will be pretty quick for you. You still need to study
the information here, but it may not apply directly to your situation if you only
pay subcontractors for your labor.

Let’s assume you have employees. You know what you pay your employees
overall, but how can you determine that cost per project?

You have to start by having your employees track their time per project if that
labor costs is considered part of the Costs of Goods Sold (COGS). Check with
your CPA to determine what is and is not considered COGS.

Don’t worry if you don’t have a system for tracking your employees time per
project. We will cover that later this week. But for now, let’s assume you do
have those labor costs (or time) broken down per project.
Look at the LABOR COST tab in the Project Ledger Template file.

The first column is the date of the billing cycle. This cell will be referenced to
the PROJECT LEDGER tab.

The 2nd column is the name of the Employee. You can set up your LABOR
COST tab to “pull” this information from a database of your employees’
names. In this template file the Employee’s name is “pulled” from the
LEDGER DATABASE tab.

The 3rd column is the Billing Code. This is the code that your employee
records on his/her timecard to tell you what portion of the scope on which
he/she was working. In this template file the BILLING CODE is “pulled” from
the LEDGER DATABASE tab.

The Hours column is where you input the number of hours for that billing
cycle your employee had on that billing item.

The Labor Cost column is the total number of hours that employee had on
that Billing Code for that billing cycle multiplied by the Labor Cost of that
employee.

Example: (look at the first line of the Labor Cost dated 1/1/2016)

Bill Jones worked for 3.5 hours on Billing Code 1000 that week. Bill is
paid $25.00 per hour (See LEDGER DATABASE tab). The Labor Burden
factor for all employees is 1.2.
 So… Bill’s Labor Cost is = $25.00/hr x 1.2 x 3.5 hours = $105.00

In order to save time entering in all that information each time on each line,
this LABOR COST tab uses the LEDGER DATABASE from which to “pull” the
information needed to perform the calculation. Creating a system with a
database, is a very quick way to perform the data entry. You can use the
database to create a pull-down menu within your LABOR COST tab for your
Employee names, Cost Rates, Billing Codes, and even some standard notes.

(This action guide doesn’t get into the details of how to perform these types
of spreadsheet functions...we only have 28 days. If you would like to learn
how to setup your own databases, then let’s talk about how the online
course the SKILLED TRADE | SOUND BUSINESS project can help you. S
​IGN
UP HERE​
for the online course).

TASKS FOR DAY 17:​

(take about 30 minutes to work through these tasks)
❏ Did you make a list of your employees and their pay rates from
Monday?
❏ Determine your Labor Burden factor. This is the additional costs above
the pay rate. Usually the cost of taxes and insurance per employee.

. DAY 18 (Thursday) - ​
tracking your costs

Now that we have the labor costs entered into our LABOR COST tab, all you
have to do is reference the pertinent information into the PROJECT LEDGER
tab, enter in your material and other costs in the PROJECT LEDGER tab, and
then you will have a complete cost to date of your project.

The LABOR COST tab shows you all your labor cost and man hours. If you are
using Billing Codes, then you know your labor cost and man hours per item.
You can use this on your next estimate if you find that installing that item is
different than what you estimated. Real world data in real time.

With a few clicks of the mouse you can run some equations that analyze all
this information. This information is fuel for your business. You can know
EXACTLY what your costs are, how your production matches up to your
proposal, and where you are making money. You can start developing the key
metrics that help you grow your business.

(If you would like help in determining your key metrics, then let’s talk about
how the online course the SKILLED TRADE | SOUND BUSINESS project can
help you. ​
SIGN UP HERE​
for the online course).

Now that your eyes have been opened to what is possible, today’s tasks are
quick and easy.

