Field Service Profit: 5 Tips From An Expert
February 15, 2022 | Read: 11 minutes
Oftentimes, we see articles in the media, promoting the latest trends in business management.
But they always seem tailored to enterprises and billion-dollar companies not for field service profit.
The truth of the matter is that 99% of American businesses qualify as small-to-medium (under 500 employees), according to a JP Morgan Chase study. This means they provide a majority of the population with employment opportunities and services.
The field service industry follows these trends too, and not everyone can afford to spend a million dollars on made-to-measure software. Therefore, it’s vital to create field service management solutions that cater to them.
This is why we’ve reached out to Ken Wentworth, also known as Mr. Biz, who heads the consultancy firm Mr. Biz Solutions. He’s an expert with more than 20 years of experience advising businesses on how to establish a stable financial path. If you’re already thinking ‘But wait, my company is too small to hire a consultant!’, don’t worry.
Mr. Biz specializes in affordable small business solutions, with many field service clients, and offers a customizable, subscription-based service to anyone who wants to take their business to the next level.
Without further ado, we’ve asked him a few questions:
1. Meet the Expert: Ken Wentworth
Tell us a bit about yourself, Ken, and the great work you do with small-to-medium businesses.
First, thank you very much for the kind introduction & the opportunity to help more business owners. I was fortunate to develop my expertise during 20+ years in leadership positions while rising to the top 3% at a Fortune 15 company.
Subsequent to my corporate career, I have authored two bestselling business books – “Pathway to Profits” (this title made it to #1) & “How to Be a Cash Flow Pro” – that have helped thousands of business owners.
I have been quoted as a business expert in the media many times – including Forbes, Fast Company and Business News Daily, among others.
I also host a successful radio show, B2B Radio, which focuses on helping business owners. In a nutshell, I help owners improve their field service profit and efficiency through both 1-on-1 interaction and, as you alluded to, a subscription-based model.
2. What are the Most Common Problems You See When Companies Come To You for Help?
The four most common problems I encounter with business owners, regardless of industry or company size are:
Human capital
Finding quality workers efficiently & keeping them long-term is a constant concern with virtually every business. I once had a business owner tell me he had to interview 15 candidates just to find 1 solid employee.
That is no way to operate! As a result of this situation, he delayed the hiring process (because it was so time-consuming & frustrating), which over-worked and frustrated his existing staff. It became a vicious, negative cycle that was spiralling out of control! He was losing his star players because of the situation – not good.
However, it IS fixable in most scenarios.
Cash flow
Simply put – without cash, there is no business. You can’t pay your employees and you can’t pay your vendors. In that situation, your company ceases to exist. That’s not field service profit by any means. Fortunately, I am a cash flow pro so I can help!
Pricing
I will put it this way – I have never worked with a business that had their pricing 100% nailed down. Improving this by plugging money leaks increases net income without additional work.
In fact, due to unknowingly taking on unprofitable projects, sometimes you can improve net income by doing LESS work. Hard to believe but true! That’s what business efficiency is.
The Complete Guide on How to Increase Productivity in a Field Service Business
Budget for More Field Service Profit
This is a game-changer for every business looking to improve field service profit. We can only better what we regularly monitor, right? A budget is an optimal way to measure the financial health of your business every month to ensure you are moving towards your goals. It also enables you to make adjustments and optimize your business.
Find out what is working, what isn’t & how to address it before too much time (and opportunity) passes. A budget is one of my 3 pillars of financial success – it is that important!
Thankfully, I can help with all four of these challenges. We create a program that leads to success in each of these areas, as well as several others.
3. What is the Impact of Digital Solutions When it Comes To Being More Efficient?
Yes! Efficiency as a means to boost field service profit could easily be an entire book in itself. In my experience, digital solutions are most often the best way to work smart, not hard.
We all want that, right? In my mind, digital solutions are a form of automation. Think about this – where would our society be if, over the years, we shunned automation? Forget gas engines and email – we would still be using horses to get around and deliver messages. Pony Express anyone?
Do you want your business to operate like that? Of course not! Digital solutions allow you to continually raise the bar in your business. You have to be able to eat change for breakfast in order to thrive over the long-term. Don’t allow your competitors to get ahead of you by ignoring the multitude of valuable options available.
Of course, as a self-professed “numbers nerd”, I recommend doing a solid analysis to determine the impact these solutions will make to your business, then compare that to the cost.
From there, you can determine how long it will take for the new solution to pay for itself. In my experience, owners are often quite pleasantly surprised at the positive impact these changes can make in a short amount of time. Don’t close your mind to these potential lucrative options!
