It’s not all about the ‘books’, and accounting where a service business can leak profits. It’s in EVERY area of the business. I already shared 10 hidden profit leaks from some of the amazing guests I’ve had on the Profitable Home Services Podcast, and I have 10 more. Believe me when I say there ARE more areas we can dive into. I hope their insights on what they think are major profit leaks in a service business sheds light on your own business, so that you can plug them and put more money in your pocket.
Use this as a checklist to plug those profit leaks in YOUR home service business. I also give the links to the episodes to listen to the whole conversation to glean even more insights.
You’ll learn to avoid:
- Mistakes that create duplicate calls and work with Ron Saharyan
- Forgetting about past clients that can generate repeat business with Bill McGowan
- Confusing the difference between profit and cash flow with Mike Milan
- Technician errors and callbacks by creating solid SOP’s with Diane Gardner
- Using an outdated price book with Tersh Blissett
- Paying employees who are not performing well (especially family) with Ellen Rohr
- Overuse of meetings that waste time and money with Jeremy Lowe
- Invisible costs of employee turnover with Rhamy Alajael
- A lack of checklists that foster ‘wow’ service with Dave Sullivan
- Only marketing to new customers with Diane Gardner
Key Moments:
[00:11] Top 20 Profit Leaks Every Business Owner Should Avoid
[04:02] Profit Leaks in the Customer Service Representative Team
[14:02] Boost Team Morale and Productivity by Addressing Underperforming Employees
[15:37] The Perfect 10 Checklist for Exceptional Service and Customer Satisfaction
[20:47] Building Customer Relationships Builds Trust and Retention
[24:06] Maximizing Bottom Line Profits for Home Service Businesses
Doing The Work Twice – Ron Saharyan
Many service-based companies face the frustration of having to redo work due to errors. For instance, when Ron needed his water filtration system upgraded due to a sulfur problem, the initial technician installed it incorrectly, causing further issues. Despite the tech’s apology, the company couldn’t send someone immediately, leading to dissatisfaction and additional costs when they had to hire another company to rectify the mistake. Such incidents not only disrupt service but also eat into profit margins, highlighting the importance of quality control and swift resolution in home service industries.
Ron Saharyan: Profit First Professionals – Listen To The Episode: https://taxcoach4you.com/business-finances/
Forgetting Current Customers – Bill McGowan
A common issue is when service providers, like plumbers and electrical companies, tend to overlook their existing clients, despite the potential for repeat business. It’s so easy to maintain contact with clients through initiatives like a thank you postcard program, which costs about $0.74 per postcard. By sending personalized postcards with service details and coupons, companies can show appreciation and encourage future engagements. A ton of businesses are actually reluctant to invest in even this minimal amount towards client retention efforts, ultimately risking losing valuable customers.
Email newsletters are a cost-effective way to stay connected with clients and foster business growth. It is crucial to prioritize client retention and expansion efforts, which prevents good clients from slipping away. Because with them goes revenue and profits.
Bill McGowan: Print Fast – Listen to The Episode https://taxcoach4you.com/print-marketing/
Not Realizing Profit & Cash Flow Are Different- Mike Milan
Most home service business owners don’t realize that profit and cash flow are different. They look at the bank balance and wonder why it doesn’t match the profit number from the Profit & Loss report.
They understand that they need profits but they don’t understand how profit and cash flow work hand in hand. Profit creates cash flow and without sufficient cash flow, the business can be hurting, and even at times, may go out of business. A healthy business needs both profits and sufficient cash flow.
Mike Milan: Cash Flow Mike – Listen To The Episode: https://taxcoach4you.com/mastering-cashflow-management/
Training Without Tight Processes – Diane Gardner
If technicians aren’t trained well with processes, procedures, checklists and SOP’s, the result can be errors and costly callbacks, which drastically affect profitability. If jobs are not completed correctly the first time, it not only costs time and resources to fix the issues but it also results in lost profits from potential new jobs. This can result in a very large profit leak!
Callbacks can be a result of poorly trained technicians or technicians who haven’t bought into the mission & vision of the company. Ensure you have set procedures and systems in place, with checklists and SOP’s that allow for the technician to check every step and avoid omissions. You may need to consider additional training for technicians and overall company training so all team members can catch the vision and become 5 Star team members. Closely monitor the number and type of callbacks so you can fix this very important profit leak.
Diane Gardner: Tax Coach 4 You – Listen to the Episode: https://taxcoach4you.com/cash-flow-analysis/
Doing The Work Twice – Ron Saharyan
Many service-based companies face the frustration of having to redo work due to errors. For instance, when Ron needed his water filtration system upgraded due to a sulfur problem, the initial technician installed it incorrectly, causing further issues. Despite the tech’s apology, the company couldn’t send someone immediately, leading to dissatisfaction and additional costs when they had to hire another company to rectify the mistake. Such incidents not only disrupt service but also eat into profit margins, highlighting the importance of quality control and swift resolution in home service industries.
Ron Saharyan: Profit First Professionals – Listen To The Episode: https://taxcoach4you.com/business-finances/
Forgetting Current Customers – Bill McGowan
A common issue is when service providers, like plumbers and electrical companies, tend to overlook their existing clients, despite the potential for repeat business. It’s so easy to maintain contact with clients through initiatives like a thank you postcard program, which costs about $0.74 per postcard. By sending personalized postcards with service details and coupons, companies can show appreciation and encourage future engagements. A ton of businesses are actually reluctant to invest in even this minimal amount towards client retention efforts, ultimately risking losing valuable customers.
Email newsletters are a cost-effective way to stay connected with clients and foster business growth. It is crucial to prioritize client retention and expansion efforts, which prevents good clients from slipping away. Because with them goes revenue and profits.
Bill McGowan: Print Fast – Listen to The Episode https://taxcoach4you.com/print-marketing/
Not Realizing Profit & Cash Flow Are Different- Mike Milan
Most home service business owners don’t realize that profit and cash flow are different. They look at the bank balance and wonder why it doesn’t match the profit number from the Profit & Loss report.
They understand that they need profits but they don’t understand how profit and cash flow work hand in hand. Profit creates cash flow and without sufficient cash flow, the business can be hurting, and even at times, may go out of business. A healthy business needs both profits and sufficient cash flow.
Mike Milan: Cash Flow Mike – Listen To The Episode: https://taxcoach4you.com/mastering-cashflow-management/
Training Without Tight Processes – Diane Gardner
If technicians aren’t trained well with processes, procedures, checklists and SOP’s, the result can be errors and costly callbacks, which drastically affect profitability. If jobs are not completed correctly the first time, it not only costs time and resources to fix the issues but it also results in lost profits from potential new jobs. This can result in a very large profit leak!
Callbacks can be a result of poorly trained technicians or technicians who haven’t bought into the mission & vision of the company. Ensure you have set procedures and systems in place, with checklists and SOP’s that allow for the technician to check every step and avoid omissions. You may need to consider additional training for technicians and overall company training so all team members can catch the vision and become 5 Star team members. Closely monitor the number and type of callbacks so you can fix this very important profit leak.
Diane Gardner: Tax Coach 4 You – Listen to the Episode: https://taxcoach4you.com/cash-flow-analysis/
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