Fix Broken Processes to Increase Average Hourly Wage



Processes are the Key to You Earning a Higher Hourly Income



Fix Broken Processes to Increase Average Hourly Wage

Episode 143 – The Local Small Business Coach Podcast 


Here is what we discuss in today's episode:

[Make More Money Series]– Processes that Improve What You Earn Per Hour:

Okay, I know you're wondering, “How on earth, are processes going to help me increase my average hourly income?”


Believe it or not, your processes are probably the single best secret weapon you have in your arsenal to increase your hourly wage as well as your total take-home profits at the end of the year.


Think about it, if we use our example that we have been using throughout the Making More Money Series, you're already working 60 hours a week and you're only making $50,000. How on Earth are you going to do more sales without working more hours?



Everything you do is tied to process of some kind. Sometimes they are intentional and sometimes they aren’t. Odds are strong that you rarely think of what you do as a process. But even your morning routine of the bathroom, brushing your teeth, shower, dressing, etc is a process. Most of you, probably do things in some type of order… a process if you will.


The key to a great business, a business that makes a great hourly income and end of year profit, is a business that has some great processes in place!


Processes can make or break your business. Poor processes cost you sales and profits. Excellent processes, allow you to scale your business to heights you can only imagine. Plus, they help you put as much as possible to the bottom line and send your profits through the roof!


Your processes are the key to boosting your sales and improving your profit. They are the difference between a $50,000 business at 60 hours and $100,000 at 60 hours a week.




I already mentioned that processes are part of everything you do in your business. They can range from how you schedule new business, schedule employees, how you purchase your inventory, how you start your day, how you end your day, how you do your bookkeeping, your estimates. Processes include how you route your day, how you train your people and most importantly, how you do the service you provide.


You probably follow a process to execute what you are delivering. Brick and mortars have a process of the how they expect the customer to be serviced and those of you that go into people’s homes have a process of how you clean pools, do landscaping, etc. Everything is a process. Everything is a potential opportunity to create more sales and profits!




Now that you realize processes are the key to you earning more money, and from the first part of our series, you learned where you currently are in your hourly earnings and where you want to be, the time has come to figure out how your processes play into this.


When we look at your processes, we want to think two things: Broken processes that need to be fixed to stop the leaks and processes that need to be created to ensure even more profits and sales can be processed.




The first thing you want to do is stop the bleeding. Address existing processes that are costing you money. This is by far the quickest way to earn more profits and boost that average hourly income without the need for additional sales.


You do this by brainstorming all of the processes currently in your business. From how you do the service, how you make the product and everything before and after the sale. Money lost due to travel, lack of organization, waste, doing things twice, poorly trained people, bookkeeping, hiring, training, how the job is done. Think returns, phone calls, estimates. Everything. Good or bad.


Once you have a good list. Mark them A, B and C.


The “A”s are completely broken processes that need immediate attention because they are costing you sales and profits like crazy. The ones marked “B” are bad but aren’t as pressing of an issue as those you marked “A”. The ones you will mark a “C” will be pretty darn solid processes. While they might need some massaging, they really aren’t costing you too many sales or profits.


Keep in mind, many of your “B” processes will improve by fixing the “A”s as they tend to get tweaked since they probably impact those “A”s. So they naturally get fixed. Those smaller headaches get swept up.


Now, put the “B”s and “C”s aside and focus on those “A”s. The big problems that have an immediate impact on both current sales and new sales.




Now find the one that will have the biggest impact on your business? Don't worry, you will come back to the others. But focus on this one. How will you fix it? What tools and resources do you need?


Layout the plan to fix and implement. Set aside the time to dive in deep and not just put a band-aid on the problem. Fix it for good. What needs done to make this a shining star in your processes?


Don’t get hung up on the time it will take to fix this right. The odds are strong that this one process will cause your business to jump dramatically in both sales and profits.


For example, maybe you have a horrible process for handling new business. You don’t get back to folks that call in for services, you are running person to person, doing each half-assed and you are stress mess trying to balance it all. You must call a timeout and fix this! The minute it flows right, you will double the business you do, make way fewer mistakes and will stop wasting time and money!



The second type of processes that you want to look at are those that create even more sales and profits. When you did the sales portion of this series, you should have come up with a laundry list of ways to grow your business’s sales.


Your first thought was how on earth could you make the time to do them? Well, here is where processes come in. You already have been freeing time up by working on the current bad processes costing you time, now it is time to work in the new stuff. Not only will they slide in that new time you created, but you need to think in advance what processes need to be in place first to ensure success.


For example, let’s say that you are going to offer a new service to your clients or customers. You need to think through how that process will be delivered, how you will get the materials if needed, who will do them, how this service will work in your existing calendar. Will it flow off other services or be standalone?


By thinking through the processes now, you will save yourself not only a lot of headaches but also lost sales and profits.




I want you to see how fixing your processes will create more money in your pocket.


Obviously, every dollar saved on profits, margin, costs, etc will go straight to your bottom line. So if you are able to fix a few processes that generate an additional $5,000 in profits, that will boost not only your end of year profits that $5,000 but your hourly income goes up $1.67 assuming our 60 hour work week.


Another example would be for every $10,000 in sales generated by better processes you have the potential for even more profits. Let’s just say that you are running a 40% profit margin post costs and expenses, this means that you have the potential for $4,000 in profits which at our 60 hours a week or 3000 hours a year means you can jump $1.33 per hour for every $10,000 you create in new sales working the same number of hours! Amazing. This is how you make more money through processes!


I promise, if you start fine tuning your processes, you will find more hours, more sales and more profit. That hourly rate will jump dramatically!




You are probably wondering how often should you be working your processes? All the time. You should always be having one process you are either finetuning, improving or creating.


As part of your quarterly business health check, you should have a goal to attack one process. Remember, you have nothing to lose and everything to gain!


Before you move on to that next blog post/podcast, grab a piece of paper, talk into your phone, start an email to yourself, I don’t care, but start brainstorming all your processes. Do the exercise we discussed earlier. Identify them all and then rate them A, B or C and attack the worse first.


If you don’t see a dramatic increase in either your sales or profits after you attack the first one, then fine, tell me I’m crazy. But I’ll bet dollars to donuts you will reach out to me and thank me for the money flowing into your pocket.   ?



By the way, don’t forget those employees and their processes. We will take a closer look at those processes in our next part of the series.


In our final part of the Making More Money Series, we will discuss the impact of people and that will include not only people that you hire and paid through a payroll system but also anyone that you hire off the street as an independent contractor to help you out in your business. So if you say help in any way shape or form you want to make sure that you check out part 5 series till then make sure he goes out there and start the process!


Here are the links to the five parts of the series. You don't have to do them in a specific order, but I do highly recommend that you do all five.


[Make More Money Series] – Increasing Your Average Hourly Wage

[Make More Money Series]– Using Sales to Earn More Per Hour

[Make More Money Series]– Your Profits Dictate How Much You Earn Per Hour

[Make More Money Series]– Processes that Improve What You Earn Per Hour

[Make More Money Series]– Are Your People Hurting Your Personal Hourly Wage?


Time to start making more money!




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