For over a dozen years,
NSPG has been providing the tools that allow contractors to
increase profits and minimize business hassles. With our
simple-to-use-tools, you can make being a business owner
what you always wanted to it be -
successful, profitable and rewarding.
During quarterly Phone Review sessions with Numbers
Cruncher users, we have been noticing more and more
price competition issues. These pressures have
lead to lower close rates for some companies which
require new breakeven calculations and new Printed
Price Books. The reason for this new business
environment may be unclear to many business owners.
The obvious answers are in the news every day. The
housing "bubble" is bursting, sub-prime loans are
in default, and record numbers of foreclosures are
happening. This bad news can make homeowners and
businesses reluctant to commit to work at any price.
Financial uncertainty can be a sales killer for even the
best run service companies.
On top of the expected increase in price resistance,
there is another factor at work here. Over the
last decade, new construction has boomed. Cheap
credit allowed home buyers and businesses to make
purchases at a record pace. This in turn created
demand for companies that specialize in New
Construction. These companies had a ready supply
of jobs to keep them busy, and kept them out of the
Multiple, small repair jobs are unattractive to these
companies during boom times. They see service as a
high cost and high effort business compared to new
construction. It's much easier to send your
employees to a job site where they work eight hours a
day for five or six days a week than to find two or three
service calls every day. But, the boom times are over
many places for now. Not only are the New
Construction companies feeling the pinch, but so are
many Service companies.
As the New Construction companies search for new revenue
and to keep their people busy, they inevitably move into
Service work. The problem for them and for
existing Service companies is that they often don't know
their breakeven in the Service world. Their hourly
labor and overhead cost calculations are based on close
to 100% productivity. In the Service world, 50%
productivity is closer to reality. Because their
numbers are incorrect, they can lose money every day.
This is bad for them, but it is also bad for the Service
businesses that know their own numbers. The
formerly New Construction only company that is now in
the Service business is a new low price competitor.
Unlike your typical money losing competitor, they may have
nice trucks and a staff to provide the higher level of
service that your customers expect. They probably
won't know they're losing money every day for several
months or more because they will be busy taking over your
customer base with their money losing prices.
So, what can you do?
Crunch your own
Numbers regularly to account for any changes in your
business. You must be confident that your
Selling Price is correct.
If you feel that there
are some jobs that you are losing based on a trip
charge, build the travel time into your overhead
cost, and eliminate the trip charge.
If you have specific
Tasks that you need to be more price competitive on,
you can build a "loss leader" into your pricing in
Once you have your
numbers up to date, print new Price Books.
Clean, crisp, full color laser printed books can
help make the sale.
Set up a checklist for
use on every service call. Offer free
inspections that can highlight possible areas (like
washing machine hoses, and aging water heaters) in
need of repair or replacement . Offer to fix
it before in causes any damage.
Work your existing
customers. Send out a postcard or distribute a
door hanger with a "Special Offer" that will get
them to call you.
Your field personnel
must understand that Sales
is a critical part of their job.
They need the training and skills to be able to
communicate the value of your services to your
If you need help with
your Numbers Cruncher review, give us a call.
Existing Numbers Cruncher users can take advantage
of our package pricing on our complete quarterly
review package which includes a Numbers review, Flat
Rate Book printing, and creation of an ongoing
Pricing and Sales plan.
If you're a company
making the change from New Construction to Service
work, Crunch your Numbers to include the higher
costs associated with Service. Do this on a
spreadsheet or call us and we can get Numbers
Cruncher to you overnight.
The bottom line is that the business is changing every
day. You need to be aware of the changes and make
adjustments to meet the new challenges. We all
have to remember that a problem
at your competitors can cause problems for us. A
monthly review and quarterly adjustment of your numbers
can head off some unpleasant surprises.
Measure Monthly, Adjust Quarterly
& Achieve Annual Profit Goals
How Air Conditioners Work
Explanation of AC that your customers can understand.
Schedule and explanations from the EPA.
huge blocks of ice to cool a NYC skyscraper.
Back to the Future II
Using ice to cool residential buildings.
Electrical pulses into cooling tower water lines
eliminate the need for chemicals and reducing operating
In This Issue
Phone 800 841-8542
The freebie of the month is a web site or
product that we feel gives you some-thing worth looking
at or using that costs you nothing.
This month's freebie is
not really a free service, but it is valuable advice.
As we all know, Windows Vista was released by Microsoft
earlier this year. In the past, a new Windows
release would be a reason to upgrade right away, but
Vista is different. The hardware requirements and
security changes make Vista incompatible with most older
hardware and software.
For many companies, the
best choice is to wait to upgrade. While you're
waiting, there are a few things you should do to improve
the security of your current computers and extend their
life as long as possible.
ComputerWorld has an article on line that will help
you do just that. They claim that it is possible
to extend the life of Windows XP until 2014! Most
of their advice involves improving the security and
performance of your current system, and are all
relatively easy to implement. Perhaps the most
important information is their advice on the regular
maintenance we all tend to neglect. Links are
provided to free tools for improving the security,
performance, and appearance of your XP machine.
They also point out that
Microsoft will support XP for another 7 years, and will
even be releasing an update to XP in the near future.
Even if you don't
expect to run your current computers for another 7
years, the advice and resources in this article can
significantly improve your systems until you make the
move to Vista.
If you have
a favorite Free site, let us know.
It is critical for any
business to have their prices set at a profitable level.
With the rapidly changing market conditions we have
today, it is more important than ever to review your
costs and be sure you're making a profit every day.
With Numbers Cruncher,
you can quickly review your overhead and labor costs to
be sure that what you charge accurately reflects you
business. You should pay particular attention to
your field employees' productivity. Small
changes in hours sold can make major changes in your
breakeven and profits.
Take a look at our
article in the May issue for a refresher on the
built in Productivity estimator in Numbers Cruncher.
If you need a little help
with your reviews and planning, give us a call.
Our quarterly review plan can make profitable pricing an
easy to implement part of your business operations.