Last Years numbers Matter for a strong 2026

Yep.

Yeah.

Hello. Hello. Hello. How are you? I'm fantastic. Happy 2026 to everyone that's out there and you, Veronica. Um, everyone, it's I'm so good to be here today. I am so excited that you are joining us for our first live. Like it's me and you. I think that we've only done one together, just the two of us. And usually Susan's on the backside like bleeping things out. So it's just us. Susan has no control over tonight's episode. So it's great. So yes, happy new year to everybody out there in the fence industry. Women of FWA are so excited to be back with our lives. Um, I think today Yadir and I have a topic that's kind of on everybody's mind. And if it's not on your mind, it should be. Um, because we're going to talk about like we often hear in the industry all the time about know your numbers. Know your numbers. Know your numbers. Okay. So, what numbers are you talking about? We're going to we're going to touch base on we're going to touch base on what do you do with the numbers from 2025 to prep yourself and get ready for 2026. So, you know, you're more successful and you're hitting those goals. So, we're going to kind of go through all that. Um, so if you were going into 26 hoping that it'll be better this year, um, this is definitely the live for you to watch. Um, we do have to say that, um, tonight we're talking about the numbers. All the numbers that we're talking about are fictional. They are made up. They're nothing factual. They're not from any organization. Um everything that we are talking about is for educational purposes. There will be no financial um advice, no tax advice, no legal advice. All of the information is down there in that disclaimer. Um sure you read it. Yeah, please read it. Also, we are going to show a very basic spreadsheet that I put together. Um then it is strictly for educational purposes and again the numbers are made up. We're just trying to give you guys some visuals and some content. Yes. So, the goal, what numbers, what do they mean? What? You know, we often, you know, we deal with organizations of all size. And I mean, I've been asked the question like you hear it all the time, know your numbers. What numbers? Like, what do they mean? How does this all work together? So um we're just making sure that things are clear. So there's top five numbers every business five every business should know inside and out. The first one you total revenue and what is that? This is the full price you charge customers for the fence that you're installing. Oh. So total revenue isn't how much I made for the year and and how you know we're doing outstanding because we have a revenue of 1.7 million this year. No. No. Oh, okay. Good to know. Uh what's number two? Number two is cost of goods. So cogs and this is the post, the panels, concrete, screws, and the crew that installed it. what is everything costing you? Correct. And this is where I think a lot of people really kind of lose sight. Um, and this is going to go back to the spreadsheet that we're going to talk about because in your cost of goods and what the boots on the ground are and what the materials are, all of that. Um, you know, you got to know a little bit more numbers to get to your actual labor hours and that kind of stuff. And making sure that you're shopping around. Yes. Um, that is one of the things that we see repetitively is people not doing their due diligence as a consumer and making sure that, you know, you're getting fair pricing from your vendors. We hear all the time, "Oh, I've been with them for 20 years and they've always done me right." Okay. Are you taking their word for it or are you are you doing some research? Exactly. Um, okay. What is number three? Number three is gross profit. We're going to be going over um what's left after the fence is built. Um but before you pay all of your office bills. Wait a minute. So gross profit isn't my profit for the year. No. Oh uh you just keep like dwindling this number down.

