"One way you waste a lot of money is when you send your technicians to the store."
I promoted someone to operations manager. He knows what materials to get, places the order ahead of time, puts all that information in the job, where to pick it up. That can save you $50–75 a day. We also like block pricing*, as it helps me make it simple for the customer.
The move: Stop paying skilled labor to run errands. Pre-ordering materials and putting someone in charge of that process recovers hidden costs fast. And if your pricing has a dozen line items, it’s time to simplify. Block pricing can protect margins without confusing customers.
*Block pricing is a simple way to bundle a set amount of work into one upfront price.
"If there's pushback, they're just not my client."
We do price increases every quarter. If I do it annually, there's the 80/20 rule—we might lose 20%. So if I lose maybe one or two clients quarterly because of a pricing increase, that's fine. I think it’s become a norm that we’re increasing our prices, so there’s not a lot of pushback. We also do a lot of route optimization, and we have a cancellation policy.
The move: Don't wait until the year-end to act. If it fits your business, smaller, scheduled price increases can be easier for customers to absorb—and easier to recover from if someone leaves. Set a pricing cadence, enforce your policies, and let customers decide if it's still the right fit.
"We started hard auditing our lowest-paying customers."
Right before costs started going up, we were already working on route optimization. We reassigned them to the houses closest to them, so they're not driving 45 minutes to clean a house on the other side of town. On top of that, we started hard auditing our lowest paying customers and anybody that's going way over time with scope creep.
The move: Route optimization doesn't just save gas, it buys back hours. Pair that with a hard look at your client list, and you might find your most demanding customers are also your least profitable. That's where price increases can start.
"I felt really bad that people are using their vehicles. So I actually did a flat rate."
All of my technicians use their personal vehicles. In my state, there's no obligation to pay mileage reimbursement, but regardless if you drive 1 hour or 8 hours, I pay everyone $12 a day just for using their vehicle. That's helped a lot with the rising gas prices. And I've been buying supplies in bulk, working directly with manufacturers and distributors.
The move: A flat daily vehicle allowance is predictable for your budget and fair to your team. On the supply side, buying direct and in volume is a simple way to protect margins when material costs won't sit still.
Heading into your next pricing or cost review, ask yourself:
If customers are never saying no to your quotes, your prices are probably too low. Electrical pro Wilson Betances shares a simple pricing formula to figure out what you should actually be charging. Plus, why a 5% price bump can grow your profit by 25%.
Should you lease, buy new, or buy used vehicles?
Beau Batcheller and Kyle MacDonald's take on building a reliable fleet without killing your cash flow: leasing usually costs more than it looks, a breakdown costs way more than just the repair bill, and if you're starting out? Two cheap backup trucks often beat one nice one.
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