Do you pride yourself on your knowledge, skills, and efficiency as a field service business? We don’t doubt you do. Unfortunately, unless you're one of the exceptions, being good at your core business doesn’t seem to be enough these days. Read on to find out how not to fall into one of these 6 business-busting traps!
Based on our experience of working with hundreds of excellent field service businesses, we know that the difficulties they face generally fall under one of six major headings, any one of which can spell doom if they are not brought under control:
- The disorganised schedule
- Revenue left on the table
- Upsetting customers with too much or too little communication
- Poor stock management
- Small debts that add up
- Coping with seasonal fluctuations
Don’t forget to scroll all the way down for a few tips & tricks to avoid ending up in one of these situations!
Let’s start at the top. Often, this problem is part of the “victim of your own success” phenomenon. As service companies grow from being a one or two-man band and take on new engineers to cope with the burgeoning workload, they face an identity crisis, one of the top reasons for business failure. They often want to hold on to being the new guys on the block, continuing to provide a personal and friendly service to the customer base that has been painstakingly built up over the years.
Unfortunately, once a business reaches a certain critical mass, things can’t go on exactly as they did in the past. The little black book no longer works. Engineers and office staff usually have no idea what is going on, or where the priorities are, and things tend to get overlooked.
Are you wondering why your profits are taking a dip exactly when you expected them to grow most? The real underlying cause is probably not what you invoiced but what you didn’t invoice – the money you have left on the table because you forgot to charge the full amount for services rendered.
Of course, the customers themselves won’t appreciate them as such – on the contrary they will be unimpressed by your inefficiency. But most importantly, these freebies leave the company out of its own pocket.
Here are just a few of the reasons why you might be leaving money on the table:
- Underestimating the true cost of the job
- Poor job tracking means jobs go uninvoiced
- Paperwork coming in late, after the job has been invoiced, which means time and parts are not fully charged
- Paperwork is lost so you have to guess the true cost – the customer will only complain if your guess is too high!
- Overestimating the time required and not reallocating engineers’ spare capacity
- High incidence of recalls because the job was not properly briefed
- Customer dissatisfaction because work is carried out behind schedule and customers are likely to demand compensation
If you want to save yourself this trouble, you need to smooth out the friction in your payment strategy. Identify exactly where things go off the rails (hint: it's usually the invoice that goes missing but the true trouble maker is the quote approval process) then discuss it with your staff and implement changes to keep things in line. If the situation is truly dire, consider investing in a software with an estimates portal and automated invoices.
Keeping customers happy – and keeping them loyal – involves a good deal more than being an excellent service engineer. To survive and prosper, these days you also have to be a marketing communications professional.
Maintaining a healthy relationship with your customers is a balancing act. With too little contact they might forget you – or think you don’t value their business – and go to a competitor. But too much, and they will think you're being a nuisance or that you're “desperate”. The following are just a few ways in which you can damage your own business:
- You forget service reminders. These are a great way to gain more secure business with customers that you can rely on.
- Spamming customers. Automating your newsletters is not a free pass to send endless emails to your customers. You need to strike the right balance between work-related emails (such as those reminders we mentioned!) and informative content. What could this informative content be? Well…
- You think having a blog is only for larger businesses. Many people, especially in the field service industry, think that running a blog is something very difficult when in fact it just comes down to thinking about a few questions that your customers ask you all the time. For example, think of how many times you wished people would stop calling you about a task that only comes down to flipping a switch? Well, this can be your first blog. Not only that, but if it’s something that comes up time and time again, your blog could potentially become a high-ranking domain, boosting your business on Google and your reputation.
- Where are the visuals? Whether it’s the newsletter or your new blog, social media or even that quick service reminder, don’t forget about the visuals. After all, a picture is worth a thousand words.
Building a marketing strategy does take time but by taking advantage of your customer database, you can easily keep track of who are your loyal ambassadors and who are your detractors. Social media can also be a great help if you want to be closer to your prospects and add personality to your brand.
There’s no way around it: Stock can easily put you out of business. Mostly because it’s so easy to justify excessive ordering. Some engineers order new parts for every job despite having the necessary items in stock. Either they don’t bother with checking, they’re too rushed to have a look or simply say “Eh, I’ll use the other one next time!”.
But multiple questions arise from this: where will you keep everything? How will you pay for the part that isn’t included in the job? What if some parts get damaged because they always end up in the back of a van? Not to mention the whole separate issue of keeping things organised. At the end of the month, this all comes out of your profit margin.
Remember that sweet old couple whose boiler you serviced for £70 but who still hasn’t gotten around to mailing you a cheque? It’s a bit awkward to chase them with phone calls and it does make sense that the post office is too far away. It’s alright, you’ll just chalk this up as an extra expense. Now, imagine you do this 10 times. That’s easily £700 out the window! We’re not saying you should turn into some sort of debt chasing loan shark but at the end of the day, it’s a business and small debts like these add up.
Many field service companies consider it the norm to have anywhere from £5k to £50k in unpaid invoices at any given time. Not to burst the bubble, but no debt should be the norm here! Payment gateways like SumUp or Stripe can help your business balance its cashflow with instant payments. All your engineer has to do is carry a small device and set-up an app. This way, customers can pay on the spot and you’re not sitting around waiting for the mailman. Sometimes, it's simply about making paying easier.
These seasonal fluctuations are the bane of almost every field service business. You get swamped with jobs in the winter, so much so that you hire more engineers but it all dries up in the summer. Now you have to pay for those extra employees without the extra revenue. This is one of the easiest recipes for going out of business as a field service company. Not to mention that no one likes to be the boss who lets go of engineers so soon after they hired them.
Some field service companies have come up with the idea to create a “subscription service”, where the customer pays a small monthly fee and gets perks like 24/7 availability or discounts. This way you gain a fixed income and they have the peace of mind that an engineer is always one phone call away. It works a bit like insurance. 9 customers out of 10 will never call and that 10th job has already paid for itself.
Tips & tricks to stay in business
The trick is to adjust to the new reality: you are no longer simply small enough to care; you are also big enough to matter. How you deal with this new reality will depend on how you see your business not just now but in five years from now.
Here are a couple of tips:
- If you are the owner, how do you see your leadership role? Will you remain the “lead engineer” or will you transition into a general manager?
- If you are committed to staying out in the field, you should invest in some excellent admin support.
- Technology is almost certainly going to be a part of the solution to the challenge of keeping track of jobs. It might start with something as simple as a spreadsheet and/or an Outlook calendar but in the long term you will probably need a powerful dedicated solution such as Commusoft, with multiple features that will help you along the way. At the end of the day, job tracking is the biggest growing pain for successful service companies.
- Of course, some jobs are simple. You get a call, you turn up, you do the job, and you invoice. All done, checked every box. This is normal for a start-up company. But if you’re an established firm getting the volume of business you’d like, you can count yourself lucky if much more than half of your jobs run so smoothly. Chances are you suddenly find yourself having to deal with a mixture of challenges - tracking engineers, sending estimates, appeasing customers, marketing, etc. Then you will have to figure out a strategy to identify the priorities.
All in all, it’s tricky to balance everything. Which is why implementing a great job management software can help you eliminate all these issues and take your business to the next level. Click below to schedule a demo!