I know. I thought I was doing great. That's business for you. And this is why we're talking about this because you hear profit or you hear revenue and you automatically think, you know, this is what we're making. This is what our bottom dollar should show. Number four, we're going to be going over operating expenses. So, basically, this is the shops, the trucks, your insurance, your software, your office staff. um even when you have not installed any fence and there's no fence being built, this is this is what your operating costs are. And this is huge. This is also where a lot of people I think forget about the little things. Um you know, oil changes, new tires, um the electric bill, especially in the winter if you live in Wyoming, because if you're in a shop, you're you're spending quite a bit more in the winter time to make sure that's heated. So your utility costs are going up. So these are all bills for the in Vegas for the AC. Like it's the opposite, you know. Absolutely. So um sitting down and figuring out what goes into that. Um that includes printer ink. How about a printer? How about a laptop? How you know all your office expenses? Toilet paper in your office, toilet, you know, paper towels. Like these are your overall operating costs. And so getting ready to go into or being in 26 and making sure when we approach the spring that we're prepared, we have the right numbers. These are all things that we need to take into consideration. And it's amazing how they add up, Veronica, because oh man, you know, you if you don't if you're not tracking it, like you're oblivious to it. But if you are if you are doing what you're supposed to be doing and tracking those little things, that's where the magic happens for sure and tracking it correctly. So that's kind of one of the things that we're going to talk about a little bit today is in regards to what are some main things that you should focus on if you're not doing them already. So what is number five? Number five is your net profit or your loss on this left. Yeah. or you're not loses build and the business is paid for. Right? So, this is telling you if you're in the black or if you're in the red. Um because you could be in the black the entire time and your overhead operating expenses were underestimated and all of a sudden now we're in the red. Um this can change can change from one month to the other. It can change instantly. So, yeah. And one of the things, especially in our industry, because we know that it runs on a cycle. You know, the spring, I don't care if you're in Las Vegas or if you're in Wyoming where it snows, it goes in these cycles. And so being in the red in your first quarter, is very, very, very common. Um, especially with installer organizations because you don't want to let go of all your overhead, whether that be your staff or your office or whatever, to just need it back. So this is also where preparing at the end of 25 when things are busy and start creating that nest egg so you can float things over to the next year and you're not up sleepless nights wondering how you're going to make payroll or how are you going to pay for you know new tires because they need to be done right now because there was somebody that had a blowout. You know these are things that happen. Yeah. Um, so another fallacy that we see all the time is about bank balances, but I have money in the bank, which is great because cash flow is is huge and it is necessary, right, for emergencies or for whatever. But how come like my bank balance says that I have $100,000 in it, but all my QuickBooks and stuff says that I'm in the red? Why? Thank you. So, this is something that like even my sister and I had a discussion about it last a couple weeks ago or something where she, you know, she's thinking that, you know, whatever's in your business bank balance is what you made. Um, no. Completely wrong. Um, and another part, a huge thing in our industry, and I will say this until I'm blew in the face. I've been saying it for years. A job deposit is a

Liability. It is not income. So, again, if you're taking 50% deposit, 60% deposits, whatever the case may be, they actually should be classified and um in your QuickBooks as a liability. Now, you're going to put that money in your bank account, but it's not going to show up in, you know, your income part of your QuickBooks. It's going to show as a liability. The reason it's a liability is because if that job cancels, whatever that, you know, there's always a plethora of different things that could happen, you have to pay that money back typically. So, it's not yours. So, it's not yours until you obviously completely finish the job, collect the balance, customer is happy. Until that happens, that 65% deposit or 50% deposit that's sitting in your bank is technically you shouldn't even count on it, you know. No. And it it's it's probably spent. I mean, how many times, especially with businesses, you know, we're in a day and age where credit card payments are a thing and, you know, a thing and and so for convenience and instant gratification, but most organizations still send out checks. um multi-million dollar GC companies, you know, that are hitting billions. They're not going to AC you. They're gonna run you on a check run that they do every two weeks and you're in there with the other 500 of them and sending it out. So, even though it's paid out of QuickBooks, if it hasn't come out of your bank account yet, you don't have that money. It's just like your home checking account. You know, sometimes you just swipe your card and it takes a couple days for the charge to to go through. That doesn't mean you have that much more money. No. [snorts] Um, okay. So, one of the things that I love an analogy on, especially when we're talking about finances, is if your fence leans, you're going to go check your post, right? That's always going to be the thing that you come back to is checking your post. Your finances are the same exact way with your organization. This is We're going to compare it to a fence line all the way down. Um and make sure you know that we're hitting these these things as we go. Um so your numbers um work the same way pretty much as a fence line. Um you can tell what needs fixing and that doesn't mean that you failed. I want to say that if we point anything out or you're not doing something, we're not saying that you failed in any shape or form, we're giving you tools to fix it and make sure that you have the foundation to actually fix your fence. Um, and that's what we're all about. So common mistakes besides the deposit um that we see all the time is mixing personal and business expenses. Man, this is so easy to do. So easy to do and you're and you can justify some crazy costs for yourself to apply to the business when all reality it shouldn't. Um, so this is a big one. And if and if you're you're running certain things, maybe you need to change um your coding a little bit different to be able to track that, you know. So, so you're getting true numbers. Um, not tracking by category. Hello, Andrea. Not tracking by category. So, in your experience, Yadira, what are some categories that you make sure are being tracked? Um so so for example um we and a while back we were you know kind of diving into different types of fence. Um what I like to do is what I is I like to track whether it was vinyl fence you know with a separate line item whether it was chain link whether it was um iron um whether it was wood. So this way like at the end of the month I can I can see you know okay which um type of fence are we purchasing the most um which type of fence is selling the most um you know and you can also see when you're c when you're tracking your cost of goods you can also see what you're spending on each one of those. Absolutely. Um, I think another one that's really, really huge that organizations often look over is billable crew hours versus non-billable crew hours. Yes, I think this is something that gets misconstrued. And when you start talking about your numbers and we get into the spreadsheet here in just a second, it's really where this plays in with that because you're not going to

