1/37 What are the Real Numbers? Setting Realistic Goals Based on Real Numbers! By Les Cunningham CGC, CR*, CCR*, CGRa *A NARI Certification

2/37 Your Expectations... 1 /Name 2 /Name 3 /Name What are your expectations of this seminar from what’s been advertised? (Need a Volunteer)

3/37 Basis of my information: Business Networks with 200+ companies! a: Hands-on review of their numbers b: Participation in the major associations c: One-on-One consulting d: Owned and operated my own business for 15 years for 15 years e: Won 15 C.O.T.Y. awards in a 7 year period. Business Networks with 200+ companies! a: Hands-on review of their numbers b: Participation in the major associations c: One-on-One consulting d: Owned and operated my own business for 15 years for 15 years e: Won 15 C.O.T.Y. awards in a 7 year period. It will offer you a different perspective that may lead to significant results for you personally and corporately.

4/37 $60,000,000 Lottery Priest Tennis Player DKI Member

5/37 SystemsSystems BudgetBudget MarketingMarketing SalesSales –Pass the Baton –Commission Paid from Produced Gross Profit ProductionProduction –Pass the baton –Job Costing Incentive SystemIncentive System –Beat the Budget –Paid out of net profit above 10% BudgetBudget MarketingMarketing SalesSales –Pass the Baton –Commission Paid from Produced Gross Profit ProductionProduction –Pass the baton –Job Costing Incentive SystemIncentive System –Beat the Budget –Paid out of net profit above 10%

6/37 50 Hours Max! What is the Time Frame?

7/37 Common Income Comparison (Refer to Handouts #1 & #2) 1999 Business Networks Industry Averages

8/37 Crucial Data The Leading Indicators of the Health of your Business. 8/37

9/37 Crucial Data The Leading Indicators of the Health of your Business. 9/37

10/37 Real Numbers The following charts are from the same 66 companies shown on Handout #1.

11/37 Real Numbers The following charts are from the same 66 companies shown on Handout #1.

12/37 Real Numbers Annual Gross Sales Example Expense Item: Each dot Represents a Company This dot indicates that this company has Annual Sales of approximately $900,000 and the expense is equal to 5% of Sales. The calculated trend line indicates the general trend as companies’ sales increase.

13/37 Real Numbers Annual Gross Sales Example Expense Item:

Annual Gross Sales Building Materials (Direct Cost) vs. Gross Revenue Shown as a Percent (%) 14/37

Annual Gross Sales Payroll - Labor (Direct Cost) vs. Gross Revenue Shown as a Percent (%) 15/37

Annual Gross Sales Subcontractor Costs (Direct Cost) vs. Gross Revenue Shown as a Percent (%) 16/37

Annual Gross Sales Actual Gross Profit vs. Gross Revenue Shown as a Percent (%) 17/37

Annual Gross Sales Payroll – Owner (Overhead) vs. Gross Revenue Shown as a Percent (%) 18/37

Annual Gross Sales Payroll – Owner (Overhead) vs. Gross Revenue Shown in Dollars ($) 19/37

Annual Gross Sales Total Overhead vs. Gross Revenue Shown as a Percent (%) 20/37

Annual Gross Sales Net Profit, Pre-tax vs. Gross Revenue Shown as a Percent (%) 21/37

Annual Gross Sales Net Profit, Pre-Tax vs. Gross Revenue Shown in Dollars ($) 22/37

Annual Gross Sales Net Profit + Owner’s Salaries vs. Gross Revenue Shown as a Percent (%) 23/37

Annual Gross Sales Net Profit + Owner’s Salaries vs. Gross Revenue Shown in Dollars ($) 24/37

25/37 Step by Step by Step... Building Your Business:

26/37 * Before Taxes 1 10% Owner/General Manager Compensation* Building Your Business: 10% for Doing the Work of Running the Company! Step by Step by Step... Eating Money

27/37 * Before Taxes 1 10% Owner/General Manager Compensation* Eating Money Building Your Business: 10% for Doing the Work of Running the Company! Step by Step by Step... Examples of Owner/General Manager Compensation: Cash Hospital Insurance Medical Expenses Lease Income Retirement Plan Other Benefits Wages Personal Remodeling Personal Income Personal Communications Organization Memberships Home Office Expenses Vehicle Expenses Disability Insurance Life Insurance Credit Cards Entertainment

28/37 2 Building Your Business: 10% Working Capital Working Capital = (Current Assets - Current Liabilities) Short Term Money Available to the Business Definition 1 10% Owner/General Manager Compensation* Step by Step by Step... Operating Money

29/37 Sample Group of Real Companies Working Capital ($40,000) ($20,000) $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 $180,000 10% of Gross Sales Working Capital Working Capital Current Assets - Current Liabilities 10% of Gross Sales is Desired. Company #1 Company #2 Company #3 Company #4 Company #5 Company #6 Company #7 Company #8 Company #9 Company #10 Company #11

30/37 2 Building Your Business: 10% Working Capital 1 10% Owner/General Manager Compensation* Step by Step by Step...

31/ % Working Capital 10% Net Profit (StockholderCompensation*) % Owner/General Manager Compensation* Profit Building Your Business: Bucket 3 is Profit for the Owner(s)- -You? Step by Step by Step... 31/37

32/ % Working Capital 10% Net Profit (StockholderCompensation*) % Owner/General Manager Compensation* Profit Building Your Business: Bucket 3 is Profit for the Owner(s)- -You? Step by Step by Step... Examples of Stockholder Compensation: Dividends Profit or Loss Before Taxes 32/37

33/37 10% & 10% The Goal: WITH Fluctuating 10% Working Capital WITH (Current Assets - Current Liabilities)

34/37 Owner/General Manager vs. Stockholder Compensation Direct Costs 60% Other Overhead Costs 20% Net Profit 10% Stockholder Compensation Owner/General Manager Compensation 10%

35/37 “If you are going to go broke... Don’t work at it. Go to the beach.” --My Next Door Neighbor

36/37 Your Expectations... 1 /Name 2 /Name 3 /Name Did the Seminar give you what you wanted?

37/37 Our Business Networks Team thanks you for the opportunity to be of service to you and your company!! Please take a moment to fill out my Speaker Evaluation form now.