Moneyball for the Trades
How much money did
your business lose today?
Remember: guessing is expensive.
Principle 01
Guessing is expensive.
It's the most expensive line item in every trade business past a million. It doesn't show up on any P&L. That's what makes it dangerous.
The math is brutal
Run the math
on a single week.
These are not edge cases. These are average weeks at average shops past a million in revenue. The numbers are conservative. Your shop's are probably worse.
Pick a Tuesday. Any Tuesday. Inside that single day, in a shop running three trucks and one CSR, here is what the guessing costs.
One unbooked call. The CSR was on another line. The voicemail was never returned. The customer called the next shop on the search results. Average ticket on a residential trades job, conservatively.
$420
One quote that sat. Sent Monday. No follow up. Customer's hot week passed. They forgot, or they bought from someone faster. The job was real.
$1,800
One ad channel guessed wrong. The agency reports clicks. Leadership pays for closed jobs. The channel that looked best on the dashboard returned the worst dollars. The budget got reallocated by feel, not by cost per acquired revenue.
$2,400
One pricing decision made by gut. Quote went out at the "old" rate because nobody updated the matrix. Material cost moved. Margin disappeared on the job before the truck rolled.
$650
One Monday meeting that ran on debate. Marketing's number, ops' number, and the bookkeeper's number didn't match. Forty five minutes of arguing about whose data was right, instead of fifteen minutes of deciding what to do. The cost of that hour, against the team's loaded rate, against the decisions not made.
$580
One Tuesday at one shop.
$5,850
Multiply by 250 working days. The number rounds to a million and a half. None of it shows up on the P&L as a line item called "guessing." It shows up as revenue you never made and margin you never kept. The shop hits its numbers, or doesn't, and nobody knows why. The bookkeeper closes the month, the agency reports its KPIs, the team works hard. The million and a half is invisible. The shop calls it "the cost of doing business." It is not. It is the cost of guessing.
Guessing in costume
Guesses arrive
in better clothes.
The trick is that guesses don't usually announce themselves as guesses. They show up wearing other words. The list below is what they tend to wear in trade businesses. Read slowly.
"In my experience, this channel works."
Translation: I have not measured this channel against the others in the last 18 months.
"I've been doing this 20 years."
Translation: My pattern recognition was calibrated for a different size of business than the one I run now.
"I know my customers."
Translation: I knew the customers when I personally answered the phone. The CSR is now serving a population I have never met.
"Marketing is performing."
Translation: The agency dashboard is green. I do not know if the green dashboard correlates to closed revenue. I have not connected those two systems.
"The team is on it."
Translation: I have not seen the work in progress queue this week. The team is on something. I am hoping it is the right thing.
"We had a good month."
Translation: Revenue was up. I do not know if margin was up. I will know in 30 days when the books close.
The principle, restated
A guess in a suit
is still a guess.
Experience is real. Pattern recognition is real. Twenty years in the trades is real. None of these are measurement. They are heuristics that worked at one scale of business, and they degrade as the business scales past the operator's line of sight. Past a million in the trades, they degrade fast.
The principle is not that experience is worthless. The principle is that experience is not data, and treating it as data is the most expensive habit in a growing trade business. The shops that scale past their owner's line of sight are the shops that learned to tell their guesses from their numbers, and to act only on the numbers.
The Standard
In a Moneyball run trade business, no decision is made on a feeling that could have been a number. If a number was available, the number wins. Always.
What it costs to keep guessing
The bill comes
whether you read it or not.
The shops that keep running on guesses don't fail loudly. They stall. Revenue plateaus. The owner works longer hours. The team gets harder to keep. The agency gets blamed, then fired, then replaced with another agency that gets blamed in eighteen months. None of it is the agency.
The guesses get more expensive every year, because the business keeps getting bigger. A guess at three trucks costs hundreds. A guess at ten trucks costs thousands. A guess at thirty trucks costs the year. The cost compounds. The visibility doesn't.
The shops that stop guessing don't get to the next decade because they had better instincts. They got there because they replaced instinct with a system. That system starts here, with the first principle: guessing is expensive. The next two principles describe how shops actually stop.
Continue reading
You know guessing
is expensive.
Now find where it's leaking.
You can't fix a leak you can't see. The second foundation principle is what shops past a million stop being able to do. Naming the cost is principle 01. Finding where it's hiding is principle 02.
You can't fix what
you can't see.
Fixing symptoms keeps you blind. Revenue leaks don't announce themselves. They hide in the gap between the phone, the FSM, and the agency report. The second principle names where the costs of the first principle actually live.
Continue to Principle 02