Get 100% of billable crew hours. If anybody has figured out how to do that and they are W2 employees, please let me know because without fail, it's a matter that somebody has to go, you know, again, get tires changed on a truck or they have to run a truck to the dealership for services or somebody else's truck broke down and now you've got to send a guy to go get that truck and that trailer and rearrange people and there just always seems for things to come up. Yes, 100%. there's always something that's missing or you somebody forgot something and you have to go back. So, it's billable versus, you know, not billable hours for sure. Not billable hours and they're huge. And when you figure out, you know, a rough idea of what you should be charging per hour when you're bidding, that needs to go into play. Because if you're bidding that you're going to have 100%, you know, 40 hours a week of billable manh hours, but that's not what you're getting, you're already shortch changing yourself before you've even stepped foot on a job site. So, um, we're going to review that here in just a second. Um, another one that we see, and I know both of us have talked to people about this, is, "Oh, I'll deal with that at the end of the year. I'll deal with it at the end of the year." Waiting until tax time. One, that gives me the biggest case of anxiety because I want to know where we're at. I want to know what's working, what's not working, what can we improve on, what what do we need to improve on? What do our goals need to be? Just kind of shooting in the dark. And that could be that could be that could be in a negative or a positive way too. I mean, you want it towards the end of the year, you want to see, you know, are you in the positive? Like, you want to spend, you might want to spend, make sure that you spend some money before the end of the year, you know. Um, absolutely. So, and just not being consistent on reviewing your numbers. Even if you have someone in your organization, a bookkeeper or if you've hired a CPA or any of that, you should be sitting down with them and going through financials every single month. And then again, at the, you know, you're going to do a at the end of the quarter, you're going to do an end of month and you're going to do an end of quarter And then you're going to do another end of quarter and then you're going to do an end of month and end of year. Yes. Um, and I actually mid year is a great time to sit down and review numbers because that's usually the pivotal point in the year, you know, in the in the workflow. So, making sure that um you're reviewing them, you're making changes, you're you're categorizing things correctly. You know what? If you have somebody in there and you forgot to give them a message that things should be categorized a little bit different, that's when you're going to catch it and not have to go back 12 months worth of records. Exactly. Um, so let's get to the spreadsheet. Um, again, disclaimer, strictly educational purposes. This is just some simple content um that I put together for quick, easy reference. So, there's a couple different ways to calculate um your hourly wages and what we should be working on as far as cost um because this is huge. So, first part is we're going to put in that we have six um field team members. Okay. Now, our annual overhead expenses. So, again, you're going to pull your 2025 numbers. You're going to start adding up all these lines of expenses. Make sure things are categories right. So, office expenses, leases, marketing, accounting, um your salary, if off tools, power, phones, etc. Like that that's a whole lot of numbers to be combining into one line item, right? I mean, that's that's a lot. So, then you're going to go through and you're going to figure out field and overhead hour rates all added for the year. at each person's hourly wage. Okay? So, we're talking about if you're paying Bob Smith $20 an hour, you're going to add that because we have another line down here to cover for taxes and all that kind of stuff. So, we're going to figure that out. We're just going to say that annual overhead