TASKS FOR DAY 18:​

(take about 15 minutes to do this)
❏ Think about what kind of metrics you would like to know about each job.
Maybe you need to know the man hours. Maybe you need to know the
material costs. Maybe you need to know how the project is cash
flowing. All that is there in the Project Ledger. Just think about how you
can use a Project Ledger like this to help your business. Take a few
minutes and just think.
 ❏ Now, write down your key metrics. Make a list of the metrics you think
you need to produce going forward. Don’t worry if you’re not sure if
they are the right ones. You will find that out once you start tracking
and analysing the data.

. DAY 19 (Friday) - ​
setting up your invoices

The Project Ledger is tracking everything about your project. You are adjusting
upcoming estimates based on this information, and you are starting to make
headway on managing your projects better. But it doesn’t matter how good
your work is. If you can’t get paid for the work, then your work doesn’t have
any value.

Let’s talk about how you make sure your invoicing ties into the work you have
done so far.

The PROJECT INVOICING tab is where you record all your outgoing invoices
(“Deposits”) to your clients. In this example, you can see the invoices for two
weeks. The Original Contract Items are billed based on a percentage of the
work completed, and the ADDITIONAL ITEMS are billed based on an hourly
rate.

The first column identifies the income stream. For this example, I track
“Interior Trim Quotes” separately from the “Interior Trim Materials”. “Billable
Labor” and “Billable Materials” are also tracked as separate income streams.
Identifying your separate income streams is of great value for your business.
If you identify the various ways you make money, then you can track, monitor,
and adjust your business practices in a specific way for a specific income
stream. This ability to react, change, project, and predict will give you the
flexibility to grow your business in a very profitable way. You don’t have to
wait to hear back from your CPA to find out if you made any money. In fact,
CPAs love this system, because they don’t have to unscramble the egg.

You will have 3 Columns in the tab: the Income Stream, Description and
Total. The information for each of these areas is pretty self explanatory. The
last column shows the total for that line item that you are invoicing. There is
an equation in that cell that you can adjust based on the percentage of the
item you are invoicing.

After you have listed all the items for which you are invoicing, and listed their
associated descriptions and adjusted the line item total, then you sum them
all up. You now have your invoice total for those items for that time period.

The PROJECT INVOICING tab is similar to the PROJECT LEDGER tab in that it
shows a history of the invoicing of the project. Each invoice total from this
sheet is referenced to the PROJECT LEDGER tab on its own row, and the value
is placed in the “Deposit” column.

Start with a solid estimate. Turn that into a bomb-proof proposal and use the
scope and prices from that proposal to set up your Project Ledger. Then track
all your costs in your ledger, and tie that to you invoicing procedures. You
have eliminated any possibilities that your invoices won’t match your original
proposal. Sure, there’s a lot of data to input and you will make a few data
entry errors. Those errors will be very minor and easy to catch before the
invoice goes to your client by using the BILLING SUMMARY tab. We will
cover that tomorrow. For now, let’s knock out a couple tasks for today so you
can get back to work.

TASKS FOR DAY 19:​

(take about 10 minutes to do this task)
❏ Make a list of the different income streams your business produces.
❏ Can you break this list down further?

(If you would like to see step by step process of how to produce all the
information needed for your Project Ledger File, then let’s talk about how
the online course the SKILLED TRADE | SOUND BUSINESS project can help
you. ​
SIGN UP HERE​
for the online course).

. DAY 20 (Saturday) - ​
the billing summary

We are now going to use the BILLING SUMMARY tab to show you and your
client where the project completion is for each billing cycle.

The BILLING SUMARY tab shows a summary of all the information we have
produced to this point. Now you know what you have completed and what’s
left to do.

The first column in the Billing Summary is a list of the “Scope of Work”. These
items are referenced from the PROJECT LEDGER tab.
The “Contract Price” is also referenced from the PROJECT LEDGER tab.

The next column is the “Billed to Date”. This is the sum total of all the
invoices you have sent for that line item from the PROJECT INVOICING tab.
Each time you produce a new invoice, you add that line item total to the
corresponding “Billed to Date” cell for that line item.

The next column is the “% Billed.”