Consider this – if your efficiency save is “only” 5% and your annual payroll is $500k, that is a $25k savings! How much would you be willing to invest in a digital solution with that return?
4. Why Do You Think SMBs Suffer From Poor Cash Flow and What Should Managers Do?
Cash flow is THE most common challenge I see. It’s the opposite of field service profit and it’s the reason I wrote my first book, “How to Be a Cash Flow Pro” – and I also discuss it in “Pathway to Profits”.
It impacts so many business owners. In fact, to dispel a common misconception, cash flow issues can impact businesses of all shapes, sizes & ages. I have seen successful companies that have been in business 15, 20 and even 25 years have cash flow challenges.
Likewise, I once worked with a $6 million dollar business that, when they hired me, couldn’t pay all of their bills each month. Would you call that success?
Basically, no business is immune from it. In fact, a US Bank study showed that 82% of all business failures are due to cash flow problems.
I am an eternally positive person and, as mentioned previously, a numbers nerd, so I like to flip the script: I tell my clients if they can master cash flow, they only have an 18% chance of their business failing. Who doesn’t like those odds for more field service profit?
I think that is the case because, oftentimes, business owners are amazingly skilled at what they do – plumber, electrician, HVAC, landscaping, chimney sweep, etc. – but not always as well-versed on the financial side of the business. For example, most people think “profits” and “cash flow” are synonymous, but that is not the case.
In fact, your financial statement could actually show a field service profit, but you are having difficulty making payroll every two weeks. It can be a tangled web to understand. The important piece is to ensure you recognize if you don’t understand it – don’t fake the funk, as I like to say.
The first step to improving cash flow (among many) is to shorten your payable/receivable cycle – the time between when you pay for labor, materials, overhead, etc. and when you receive payment from your customers. There are a whole host of ways to accomplish that.
For example – how they’re invoicing, the wording on invoices (yes, this has a huge impact), the timing of your invoices, your credit terms, your use of credit cards, etc. I could go on-and-on regarding cash flow!
That is probably why my clients call me the “cash flow pro” – haha. My goal is to make THEM the cash flow pros.
5. What is Something That Five Years From Now Every Field Service Company Will Regret Not Getting on Board With?
You hit the nail on the head! There are numerous “blue blood” retail names that have failed in the last 2-3 years. The primary reason? They didn’t keep up with their customer base trend, specifically automation/digital solutions. They completely missed the boat with their online presence.
Even currently, there is still a massive online opportunity (not kidding)! What business owners out there want to create an opportunity? Here you go – these stats are almost unbelievable:
- We have now officially crossed the threshold – 51% of people prefer to shop online! This number will only continue to grow as the next generation, that has grown-up with online commerce, ages.
- HOWEVER, even today, only 26% of small businesses have an online store. What are the 76% doing?
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So, on average, if you create an online store, you have an 76% opportunity to gain an edge on your competitors. Of course, that average varies by industry, but I am certain that opportunity exists in the field service industry!
Many in the field service industry will say – “I don’t have anything to sell online”.
Oh, but you do! You just don’t realize it.
The simplest example is an annual plan or annual maintenance plan. You might say that sounds too simple but people, including Mr. Biz, like to “set-it-and-forget-it”. As I often tell my clients, make it as easy as possible for your customers to do business with you. Not only annual maintenance plans, but appointment booking is another online option many prefer.
Would you like to have an online booking form?
Take a look at the Commusoft solution!
Beyond that, there are a plethora of other options that most don’t consider. How about a prepaid instalment plan for a major system or fixture replacement? Think about it – this locks you into your customer for major repairs and replacements or services. They aren’t going elsewhere if they have prepaid you, right?
As a bonus, you can offer them “VIP” treatment with preferred appointments. For example, maybe you offer guaranteed service within 4 or 8 hours for emergencies? Who wouldn’t want that benefit? They know they won’t have to wait longer than that time period for service.
Anyone who has lost their HVAC during the hot or cold season and had to wait several days because of the volume of calls during that season has lived the “pain” and won’t likely want to repeat the experience.
That goes for several other industries – electrical (who likes being without electricity in their house?), plumbing (cold shower, anyone?), chimney sweep (what if you depend on your chimney for heat, but you can’t use it due to a problem?) or even landscaping (you have a regular yard service, but you have an upcoming event you’re hosting & you need trimming, edging and mulching).
The opportunities are plentiful; don’t neglect them if you want more field service profit.
Five years from now, the world will be even more online (no doubt!). As always, it will come down to making it the easiest to do business with your company. Those that do will prosper. In most cases, that will mean embracing automation!
And there you have it! Straight from the expert himself.
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