11 Overlooked Details That Could Add $100,000 (Or More) to Your Bottom Line
The devil’s in the details and so are big bucks. Here are 11 easy actions to take now that can save you thousands this summer. You do not need to perform all of these yourself. Delegate as many as possible.
1. Check Your Pricing
Super contractor, Ken Goodrich checked is pricing this week following a “Power of Positive Pricing” presentation at the Southern Nevada Air Conditioning Refrigeration Service Contractors Association meeting.
On the Service Roundtable, Ken said, “I found that my company was underpriced by 17.6% to provide my profit goal this year. I guess overhead has a way of creeping up on you when you're not looking. So with the new labor rate implemented Monday morning and 6 months of proper pricing, I should make $217,000 more than I would have.”
Do not wait until the end of the summer to verify that you are charging what you need to charge. Run the numbers and make immediate adjustments. As Ken says, “Every $217,000 helps.”
2. Maintain Your Trucks
You get busy and maintenance slips. Do not let it. At the very least make sure every vehicle’s had a recent oil change, that all fluids are full, and that tires are properly inflated and in good condition. Thirty minutes at a quick oil change shop could prevent three days of vehicle down time.
3. Collect Rebates
The HVAC industry features a number of buying groups today. Contractors who belong to those buying groups save thousands through supplier rebates. Join one. Once you join one, set up an approved vendor list. Review your purchases and use the approved vendor list to steer your purchases to companies that will pay you a rebate.
4. Sweep Your Bank Account
Whenever your checking account exceeds the amount needed for working capital, sweep the excess into an interest bearing account. You may pull from it later, but you might as well collect some interest on your money. Even if it is not much, it takes little effort to earn it.
5. Take Early Pay Discounts
See if your suppliers offer discounts for early payments, such as a two percent discount if you pay within ten days. If not, ask them to provide a discount.
6. Review Your Utility Rates
If your live in an area where you can choose your electricity provider, see if you can get a better rate by switching companies. Do the same thing for your Internet service provider and telephone service. As long as the service is reliable, electricity, Internet service, and phones are commodity products. Don’t pay more.
7. Use a Credit Card With a Travel Affiliation
Choose a credit card that allows you to travel, based on your purchases. Then, pay everything possible with this card. Use the points for vacation travel and travel to industry meetings and conferences.
8. Review Your Merchant Services
Merchant service fees add up fast. An incremental change in your merchant services rate or add-on fees can easily save you thousands of dollars every year. Sometimes, merely checking to see if you can get a better rate will stimulate your merchant services provider to lower their fees.
9. Evaluate Your Mobile Phone Plan
Talk with your phone provider to see if you are on the optimum number of minutes and data for your company. Depending on the number of phones provided by the company, you could save hundreds to thousands.
10. Ask For a Better Lease
Check with a local realtor to find out what comparable lease rates are in the area. If yours are higher, ask for a reduction. As a good tenant, you should receive the best market rates.
11. Review Your Insurance
Bundle all of your insurance and shop it with several companies to see who can offer you the best overall package. There is often room in insurance plans for competitive discounts.
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