How to Manage a Service Business in 2020 | 8 Tips from Experts
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When you manage a service business, achieving company goals often entails overcoming significant challenges and uncertainties because of marketplace changes or other unforeseen circumstances.
ServiceTitan helps business owners, tradespeople, and contractors face those challenges with confidence and capabilities that rival any other tech-enabled business in today’s market. In that spirit, we reached out to some of our valued partners and customers to ask what advice they thought every home service business owner should know to ensure profitability and growth year after year.
Managing Your Home Service Business
Some of the most popular solutions recommended for business growth include:
Data tracking: Know how money flows in and out of your business, track productivity, job profitability, and other important data metrics.
Customer nurturing: Exceed expectations, build relationships, get more online reviews, and foster word-of-mouth referrals.
Cost calculation: Stay hyper-aware of business spending.
Accountable marketing: Measure success by return on investment.
Proactive execution: There’s no time like the present to better your business.
Read on for specific examples.
1. Data tracking for your home service business.
ServiceTitan’s field reporting software gives home service business owners the ability to analyze important data collected on each job and every customer interaction in the office. Business owners and managers can then use the data analytics reporting to track KPIs (key performance indicators), and see in great detail which aspects of the company perform well and which parts of the business operations need some work.
“Every business owner must review how their marketing is performing regularly,” Jeff Seale, Owner/President of Accurate Home Services in Glendora, Calif., says. “You have to know how many calls you are receiving from each marketing source, what percentage of those calls are converted to booked jobs, how many of those jobs are closed in the field, what revenue they generate, and ultimately your ROI.
“ServiceTitan allows us to track each of our marketing sources with a unique phone number, so we can review all the above and more … right down to listening to every call. You can only make informed marketing decisions if you have this information. Otherwise, you're just guessing.”
With ServiceTitan, home service business professionals tailor their reporting dashboards to display metrics and KPIs that mean the most to their businesses, whether that means tracking revenue by day, week, or month.
“I feel that it is important for every business owner to monitor their gross profit on all work being completed,” Nick Morena, Finance Manager for Shanklin Heating & Air Conditioning in Dalton and Massillon, Ohio, says. “Growth is great, but if the margins aren’t good, then growth can cripple a company—because with growth comes an increase in operating expenses.”
Job types come with different returns on investment. While preventive maintenance might not rake in the dollars, it proves necessary to build loyal customers who will call with larger jobs when needed and to provide recurring work during slower seasons. But for that reason, home service business owners must track how much profit each job and technician brings in.
“The one thing every business owner should do is know their break-even price per hour,” Tony Dunaway, Owner of BEST Plumbing Service of Cincinnati in Ohio, says. “This number is based not only on your cost of doing business, but mainly on your billable hour efficiency (BHE). We only generate revenue for our business when we turn a wrench. We do not get paid to drive to a job, pick up parts, train our techs, talk to customers, etc. You have to track that downtime, and factor all of that lost time into your selling price.
“A well-run service company can run at 50 percent to 60 percent BHE. A company that runs at 50 percent BHE has 1,040 lost man-hours per tech per year, which they cannot bill for. If you are not priced right, you can be losing money on every call.”
2. Focus on your home service business foundation.
When learning how to start a service business, you may take on preventive maintenance system checks more often than major repairs. Those small jobs will help your business steadily grow.
“There are so many things that a business owner must do to ensure a profitable year and to sustain growth,” Wayne Whittenburg, GM of SMW Refrigeration & Heating in Tempe, Ariz., says. “If I had to choose just one thing, I would say focus on the foundation. Our foundation is definitely our customer base. More than 50 percent of our annual revenue comes from our Comfort Club members and the referrals they gift us. We show our appreciation with referral rewards and discounts on new products.
“Before ServiceTitan, we relied on customers to call and schedule their preventive maintenance appointments, and we missed a few. Now, our Comfort Club members never miss their maintenance calls, and more happy members means more referral business. In short, customer service is key.”
3. Manage your home service business with technology.
Customers no longer expect to be handed some loose papers on a clipboard. They want to digitally sign contracts and have the information emailed to them for their records. With ServiceTitan Mobile, techs travel with the exact same information they can access in the office. Review service history, create quotes, or close out jobs all from a smartphone or tablet.
"My No. 1 recommendation is to leverage your technology,” says Craig Elliott, Chief Optimist for Nice Home Services LLC in Lorton, Va. “You must take advantage of the power at our fingertips that has never existed before. With ServiceTitan, we can build on our technology stack to leverage time through software like never before. Make sure you use a unified chat system to communicate with your team. This is the time for unifying and leveraging technology, and taking your business to the next level."
The right technology allows home service companies to streamline processes and run more efficiently.
"Take a look at the business you’re already paying for, receiving, and completing, and find ways to do it faster, better, and more accurately.” Tyson Freeman, GM of Lee's Air in Fresno, Calif., says. “Process optimizations will minimize costs and put more dollars to the bottom line. Optimizations implemented now save money today and every time you perform that task in the future."
