10 Steps to Greater Profitability
Wednesday, January, 29th, 2014 at 10:00 am by Mike J. Agugliaro
How profitable can your business be in the next week, the next month, year, five or ten years? The key to a thriving heating and air, plumbing, or electrical business is developing your profitability and giving you more freedom, but that’s often easier said than done.
So the question is, are more leads and more customers always the key to greater profitability? Will simply hiring good employees make your business more profitable? Not necessarily.
Try these 10 steps to success, and before you know it you’ll find yourself with more money and freedom than you ever imagined!
- Evaluate your current business processes: Where do you need to improve? Do you need to work on getting new customers or do you just need help closing incoming calls?
- Set goals and benchmarks: Once you know where you are, figure out where you want to go. Are you still working in the business rather than on the business? Do you want the phone to ring more? Do you want to hire some more technicians and give yourself more freedom? Use your current performance and set timelines for making improvements. Consider changes to customer service, marketing, and the products, services, and prices you offer.
- Analyze your customer base: Who and where are your customers? Is your service area so big that you might be driving past tons of potential customers to get to someone miles away? Figure out which existing customers are the most and least profitable, and how you could get more people in your immediate area calling you.
- Analyze your prices and services: Is the phone not ringing much at all? When your technicians give someone a quote, are they careful to assess the problem and repair costs accurately from the get-go, or are there likely to be lots of add-ons and adjustments to the prices you’re charging? Remember, it’s not just the dollar amount that counts, but how you deliver on what you promise, and how you take care of your customers before and after a sale. Make sure your people know how to present pricing options to customers.
- Ask people if they are satisfied: Find out why your most profitable customers chose you over your competitor. They’re likely to be loyal to you when they’re satisfied, so go to the source to find out what you’re doing right.
- Analyze your market: Who and where are your customers? To boost your business, you’ve got to know your target zip codes and neighborhoods.
- Adjust internal costs: Can you make some cuts? Talk to your accountant, auditors, and other financial experts to see if you can trim the fat. Look into vendor partnerships and asking for co-ops to save money. Some cuts will have more long-term benefits than others. These are the ones you want to make.
- Change your offerings: Think about adding new services to your portfolio. Maybe offer some packaged services at a discount, or special promotions for new or loyal customers. Make your business appealing to new customers.
- Offer great customer service: Whatever you do with your prices, make sure you’re taking great care of your customers. Be honest and respectful, deliver on your promises, and be patient to work through customers’ frustrations. Great service builds loyalty and keeps people coming back to you again and again.
- Reexamine periodically: Once you have your plan in place for increasing profitability, look at it every month or so. See if you are on track with your benchmarks and goals, and if there are any further adjustments that you need to make. Plan ahead for lean times, or the likelihood of growth and expansion.
Greater profitability takes some great planning, but it is possible. If you need help getting started, contact CEO Warrior today to find out how I can help you unlock the secrets of business mastery.
Mike Agugliaro, “Business Warrior”
Founder of the Warrior Fast Track Academy & CEO Warrior Circle