How to Overcome Tough Times in Your Business & Rediscover Profitability (Part 2 of 2)
How to Overcome Tough Times in Your Business & Rediscover Profitability (Part 2 of 2):
The Correct Way to Increase Your Revenue NOW!
In my last blog, we talked about what you should be doing when times get tough in your business. How do you go about getting back to profitability? Business basics tell us there’s two things you can do: Spend less and sell more. I highlighted a few core things you can do starting NOW to dramatically reduce your expenses—please, if you haven’t read that blog, I ask that you give it a click.
In talking with contractors over the years, when I ask them what they’re doing to increase revenue, far too many say: “Well, I keep hearing from people that I’m too expensive. So, I’ve cut my prices, and I’m hoping to run more calls.” If this sounds like you, STOP THAT LINE OF THINKING NOW!
Reducing your pricing or offering more discounts is the last thing you should be considering in your business if you’re struggling to make a profit. There’s nothing guaranteeing you’ll be able to pick up more calls. And even if you do get more calls, you’re running the risk of exhausting your technicians—some of your guys may even quit because of it!
Want to generate more revenue? Then you need to do two things right now: 1.) Start charging a service fee, and 2.) Raise your prices—and be worth your higher price. Let me explain…
When you go to the doctor for a check-up, that’s not a free service is it? Of course not! You pay for the doctor’s evaluation, and people should be paying for your professional opinion! After all, you’re spending money and time to drive out to their home… Going out there isn’t free to you! So, start charging a service fee right now! Tell people about it when booking the call, and then always collect on it… Don’t wave it if you get the job.
Once you’re in the home, you need to be charging more—not less. Again, in looking at hundreds if not thousands of businesses over the many years, I can tell you that almost everyone undercharges… at least a little bit. So, start steadily increasing your prices right now!
Here’s the thing: You must give homeowners a reason to spend more on you! So, if you charge a higher price, make sure homeowners feel like they’re getting value for their dollar. Much of it has to do with perception. That means, cleaning up your service vehicles and having them professionally wrapped. Your technicians should be wearing clean, white, button-up uniform shirts and dark-colored uniform pants. No tears in anything. And ask your techs to clean up… It would help if they showered and shaved before coming to work. You want customers to like you—not be afraid of you.
Finally, if you want to charge more, in addition to presenting yourself properly, you need to start training. Teach your technicians how to explain repairs to homeowners, so they know WHY they’re spending the money. Teach your technicians to spend the extra time looking in the home for other problems that exist—and asking the homeowner if he/she would like those repaired! After all, it’s better to cure the problem NOW than later when it becomes an emergency.
Implement those few strategies and I’m confident you’ll be making more money in no time. And when you make more money, along with using my advice to reduce expenses from my previous blog, you’ll soon be back to profitability… and back to feeling better about your company’s future.
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