Expenses was 300,000. Our total wages paid was 200,000. Now right here, now we start talking about chargeable hours and the difference between billable and non-billable. So 52 weeks times 40 hours is 280 hours. And then we have holiday, sick leave, public holidays, training, other non-chargeable hours. So we can assume roughly that 440 hours unchargeable. Okay. So that goes then we go from 280 hours down to 1640. That's a lot. I mean that's a big difference. But when you look at 440 hours through 52 weeks, it's really minimal numbers that add up really really quick. Okay. So totable or total chargeable hours and then we have a payroll adjusted wages. So if you click on this I just times it by 20%. Again we're talking about fictional numbers. So when you look at um just additional payroll expenses pretty much it's just like a CIA kind of thing. And then you get into benefit, taxes, work comp, unemployment, adjusted wages. I mean, all the boring stuff. All the boring stuff that you and I love, all the fun stuff. So, um, you're going to start adding it. And so, now, look, we went from total wages of 220,000, but now we're at 312. You know, we're we're starting to add some stuff up. So, you do get these hourlies. Um, and we'll break it down. So then you can charge hourly wage per chargeable hour, overhead um, hourly overhead cost per chargeable hour. So I broke it down two ways for you. Not only are you figuring out field team per hour, but your overhead per hour. And so this is cost. Again, this is not these are fictional numbers. These are made up. It's education, but this is cost. So, if you're if you're going through some numbers and you're throwing some stuff in there and you're charging $50 an hour, but your numbers at this time of year are saying that you cost was 6220. Yeah, you're doing something wrong. This is not knowing your numbers. This goes back to those numbers that knowing your numbers. So, here's another um easily one um yearly uh hourly calc or labor review calculator review. So, what I did is I took annual overhead expenses. Again, we're at $300,000. Okay. Um total annual payroll paid was actually 312. With the adjusted, I added another 20%. So, we're at 37440. So, we have six team members. with a total of 16.40, right, per billable hour. So, we've got these totally chargeable hours. And so, here we're showing 9 or 6854. Now, they're a little bit different because I was just plugging in, you know, some random numbers and getting into the nitty-gritty up at the top, but but we're still not too far off, right? So, again, if you're charging $50 an hour, there's there's a problem. And these are knowing your numbers. These are breaking it down. These are very very very simple calculation spreadsheets that I've put together. This one has zero formulas. This one has zero formulas. This one has zero. I mean, this one does because I had to subtract our non-billable. This one does because we added the 20%. This one does because then we added the adjusted payroll. Um, and then this starts doing the math for you. So, this is it. You don't need to have a degree. You don't need to go to school for this. You don't need to any of that to be able to pull these numbers and start really looking at it. Now, if you are brand new into business and um you're not quite sure, you don't have the numbers, right? You don't have the foundation, you don't have the year, you can start to estimate. You can start to plug in some things and and some averages and depreciations and cost of the vehicle and how many, you know, on average, how many oil changes are you going to have and office expenses and all of that. And it might not be, you know, dead accurate. Nothing is dead accurate because 2026 could bring us a whole new ball of wax from 2025. So, but knowing them, right? Giving yourself that buffer. Um, Sylvia, yes, I am willing to share the spreadsheet. If you would please send me an email at veronicaorldfense.org. Um, I will send it to you. Again, it's strictly for educational. Um, I am not a CPA. I am not an accountant. I have just

