Sometimes you just have to measure where you are compared to where you want to be. Otherwise you will look at your current business performance and assume that's the way things are supposed to be, or that's as good as it will get. If you haven't changed much in the last few years you can expect to score on the low side of the scale for success. It's difficult today to keep ahead of the competition if you are still operating the same way you did several years ago.
I was prompted to come up with this analysis of the problems I see many service and repair businesses have after attending annual events. I noticed that the same people had the same problems -- year after year. I suppose I shouldn't be surprised, but I am disappointed. And they are watching their businesses fail.
These business owners should be doing better than they are, and I am going to do everything I can to get them started. If increasing their awareness of what they are overlooking will help, that's where we will begin.
Do any of the traits discussed below apply to you?
Are You A Procrastinator?I see business owners proceed so slowly that you would think it would take an act of Congress to get them moving. It's one thing to be cautious, however, delaying decisions about adopting proven techniques that will help your business for three years is going to be costly for your business -- and your own financial success.
For example, I have seen business owners at the same annual events for years listen to other business owners about the techniques they have adopted, such as service agreements, and they still hesitate. Even with their profits falling, they have no service agreement program and no service agreement sales. They could have tried it and dropped it if it didn't work for them. But they never tried it.
To put off decisions like these for years you must be able to explain the delay to other business owners. I am talking about excuses. Their excuses are not even new or original ones. They use the same old tired excuses that I have heard for decades:
- "I need to check with the wife." (How many years does that take?)
"It won't work in this area."
Flat rate works. Service agreements work. Top-quality service, adopting the best customer relation techniques, and all the other elements of a well-run service and repair business work. But, you must implement them in your business to enjoy the benefits.
Avoiding RiskSimply because you postpone a decision does not mean that you are avoiding risk. Putting off a decision that could financially turn your business around actually increases risk. Look at it this way: If you keep doing the same thing you will likely get the same result. (Insanity is doing the same thing while expecting different results.)
Changing the techniques you use to market your business's services is going to produce better results, if you follow methods that have been tried and proven successful. What do you have to lose? Delaying the implementation of successful business practices only keeps you from reaching your goals.
Let's identify more of the decisions that some business owners are putting off.
Thought about joining a success group? Getting training for your technicians? Upgrading to professional uniforms? Switching to professionally designed Yellow Pages ads? Is the signage on your trucks the kind needed to attract business? These types of decisions and more like them are the decisions that can make a difference in your business. Putting them off is a definite barrier to your success.
Did you ever hear about a fisherman who put off going fishing because he might catch a fish so big that he wouldn't know what to do with it? That's how I see the procrastinators. Are they afraid of success?
Don't let success scare you. It's OK to be successful. Delaying a decision is not being cautious. Instead, it guarantees that new techniques will not be implemented, limiting your potential for increased business.
The BasicsIf adding service agreements to their line of services scares some owners away or switching to flat rate pricing represents too much of a change in the way they do business, let me offer some of the fundamental changes that I think will ease them into greater profits.
These basics include pricing and costs. The hourly rate, whether built into flat rate pricing (the better way) or the amount directly quoted to the customer, is always a sensitive topic with service and repair business owners. Suggest the rate should be higher and they will balk at raising it, claiming their customers will abandon them for the lower-priced competitors.
At the same time, if you examine their costs, as I often do, you find that they are not covering the cost of their overhead with sufficient profit built in. That's always the dilemma: Raise costs and (supposedly) lose customers or end up short on revenue to cover costs and a decent profit.
Charging what you are worth is a challenge easy to overcome. Take my word for it, the customers won't flee to the competitors if you raise prices to make certain that you can offer the quality service the customers deserve.
Actually, that's the key to keeping your prices where they belong: the service. It has to be top notch. If it is, you will only lose the segment of the market that wants, or will tolerate, unprofessional technicians, late arrivals and poor quality work. Those shortcomings typically accompany the companies who set the floor on pricing.
For example, if you are not charging around $125 per labor hour for service and repair work, either you are not making money or cutting costs to the extent you are not keeping good technicians, training them or making certain they spend the time and use the care necessary to cause your customers to rave about your company's professional technicians and its quality service.
Break-Even AnalysisI defy any good service and repair business to show me how they can be profitable without first using a break-even analysis. It is so fundamental, yet often ignored. You can't compute your potential profits or set prices with any level of confidence unless you know your break-even point.
All businesses have fixed costs, such as rent, trucks, equipment, etc., and variable costs, such as labor hours, fuel used, etc. Every job completed requires some contribution to both types of costs. Until you compute it you don't know the precise amount.
I have to admit that crunching numbers for jobs and inputting all the fixed costs of the business is not my idea of a good time. However, the work must be done for good management pricing decisions.
If you want to stay outside the group of procrastinators in this business, I suggest you make a pledge to yourself. Promise yourself you won't say, think or even listen to anyone who says, "It can't be done here."
Stay true to your pledge and success will follow you.