Successful Plumbing Companies: What to look at for the second half of 2018
Most successful plumbing business owners are looking at a snap shot of their business on a daily basis, perform an in-depth audit of the business on a monthly basis and really dig in on a quarterly basis. This is just good business. The end of the 2nd quarter is a special milestone in business and warrants a much harder look into the past 6 months.
What should you be looking at?
Annual Goals- Are you on track to hit the annual goals for your business? If yes, that’s terrific. If not, what is going on that is causing you to fall short of the goal and what are you going to do different moving forward?
Staffing- Where is the overall health of your team? Are you over or understaffed? Any changes to manpower requirements moving into the next quarter and what can you do about them?
Financials- With 50% of year on the books, you have a sold base to measure what the second half of the year looks like. Where is your profit margin? What do your sales look like? What are your costs related to sales? Are these numbers where you want them to be?
Marketing- Remember when your advertising salespeople promised you all this new business when you signed this year’s contract? Remember when they said you need to give it time to start working? Yup, 6 months (depending on the media) is plenty of time to be able to determine if you’re getting the promised return on investment. Bring the people you buy marketing from in for a midyear meeting to evaluate what the results are.
General Operations- How smooth is your ship sailing? Any major issues arise during the second quarter? What can be done to prevent them from happening again?
Of course, there are many other areas of the business you can take a look at, but these are some of the major identifiers of the overall health of a plumbing, heating, or cooling business.
What to do if everything looks good?
Keep doing what you’re doing! Sit your team down, discuss the great first half of the year and continue to work the system you have in place that’s producing results!
What to do if things aren’t looking so good?
Something different! The saying “if you keep doing what you have been doing, you’re going to keep getting what you have been getting” hold true. Even thriving businesses have periods of time where one metric or another isn’t on track with expectation. This is ok, it happens. A key point to identify is thriving businesses catch these things with enough time to fix them before they get out hand. If there is an area of your business that you’re missing the mark on:
Identify the why- Be honest with yourself. What is causing the slip?
Fix what’s broken- If your company has been at a level in the past, you know it’s capable of being there. Find what’s broke and fix it.
Set a timeline 30-60 days out to relook at the results and make sure the change you made is having the desired outcome.
Here’s what we’re going to work on in our residential plumbing, heating, and air conditioning service business:
2017 was a record year for us in all divisions as far as sales and net profit. It was a damn good year. The only bad thing about a damn good year is how the expectation for next one is! This is a real challenge we are facing and are going to work on in our business.
Area for improvement: We are missing our mark on gross sales.
The cause: Because we track everything in our business, I can’t blame “not enough calls” because I know we have ran almost exactly the same calls YTD as we did in the first half of 2017. After 18 years in this business, I don’t get too fired up one way or another if something is doing well or poorly in just one quarter of a year. This business is cyclical and some years what you don’t get in the first quarter you get in second and vice versa. What I do know is if you’re not where you want to be at the 50% mark, you better make some stuff happen if you want to achieve the goal. The problem we identified is performance related. Specifically average ticket. Our average ticket has been “on the watch list” since the first quarter. That slightly lower average ticket over 6 months hasn’t improved with the subtle attempts we have made to correct it.
How did it happen: The real reasons are complacency, lack of management, and lack of holding people accountable. One of the benefits of being at the top is nothing happens in your business without you being responsible for it. There are of course other real-life explanations for this, some of which we cannot control but none of those really matter.
What will be done to fix it:
- There are a couple of people on our team who are under-performing last year and have been most of this year. This will get corrected through one-on-one training, ride alongs, reaffirming the behaviors that lead to last year’s performance.
- We will focus on the rest of the team as well to attempt to elevate their performance in order to make up for the 2nd quarter shortfall.
- Drilling down costs. There are two ways to add profit to a business- increase sales or decrease expenses. To make up for our lack of performance for the ½ half of the year, we will be doing both in the second ½ of the year. We will focus on what needs to be done to drive the average sale up while in unison making adjustments to our cost of doing business over the next 6 months.
- I will be reevaluating our performance daily.
- If I don’t see the results turn around in the next 15 days, I will be jumping in a service truck myself to get that average ticket where it needs to be not only to make up for the shortfall in the first six months of business, but also to beat the goal that was set.
So, that’s what I will be going to work on in our business. What are you going to be going to work on? Is there anything going on in your business you’re not quite sure how to handle? Let us know, we’re here for you. And you’re not in this alone!
PS- If you’re a current client, remember to register for the 2018Q3 Webinar. As always, our quarterly Ride the Bullet webinar will take place on the first Saturday after the quarter end which will be 07/07/18 @ 9:00am CTS. If your unable to attend, please contact Allison for the recording.
Here’s to your success!