If you continuously watch billable hours, net profit per hour, and this last signal, a thriving, growing maintenance customer base, you have a great opportunity to get and stay profitable, build wealth, and significantly impact your life and the lives of your employees.
Let’s get into the last continuous signal – your thriving maintenance program.
As you know, maintenance may be a break even net profit per hour. However, it feeds service and project/replacement work which have higher net profits per hour. It also builds trust with the customer, generates referrals, and builds off the balance sheet wealth. A thriving maintenance program is also critical to a large payout when you decide to sell – either to outsiders or family.
Track maintenance activity each week. Start with total number of maintenance plans. Then add the number of maintenance plans enrolled that week to get the new totals.
Track the renewals separately. It makes no sense to add 10 new plans and lose 11 plans. I see too many contractors add several hundred maintenance plans each year and lose an equal amount of maintenance plans because they don’t pay attention to renewals.
Monthly recurring billing can help eliminate the loss of plans because there are no renewals decisions. Your customers pay monthly in perpetuity unless they cancel. Most won’t as long as you continuously talk with them and take care of their home/office needs.
These are the three continuous signals to track every week. Track billable hours, net profit per hour for all departments, and the number of maintenance plans. As long as these three continuous signals head in the right direction, you have a great chance to increase profitability, build wealth and live the life of your dreams.
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Ruth King is well known as “The Profitability Master.” She is passionate about helping small business owners become profitable and stay profitable. For over 40 years she has coached, trained, and helped contractors and others achieve the business growth and goals they wanted to achieve.
Contact Ruth by emailing ruthking@hvacchannel.tv.