For example: the “Interior Trim: Main Level” has been billed twice
- Once on 1/1/16 for 30% and again on 1/8/16 for 40%. This is a
total of 70%, which is reflected in the “% Billed” for that line item
on the BILLING SUMMARY tab.

The next column calculates the Balance remaining for that line item.
“Contract Price” - “Billed to Date” = “Balance to Finish”

Here’s where the check comes in. The next column is the Math Check. This
column is calculated by taking the “Contract Price” and multiplying by the “%
Billed”. This total should always match the “Billed to Date” cell for that line
item. If not, then you have made a mistake. Most likely it’s in the % Billed.
Make sure your total % is correct. Go back to the PROJECT INVOICING tab
and verify that your billing % is correct. The other place where a mistake
could happen is if you have not added the correct cells in the “Billed to Date”
column. Check and make sure you are referencing the correct cells from the
PROJECT INVOICING tab and have them correct in the “Billed to Date” cell for
that line item.
If the Match Check matches the Billed to Date, then you are good to go.

At the bottom of the Billing Summary page, you sum the columns, and now
you (and your clients) can see the “Total Contract Price”, “Billed to Date”, and
“Balance to Finish”. You can email a pdf of the BILLING SUMMARY tab along
with the invoice (produced by your accounting software) to the client for each
billing cycle. This eliminates any questions as to where you are and what is
left in the project.

Now that you know the “Billed to Date” total on the BILLING SUMMARY tab
and your “Balance” for the project on the PROJECT LEDGER tab, you can
determine your gross profit for the project for this billing cycle.

GROSS PROFIT (%) = ​

BALANCE from the PROJECT LEDGER tab
“Billed to Date” total from the BILLING SUMMARY tab

Having the information is useful and the execution that can accompany it
powerful.

TASKS FOR DAY 20: ​

(take about 30 minutes to work through these tasks)
❏ Study the BILLING SUMMARY tab and familiarize yourself with how the
cells in the “Billed to Date” column are referenced from the PROJECT
INVOICING tab
❏ Practice calculating the GROSS PROFIT for the billing cycle.

. DAY 21 (Sunday) - ​
Let me know how you’re doing
You are awesome! You have made incredible progress, and I want to hear
about it. Send me an email (connect​shawnvandyke.com) with the SUBJECT:
@​
I JUST COMPLETED WEEK 3 of the Paperwork Punch List. Tell me what you
think about your progress and ask me any questions you have.
Or
Tweet: “The #PaperworkPunchList has helped me ________” [FILL IN THE
BLANK]
Or
Connect with me on LinkedIn (h
​ttps://www.linkedin.com/in/shawnvandyke​
)
and leave a comment​
here​
​ .
Or
Take a photo of the cover of this action guide and upload a picture to your
Instagram account, tag me in the photo
(​
https://www.instagram.com/shawnvandyke​
) and tell me about your
progress using #PaperworkPunchList

I love getting your feedback. I will respond to each one I receive.

Now go enjoy the rest of your day. I’ll see you back here tomorrow.
[ BE HAPPY. BE PERSISTENT. BE CREATIVE. ]
WEEK 4...doing what’s next

. DAY 22 (Monday) - ​
invoicing software

Many accounting/bookkeeping softwares exist that can help you manage

your books. You want to make sure that you have a software that is easy to
use for the purposes you need. For the time being you want to make sure that
you understand the basics of a Profit and Loss sheet and a Balance sheet. You
want to be able to input your invoices into the software as well as all your
expenses, and be able to see where all the money is coming in and how it is
going out. Check with your CPA about the best system to use for your
business.

If you don’t have a CPA, you need to start looking for one. A good CPA will
make you money. You can’t afford to get this stuff wrong.

You have done all the hard work to produce an invoice by working through the
Project Ledger system. Now you are ready to prepare your invoice in your
accounting software.