Done this for a long time. But I I think it's important for you guys to know. So, no, it's great information, Veronica. Um I'm I'm u not shocked um that you have put in that time to put create those spreadsheets. You know, the spreadsheet actually is something I just created um not too long ago to be able to share with our members um because some people don't even know where to start. Right. They're just like, I don't even I don't even know how to begin this. So, um I kind of just took a model that I have learned that I know is successful that I've used now. It's been successful for me. So again, if your numbers aren't categorized right, if your stuff is not in the right places and charged the way that it should be, your numbers, this is not going to work. and I have tweaked it to work for me so far. See, and I love that, Sylvia. I am a firm believer that you're not going to find anything from someone else that is 100% going to work for you. I agree. Um, everybody's different. You take something and you make it your own. So that's always the best obviously take whatever it is that you can. So absolutely my best ideas have always been stolen. I always have. Please, you know, um I'm all for sharing. I'm all for sharing any information that I if if something works for someone, you know, please. Absolutely. And and let us tweak it. And that's why I'm so transparent about stuff is because I've absorbed it from someone else and I want to know how someone else is going to fix it or tweak it or make it work for them. And then I'm like, "Oh, yeah. Okay, that works." Um because it's a group group effort around here. It is. Um All right. Number one thing to take away from right now is 2025 numbers are data. They're not mistakes. They're not judgment. They're not any of that at this point. they are data and the mistake is if you don't go back and use the data for 2026. Um once you know what actually happened in 2025, you'll stop guessing as much. The company will stop running you hopefully as much. There's a lot of operational stuff that goes into that as well. But as far as the financial side, Um, okay. Cleaning up the mess. So, before we really get into 2026, dear, what are the main things that that people should be doing? Um, so you want to set realistic goals for 2026. Um, you want to set like you want to look at your your 2025 numbers and see um set realistic 2026 Yes. So if you know if your revenue was a million dollars for 2025 and you're not going to go from a million to you know 10 million but right and having goals um it's so important I have seen organizations out there they're like oh we don't set goals what how do you not set goals that gives your team and yourself you know the dangling carrot at the end of the finish line. And if they don't have anything to work for, why would they work? I've said this over and over and um it it's so important to set goals because how do you know where whether you are meeting those goals or whether you have to work harder or you know how do you celebrate something if you don't know where the goal was or is or how to achieve it exactly. Um because you could very easily let's say and let's say last year again fictional numbers we had 1.5 million in sales. Okay. And 2025 was hard. It it's across the nation has been such a difficult year. So let's say we're going to set two goals for the year. One, yes, we want to increase our 1.5 million by roughly 30%. Right. That's that's a great goal. However, not knowing what our crystal ball is not showing us for 2026 and 25 being as hard as it was, the one part of that we can definitely control is let's hit the same revenue minimum. That's requirement. And let's lower our costs by 30%. Because now what you've done is you've increased what you're actually making. what your actual profit is, what your actual loss is. So, there's two sides of that coin. And I really hate to see organizations just set revenue goals. Because if you've got somebody that's not paying attention to pricing or somebody that's not paying attention to hours that they're soaking in, they're

Just there for a paycheck. I don't care how much you sell, you are not going to be it's you're not going to see the outcome that you're expecting to see. Um, all right. So, 2026 is here. Reconciling monthly statements and credit cards, people every single month. Please, for the love of Pete. And that does not matter if you are a single organization out of your truck and out of your house or if it matters that you have a team of 30 to 40 people. every single month you should be knowing what's going on in your team and again things add up. $5 adds up real quick if it's you doing it and to make sure that your team is doing things the way that they should be um and not in a way taking money. Um, another one is making sure to separate the three payments to the owner organization, which is owner pay, owner reimbursement, and the owner straws. These should be separated in all reality. They will make your life so much easier when you go to do year-end finances and it's saying that an owner, you know, cut a check out of the bank account for 250,000 and maybe a h 100,000 of it was reimbursement. That's it's going to muck things up pretty quick. And it does happen. It can happen quite a bit with very small organizations. Um it tends to happen quite a bit. I see it. Uh, so you want to you want to make sure you categorize that one. It's okay for an owner to draw, you know, however much absolutely you need it. So, you just want to make sure that you categorize it correctly. Correctly. And and it's a button. If you're using QuickBooks, if you're using any accounting system, it is a button. You just have to select the right one. I think another one for 2026 that I see is people not identifying costs, whether if they're reoccurring or not reoccurring. Um, and having an idea of what those flows look like throughout the year. So if we know that January, February, March is kind of on the slower time of year, but we have one time yearly, you know, annual renewals that are due, we might want to move them to a different time of year, you know, and start identifying these trends on your expenses. Um why is the term close enough gonna hurt your books?

