Write down every recurring decision you make, then turn each one into a rule someone else can follow. Work Flow is how the work gets delivered, and while the owner is every decision, the business can’t do more than the owner can.
What is Work Flow?
Work Flow covers people, systems, efficiency, rework and the margin on every job. It’s the third of the Four Flows. It’s the constraint when the owner is the bottleneck, rework is eating margin, delivery is inconsistent or some jobs don’t make money.
What gross margin should a labour-intensive business have?
55 - 70% gross profit is the target range. That only means something if cost of sales is built properly. It includes materials, the wages of the people doing the work and job-specific equipment hire. Owner and admin wages stay in overheads. If your P&L doesn’t split it that way, the gross profit figure won’t tell you which jobs make money.
Do I know my gross profit by service line?
Work it out for each service or job type. Most owners don’t know. Until you do, you’re guessing which work to chase and which to price up.
How do I cut rework?
Quantify it first. How many jobs get redone and what does each one cost? Then build the system: a job brief, a completion checklist and a standard your staff are held to.
How do I get out of the decisions?
List every decision you make more than once a month. Write the rule behind each one. Hand over the ones that follow a rule and keep the ones that don’t.
Hire slightly early, not when you’re drowning. Track billable against non-billable hours too. Toggl is enough at small team size and Karbon or similar suits 3 or more. For job management, Karbon suits accounting and ServiceM8 or simPRO suit trades. The discipline matters more than the tool.
What does a Work Flow fix look like?
My client went from $1.5m revenue at 5% net profit to $2.3m at 14% net profit in 12 months. The revenue went up by about half. The profit went up nearly five times.
Where do I start?
The free Profit Consult is 45 minutes on Zoom. Bring your P&L and I’ll tell you which flow is blocked.
Book a free Profit Consult: https://calendly.com/jung-jung/profitconsult
Which decision did you make this week that a one-page rule could have made for you?