I recommend checking out Quickbooks online. (​

http://quickbooks.intuit.com​
)

This is the cloud-based version of Quickbooks and I find it is the best for the
money and quite easy to use.
You will need to contact your CPA or bookkeeper to make sure you have your
account set up correctly. We are only going to cover how to issue your
invoices from QuickBooks online (“QB”).

Assuming you have your QB setup to record all your expenses and accounts
let’s go over how to input and issue an invoice.

On Day 19 you determined your Income Streams. This is where those will
come into play.

You are going to input each of your Line Items from the PROJECT INVOICING
tab into QB to produce your invoice.

Log in to your QB account.

Here are the steps to input this sample invoice:

1. Click the “+” icon at the top of the page.
2. A window will pop up and you want to click under Create/Customers -
Invoice.
3. A blank Invoice Window will appear.
4. In the upper left corner, select your customer. If you already have your
customers set up in QB, then the email address and billing address
boxes will auto fill. Check with your CPA the best way to set up your
customers for your business in QB.

NOTE: If you use a Project Numbering system, you will want to set
your customer information like the following:
 a. Customer: Jones Custom Builders, Inc. - (this is the client’s
name)
b. Sub-Customer: 16-01 Smith Interior Project - (this is the Project
Number and Project Name

1. Under “Product/Service”, select the Income Stream for the line item
you are entering.
2. Under “Description”, copy and paste the text from the line item from
the PROJECT INVOICING tab.
3. For the “QTY” (quantity), input the percentage that you are billing for
this billing cycle.
4. For the “Rate”, copy and paste the total Contract Amount for that Line
item (this appears on the PROJECT LEDGER tab at the top for the
corresponding line item).
5. The “Amount” will automatically be calculated.
6. Repeat these steps for all the line items for which you are billing.
7. Hit Save. (or Save and Send if you have entered in an email address).

You’re done. You have a completed invoice that matches your Project Ledger,
which was created from your Proposal, which came from your Estimate.

The great thing about doing invoices like this is the classification of the income
stream. When you split your invoices up into various income streams, you can
use the power of QB to analyze all the different ways you make money in
your business.
When you look at your Profit & Loss (P&L) statement, you will now have the
totals for these various services split into categories, and you can use that info
to track, manage, and plan for the future. At any given time, you can quickly
see which income streams are producing what incomes and what percentage
of your overall income is a specific item.

You can develop this system to track anything you want on the income side.
Below are some examples of different income streams for different types of
businesses:

General Contractor:
- New construction
- Remodeling/Renovation
- Service and Repair
- Maintenance
- Specialty Projects
- Materials

Sub-Contractor:
- Interior work
- Exterior Work
- Billable Services (hourly work)
- Homeowner INT/EXT
- Homeowner Service
- Contractor INT/EXT

Sub-Contractor:
- Service and Maintenance
 - New Construction
- Remodeling

There are numerous ways you can split out your income streams depending
on how you wanted to track this part of your business. Once you know where
you are making income and how that is tied back to your estimating, you can
start to work on controlling the expenses that influence those income
streams.

TASKS FOR DAY 22:​

(take about 30 minutes to work through these tasks)
❏ Contact your CPA/bookkeeper about setting up your QB so that you
can track you different income streams.
❏ If you don’t use a CPA, a bookkeeper, or QB consider using them all.
What does each one of these cost?
❏ If you don’t already use an accounting software, get one. I recommend
QB online.
❏ Practice setting up your customers in QB and develop a project
numbering system that is listed as a “Sub Customer” to your Customer
list in QB.

(If you are interested in learning how get the most out of using QB for your
business, then let’s talk about how the online course the SKILLED TRADE |
SOUND BUSINESS project can help you. ​
SIGN UP HERE​
for the online
course).
. DAY 23 (Tuesday) - ​
understanding your P&L report

Now that you have your invoices being entered into your accounting software,
you are going to be able to observe how the money comes in (Income
Streams) and how the money goes out (Expenses).