4. Make happy customers for life.
Customer referrals make or break a business, and become especially important when your business centers around being in customers’ homes.
“As always, customer satisfaction is always key,” Danielle N. Kirkpatrick, Office Manager for Kirkpatrick Homes, Inc. in Pulaski, Tenn., says. “Making sure each customer is satisfied and happy gives you the chance to obtain a customer for life.
“Aside from that, in this era of technology—which is constantly changing—it is important to not only have a social media presence, but also keep it up to date and relevant. We have actually noticed our competitors using our social media tactics of highlighting employees and sharing our charitable contributions, which is great because that just means more encouragement for their employees and a better outlook on their community.”
Each home you visit provides an opportunity to earn a customer and loyal referral source for life.
"Focus on helping every customer have their perfect home and experience with your company,” Brian Hortin, GM of Absolute Air in Utah, says.
“That's the goal we start with for every meeting within our company, and it helps us ensure every decision we make is intent on doing what's right for the customer.
“Why do we do a system diagnosis and not just a symptom diagnosis? Why do we review all our recommendations and allow the customer to decide what to do without pressure? Why do we wear booties, text them our picture and bio, call the day after for a Happy Call, and more? To ensure each customer's experience with us is as close to perfect as possible, and to ensure that their home is as close to perfect as possible.”
5. Operate your home service business with values.
Businesses create mission and vision statements, plus a set of core values, which may be displayed on their website or company walls. Remind your service techs of the values regularly.
"We are focusing on running our business using our core values,” William Lutz, Owner of GEN3 Electric in Philadelphia, says. “I plan to relate core values to the business decisions I make and communicate them with my team. I have the core values posted everywhere. I have even posted them in ServiceTitan’s content portal.”
Here is an example of how he says the choice of using ServiceTitan supports GEN3’s Core Values:
“The use of technology is critical for GEN3 to continue to grow. ServiceTitan brings several different technologies together to help us grow by being more efficient.
“It is a joy to help customers, employees, and other business owners. ServiceTitan allows me to help each group. I personally enjoy helping others in the ServiceTitan community.
“The amount of information required to run a business today is challenging. ServiceTitan turns information into a business opportunity we use to attract talent and win customers.
“Being excellent every day is much easier because my team has the right tools. ServiceTitan gives everyone the information and enhances their ability to be excellent every day. The rest is just a choice.
6. Listen to your employees.
We love technology-based business tools; it’s what we do. But tech tools don’t replace the value of interpersonal communication.
“Keep a pulse on your business by keeping open communication with your entire team,” Mary Crawford, ST Specialist for Anthony Plumbing, Heating, Cooling & Electric in Kansas City, Mo., says. “If you want to make changes to a department, ask for feedback from the people who do the job on a daily basis.
“There is no such position as the low person on the totem pole. If the person has any contact with your customers, then that person is capable of raising your company to great heights or pulling it down into the depths.”
7. Create goals for your home service business.
Want to know how to manage a service business successfully? Plan, plan, and plan again. When it’s time to put the plan into action, ServiceTitan provides the tools necessary to succeed.
“Create a budget. Create a business plan,” Dawn Wasicek, Inside Sales for McCullough Heating & Air Conditioning in Austin, Texas, says. “Create an implementation plan to support your business plan.”
“Without a leadership team to execute and drive your people to exceed your goals, you miss out on the potential to maximize your growth,” Karen Hawkins, Project Manager and Logistics Specialist for American Mechanical in Virginia Beach, Va., says. “Every great business has an outstanding leader, and many employees would agree they leave their jobs because of poor management—not the workload in front of them. Being able to motivate your employees to reach their full potential can unlock some great business achievements. Your leadership team sets the standard for excellence, work ethic, and the culture that your business needs to thrive on.”
8. Prepare for the future of the home service business.
The industry changes every day, and companies that don’t adapt risk being left behind.
“Home service company owners should always be looking ahead to ensure their business is profitable and growing. In particular, they should be mindful of approaching market disruptors for the industry,” Amanda Woodward, Copy Team Leader for VitalStorm in Rockwall, Texas, says. “Topics to research include, but are not limited to, voice search, 5G network, Amazon Home Services and the Internet of Things (IoT).
“These digital changes impact the home service industry in a big way, but they don’t have to become disruptors in sales if company owners stay up to date on the latest news and best practices. For example, company owners can combat the potential disruptors of voice search by strengthening their top-of-mind awareness among their customer base through the use of social media marketing.”
ServiceTitan remains committed to helping home service professionals grow through our blog, webinars, podcasts, free business tools, and field management software. Trusted by more than 100,000 contractors, ServiceTitan’s customers report exponential revenue growth year after year.
ServiceTitan is a comprehensive software solution built specifically to help home service companies streamline their operations, boost revenue, and substantially elevate the trajectory of their business. Our comprehensive, cloud-based platform is used by thousands of electrical, HVAC, plumbing, garage door, and chimney sweep shops across the country—and has increased their revenue by an average of 25% in just their first year with us.Learn More