Do you know the profitability of your business?
Profitability is a huge factor in any business, yet a profit and loss only tells you so much, and for service businesses especially, when it comes to tracking profitability very few can tell you which customers, contracts, sites, or assets are the most or least profitable. Managers undoubtedly have a good ‘feel’ for what’s working and what isn’t, but that only tells us so much. So basically, they’re just guessing.
If you don’t know if your service contracts are profitable, then you also don’t know how to remain competitive with your pricing and you can’t plan for growth. Simply put these businesses are stuck and that’s why so many businesses initially grow to a size the internal team can manage and then they just maintain that level, they don’t grow, despite the best intensions and investments.
You might be thinking if they focused on reporting and having visibility, they wouldn’t have these profitability problems. But to get meaningful data which you can analyse and use for decision making, first you need to capture the right information, and that’s all about the system the service teams use, because that’s the starting point for most of your data.
So is it just too difficult?
Nearly all the data you need to capture is from Engineers or Operatives in the field delivering work for customers. If you can capture information accurately and quickly at the right time, you can reduce admin, eradicate duplication, and start to build up useful data for decision making.
But it’s got to be simple, and quick to complete, with a good interface, otherwise Engineers take the path of least resistance (we all do) and input the minimum.
Once you get good data, you can make decisions that will transform your business, from better pricing to real conversations with customers about the assets or sites that drive up their maintenance costs, or preventative work that you think would save them money.
By tracking service operations accurately and efficiently you don’t just improve service you improve profitability and can help to grow your business.
So, before you say we’re making money, ask yourself do you know exactly where and how, because if you did, you would be transforming your business to do more of this work and be able to track your progress. And I bet most service businesses can’t do that. But it’s not all doom and gloom because the technology is available, more affordable, and capable than before and it’s those businesses that question where the profitability lies and asks the right questions of their provider who are able to unlock this data and with it gain considerable competitive advantage.
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