The one report you should start to get very familiar with is your P&L
statement or your PROFIT & LOSS REPORT.

I know what you’re saying:

“Oh boy! Accounting. I hate this stuff.”

The reason you might hate anything to do with accounting and bookkeeping is
because you didn’t have a system to track and analyse this stuff. Now you do.

Let’s make understanding your P&L statement easy. P&Ls can be broken
down to this simple formula:

SALES (Income or Revenue) - COSTS (Expenses) = PROFIT

Your P&L statement shows this basic information. You now know your SALES
from your Proposals and your COSTS from your Project Ledger. All you have
to do is determine the additional costs of Overhead (just another category of
Expenses) and you will have a complete understanding of how your business
operates from a financial perspective. It doesn’t have to much more
complicated than that.
TASKS FOR DAY 23:​
(take about 10 minutes to work through these tasks)
❏ Read this​
article from Entrepreneur.com
​
❏ Make a list of your Cost of Goods Sold (COGS) or Cost of Services (COS)
❏ Make a list of your additional Expenses (Overhead, General, or
Administrative Expenses)

. DAY 24 (Wednesday) - ​
projections for the next quarter

The information is starting to flow in and now you are able to produce, track
and analyse all the data with your new system. The next step is to start
looking ahead so you can plan for what’s next.

Think about the next 3 months. What can you accomplish? What did you do
during this time last year? How can you use the information and system you
have to change the next 3 months?

When you use a system like this, then you are freed up to start thinking about
the bigger picture. You need to start training yourself to do the things you
need to do today so that you be the person you want to be tomorrow.

TASKS FOR DAY 24:​

(take about 30 minutes to work through these tasks)
❏ Write down 3 Goals that you would like to accomplish in the next 3
months.
❏ If you could only accomplish one of those Goals you just listed, which
one is it?
❏ Write that Goal on a piece of paper and post it on your mirror, in your
vehicle, or on your computer (something that you will see everyday).
. DAY 25 (Thursday) - ​
setting your goals

You have stated your number one Goal for the next 3 months. Now you are
going to break that Goal (capital “G”) down into smaller, more manageable
tasks. Let’s call these smaller goals (lowercase “g”).

These goals are what management gurus refer to as ‘S.M.A.R.T.’ goals:

❏ SPECIFIC:​
Goals must clearly express the expectations required for
successful completion. Think ‘WHO, WHAT, WHERE, WHY.’
❏ MEASUREABLE:​
There should be a system in place to effectively
measure progress. Think ‘HOW MUCH, HOW MANY, HOW WILL I
KNOW.’
❏ ATTAINABLE:​
Goals must be realistic. You want to STRETCH to reach it,
but it’s not extreme.
❏ RELEVANT:​
Goals should be a significant step toward your ultimate end
in mind. Does this fit with the long term vision and/or strategy?
❏ TIMELY:​
Goals must be assigned a deadline. This provides urgency.

Example: If your number one Goal is to increase sales by 10% over the next
quarter, then a smaller goal might be “I will make 5 phone calls each Friday for
the next 4 weeks to my best customers and ask them if they have any
projects they need me to price for them.”

TASKS FOR DAY 25:​

(take about 30 minutes to work through these tasks)
❏ Write out each of the S.M.A.R.T. items for your goals.
 ❏ Get accountability. Publish these goals to someone that will hold you
accountable. If you can’t think of anyone, then email me. I’d be happy
to help.

. DAY 26 (Friday) - ​
planning for the future

You have projected where you want your business to be in the near future and
you have set Goals to get there. You have an accountability partner that will
hold your feet to the fire. You are doing the work that very few people do,
and you are moving your business in a direction with a purpose.

Congratulations! You are among the elite of business owners. You are
thriving instead of just surviving. Take a minute to think about where you
started and where you are now.

But don’t stop here. What’s beyond the next quarter, the next year, and the
next 3 years? Make a plan for the future.

