We have given plenty of advice to get started in business, how to repair appliances, and how to get the proper training, but what do you do when you have already started a business and need to make sure you are using black ink instead of red ink when you are doing the books? Today, we will to provide some advice for new business owners to help them ensure their business is and stays profitable.
Improving Your Profit Margins
That is a blanket statement, but there is a lot to unpack here. First, if you are doing warranty repair work, make sure the rates are profitable for your business before you get into a contract with a company. They will have their rates published for the different types of repairs you are going to do, so make sure you are not doing jobs that are actually costing you money.
You also need to reverse-engineer your pricing. By this, I mean that you have to look at the price you are charging, then back out the cost of supplies, parts, labor, payroll taxes, vehicle costs, etc. so ensure you are paying enough to turn a profit when everyone that has their hand in your pocket gets their piece of the action.
There are actually software programs you can purchase to input all of your data, then the software will generate a price range for you.
Track Your Inventory
The last thing you want to do is show up on a job and realize you donâ€™t have the part needed. When you first get started, do a complete inventory, then track it every time you add or subtract. You can also use programming for this that will bring up alerts when you are low on certain items. You can even use the software to make recommended buys based on inventory and past usage.
When you are working on appliances, you obviously need to travel to homes. You want to make your route as efficient as possible so you are not adding needless miles to your day. This will cost you both time and money. Take the time to plan out your route before giving arrival times to customers. If you have people working for you, establish zones so each employee can be as effective as possible every day.
Review Your Work
Get a tracking program to track how long it is taking for jobs to be completed, even your own work. This will help you better estimate pricing as well as seeing if people are taking too much time to make repairs. Since most job estimates are going to factor in labor hours, employees that are taking too long to complete their tasks are either costing you money or the client is going to see a higher-than-expected invoice. Either way, it is not good for business.
Maintain Your Equipment
This goes for trucks and tools. Your truck(s) will get a lot of use, so make sure they are being maintained on a regular basis. The same can be said with all of your tools. Keep everything in good working order with a regular PM program and will not be spending any needless money on repairs or replacements that could have been avoided with some regular TLC.