Does this describe your situation?
- You're a one-man shop
- You're working more than 40 hours per week
- Half your time is spent running service calls
- Half your time is spent giving bids on larger jobs
- You close only a small percentage of those bids (which you blame on low-bidders)
- You're behind on your phone calls, record-keeping, and paperwork
- You have an extra truck lying around
- You make very little money
- You go a little deeper into debt every year
- You want to grow your company, but don't know how.
If so, here's a step-by-step procedure to get out of the truck within 30 days (explanations to follow):
- Hire an office manager (you can afford it – see below)
- Acquire another truck (don't worry about your credit score – see below)
- Hire two service technicians (you have enough calls – see below)
- Implement flat-rate pricing
- Start selling service agreements
- Live a good life.
Hire an Office Manager
You may think you can't afford an office manager, but the fact is you can't afford to not have an office manager. An office manager will cost you about $40,000 per year in salary and up to about another $40,000 in various other expenses. That's a maximum of $80,000 per year, or about $40 per hour. If you're charging more than $40 per hour to run service, then you're losing money every hour you spend doing the work of an office manager. Instead of doing office work, you should be out making money. Can you see why I say that you can't afford to not have an office manager?
Plus, you probably hate paperwork. Why not go out and do what you're good at, and pay someone else to do what you don't want to do?
When a friend of mine opened his shop, one of the first things he did was find someone to run the office while he ran the service calls. He advertised on Craig's List (www.craigslist.com) for free, and had his pick of people possessing telephone skills, organizational skills, bookkeeping skills, and computer skills. That was almost three years ago, and she's still with him and doing a great job. I'd like to see the same thing happen for you.
Acquire Another Truck
You'll need three vehicles — one for each of your techs and one for you. Even with poor credit, you can still acquire used vehicles with little money down and affordable monthly payments.
Nearly every town has these small car dealerships that specialize in selling used vehicles to the "credit challenged." They usually have a large sign out front that says "Buy Here, Pay Here." These people will finance just about anyone; frequently without finance charges.
There is nothing wrong with buying a vehicle from these dealers. I've purchased two vehicles from dealers like this, and a good friend of mine who is a contractor has bought several. I know other people who have as well.
If you think you can't afford another truck, run some numbers. A good tech bills out about 1,000 hours per year. Multiply that times your hourly rate and you'll realize that you can't afford to not buy another truck.
If you want to get this done in 30 days, go out and buy as many vehicles as you need to bring your inventory up to three today. It will take at least two weeks to get them painted, lettered, shelved and stocked. That's about how long it will take you to find your two new techs and get them riding alone.
Hire Two Techs
If you're already running calls an average of 30 to 40 hours per week, you already have enough calls to keep two techs busy, if you hire the right people.
If you're already working more than 40 hours a week and you're behind on paperwork, there's no way that you're taking your time on your service calls and going after, and getting, all the add-ons.
When you're working that many hours, you don't even want to sell add-ons and convert a simple repair to a half-day's worth of work. You don't have the time to do so.
You're probably not selling service agreements either. Your two service technicians will.
If you had two techs who were not over-worked, and had the time and the sales skills, to get the add-ons, they could both stay busy running calls 40 hours per week.
Since they wouldn't be in the hurry you're in, they more than likely would be developing better relationships with your customers, selling more service agreements (which create more work), selling many more add-on tasks, and possibly even doing higher quality work.
Without you having to devote your time to running service and performing mundane office chores, you can spend more time on the sales calls where you're estimating larger jobs. You'll have more time to listen to customers, establish rapport, think things over, and provide a more thoughtful and complete list of recommendations. You won't feel rushed. You'll be more relaxed and make a much more favorable impression. This will result in a higher closing ratio on these larger jobs at a potentially higher profit margin. This means you'll sell more labor hours.
Can you see how you, more than likely, can keep two techs busy without spending any more money on marketing or generating any more calls than you already are?
Next month I'll tell you who to hire, where to find them, provide more information on flat-rate pricing and service agreements, and show you how to live a good life.
Charlie Greer is a HVAC sales trainer and a former HVAC Consultant of the Year. For guidance on following the steps in this article, call Charlie at 800-963-HVAC (4822) or e-mail him at [email protected]. Visit him on the web at www.hvacprofitboosters.com.