Because it adds up. All of it adds up. $10 here, $5 there. We all heard the thing for years about who would spend $5 a day at Starbucks for coffee. Do you know how much money that is at the end of the year? Right. Was that close enough? We miss that $5, that $20, that $100, that thousand dollar. Yes, every week, every month, whatever the case may be. Okay. Simple systems that save money. U monthly review habit 15 to 30 minutes. Compare last month to this month. Compare 25 to 26. Compare last quarter to this quarter. Whatever accounting system you have, most of them do have the option to be able to categorize between the two of them. Um, clear expense categories. Clean them up. Make sure they're straight. If you've got a team that is in there, make sure that it makes sense to them and they have a clear key. Uh, one of the sources that I've seen is if it's an overhead expense, that um cost code starts with a different number completely than if it is a actual billable expense starts, you know, two separate quick easy identifiers um without having to read the whole title. And then one source of truth. I think it's important whether it be an accounting system, whether if it be a spreadsheet, whatever the case may be. Um, just have one source and and go look at it. It might be scary. You might have butterflies. You might think that it's better just to ignore it. You may I see so many people thinking that they don't need it, like they don't want to look at it. But until you actually sit down and look at those numbers, um, you don't know what to what you're doing good and you don't know what you're doing bad. Absolutely. And so you have no room to fix it, you know, or to make it right. And again, this is just about, you know, okay, it's data now. It's closed. It's over. 2025 is no longer here. So let's use the information. Let's make 2026 better. Exactly. So, um, again, set realistic 26 revenue and targets priced correctly, not emotionally. I don't care what Bob Smith is doing down the street. Know your numbers. Know where you're at and worry worry about yourself. Anybody that's seen that video of that little girl, she's my favorite. Monthly revenue targets, fixed and variable expenses, cash flow buffer. I mean, those are the main takeaways for tonight, guys. I know financial stuff is no fun. We tried to make it fun, but the one thing like like you you have like the one thing you have to do is you have to stay consistent with those with, you know, inputting that data. Yeah. And don't let it get behind. It's so quick. It's so easy to let it, you know, oh, I'll do it next week or oh, I'll do it n next month or I'm, you know, too busy or I can't do this or, you know, and then all of a sudden you're six months behind and $100,000 in the negative in your bank. You know, that doesn't include QuickBooks or what your accounting system says. I'm still in business. That's all that counts. Absolutely, Sylvia. 1,000%. and you have lived to see another day. Um, and that is huge. We're glad you're here. So, uh, real quick before we get off, Susan's probably yelling at her computer or her phone because we're over 30 minutes. We're over the 30 minute mark. We got some big stuff coming up in 26. We have four events in 2026. Like, that's insane to me. We've been so busy. And not to mention all this other cool stuff we're working on. Um, demo days. Demo days is coming up. That is in March. Oh, we have the fence cruise. Um, that's before that. That's the end of February to the beginning of March. And then I think it's like two and a half weeks later. We've got demo days. In June, we have the Women of FWA retreat that I am so excited about in Branson, Missouri. In Branson, Missouri. We've rented a couple houses, super limited registration that should be rolling out here anytime. Um, and then of course we've got the Fen Show, the 2026 Fen Show and Security Expo again in Las Vegas. Um, the Fen Show in Las Vegas is not the same as demo days. Um it is two totally different things. You guys will have some more lives on lives on that here pretty soon. So uh stay tuned. There's a lot of announcements, a lot of goals. Um the team has set some some good goals for 2026. Even though they're not 100%

Revenue related, we've got them. So um thank you. Thank you guys. Uh so good to see you all on here commenting. And um I was a little nervous about coming on, but It's good to be back. We got it. We just rip off that band-aid and and make it happen. You guys, thank you everybody. Have a good night. See y