If you have followed this action guide to this point, then you have a system in
place to streamline your business. All the mental capital you were wasting in
the whirlwind of your day-to-day duties can now be invested in your
company’s future.

Planning your business cannot be done in a day. It is an organic process that

takes time, action, reflection, change, and persistence. Continually ask
yourself the questions listed below as you start to invest your time in planning
for your future.

TASKS FOR DAY 26:​

(come back to these questions again and again)
❏ What opportunities can I start to develop that will help me achieve my
plan for my business?
❏ What is working? What is not working?
❏ What can I do differently moving forward?
❏ What can I commit to continue doing moving forward?
❏ Do I need to create any new habits that will contribute to my success?
❏ Do I need to break old habits that are limiting my success?

. DAY 27 (Saturday) - ​
turn your dreams into reality

There’s an old saying that states, “You can’t predict the future.”

I disagree.

The future is what you make it, and here’s how to get started.

Imagine yourself at 85 years old, sitting in your favorite rocking chair, on your
front porch. You know that you have lived more years on this planet than you
have remaining, and you reflect on the people, places, and things you have
experienced in your life.
Read the question below, and then close your eyes and think about it for
several minutes.

As you sit in your rocking chair at 85 years old, what would you regret NOT
DOING in your life?

Seriously...close your eyes and think about that for a few minutes.

Ok. Now write down the things you would regret. Read over that list and
think about which ones you would eliminate if you only had 1 year left to live.

Now look at the revised list, and think about which items you would eliminate
if you only had 1 month to live.

Keep doing this until you have one item remaining. This one thing is your
overarching goal. Start working toward accomplishing that goal today. Don’t
wait.

This is your destiny. Live your life without regrets. Do whatever you have to
do with your business and your life in order to make sure you don’t end up in
that rocking chair at 85 years old with regrets.

You can predict your future by living a life of passion, purpose, and direction
with no regrets. The universe will move when you take action.

TASKS FOR DAY 27:​

(take a few minutes and work through this final task)
❏ Imagine you are you sitting in your rocking chair at 85 years old, and you
have no regrets.
 ❏ What action are you going to take right now to continue on the journey
toward that day? Write it down and then do it again the next day, and
the next, and the next...

. DAY 28 (Sunday) - ​
celebrate what you’ve done

Way to go! You have dedicated yourself to making your business and yourself
better. The world needs you to succeed.

There are fewer and fewer professionals in the skilled trades. Many of the
professionals that exist today are struggling with their businesses. I want to
help change that fact.

You are important and the work you do is important. Your clients need you to
serve them for years to come and they will gladly pay you very well for the
services you offer.

TASK FOR DAY 28:​

(this is an easy one)
❏ Celebrate! You have accomplished a mighty feat. Go do that thing that
you enjoy doing as a treat to yourself. Give yourself permission to enjoy
all the hard work you have put in over the past month. Today is about
you. Go have some fun!

[ BE HAPPY. BE PERSISTENT. BE CREATIVE. ]

SPECIAL NOTE TO YOU:​
I care about your progress on ​
The Paperwork Punch
List​
(whether your are just starting, in the middle, finished, or didn’t get
through all of it). I would be forever grateful to hear from you. Will you please
take this quick survey​
here​
​ ?

Thanks in advance. Taking the survey will help me understand where you are
coming from and what challenges you face.

Click​
here​
​ to take the survey.

If you would like to learn more about my online course ​

the SKILLED TRADE |
SOUND BUSINESS project​
, then go​
here and SIGN UP​
​ for more information.

CONTACT INFO:
Don’t hesitate to contact me.

BE HAPPY.

BE PERSISTENT.

BE CREATIVE.
EMAIL:​
connect@shawnvandyke.com
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i​
nstagram.com/shawnvandyke
WEBSITE:​
shawnvandyke.com
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linkedin.com/in/shawnvandyke
​
BLOG:​
shawnvandyke.com/blog
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facebook.com/svandyke
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​