The phone rings in the office. “My air conditioner’s stopped working. It’s going to be 35 degrees tomorrow. Can you fix it today?”.
For many service businesses, speed of response to their customer’s needs is one of the key criteria they’ll be judged on. At key times of the year, managing one of these businesses can be chaotic – a mix of urgent work, scheduled work, and job over-runs.
The owner’s time can be spent totally in the business. Meeting sales prospects. Preparing or reviewing quotes. Setting up the work schedules. Organising materials. Dealing with customer problems. There is no time left to actually plan the business direction.
Knowing your team
When all the owner’s time is spent doing the day-to-day work, how can they possibly be in control of the business? Do they really know which technicians are performing well and those who are not? Do they have a handle on the material costs for each job? Do they know which type of work or customer gives them the best profit?
An owner of a very small business will be close enough to his staff and customers to gauge performance. But once the number of operators is in double figures, it becomes harder to control.
This is where the owner of a growing business will do well to invest in cloud-based systems which help with management of the business operation, as well as providing information critical for measurement of performance. Features of these systems can include:
Using a job management system like this will allow key business information to be more readily shared. The integration of the different functions into a single system also eliminates a lot of paperwork and duplication of effort.
This gives the business owner more time to focus on planning the business for greater success.
With quality data produced from a business management system, meaningful analysis can be done.
It’s important to ensure that costs reported in the business management system are matched in the accounting system:
You should then be able to correlate the costs in the job management system with the cost of sales from the accounts system, allowing for movements in stock and work in progress.
Once you have a lot more understanding of your business profitability:
These reports are a powerful management tool.
The measures outlined above apply to many different types of service business. Trades such as plumbing, heating and cooling and electrical. Custom manufacturing work. Professional services such as legal firms and marketing services.
If you want help to set up a reporting system which gives you an incisive breakdown of your business profit by month, by job, by product or by service, you should consider using a Virtual CFO.