How to stay steps ahead of the market.
A perfect storm is about to roll into the field trades industry. With pressure building from the labor shortage on one side and supply chain issues on the other, when those two problems hit, it’s going to cause major damage to a lot of businesses in the trades.
Alongside these disruptions, there are big changes coming to the field trades industry like new efficiency standards, and the phaseout of HFC refrigerants. Once those changes come into effect, there will be entirely new requirements for basic parts and maintenance.
Between shortages, missing inventory, and new standards, if you’re not prepared for what’s to come, you may find that it’s difficult to stay afloat in an ever-changing market. It’s more important than ever to figure out a way to get ahead of the market—and your competitors.
So, how can you prepare your business for what’s coming? Capital Planning: the process of budgeting your expenses, inventory, staffing, equipment and income for your field service business.
The standard for Capital Planning involves a long-term allocation of funds. For example, at the end of the year, a regional facility manager will assess where their business currently stands, and put together a high level plan for jobs to be done in the upcoming year, some needed, some extra. This plan projects all estimated expenses, incurred fees, equipment, staff, sales and ROI. The plan is disseminated to contractors to discuss with their customers and plan out their year, leveraging the contractor’s expertise.
But in this evolving landscape, doing things the standard way may not cut it. Data-backed, tech-focused technology is the solution to the modern approach to capital planning, where you can be consistent and proactive based on real time data you’ve collected. Your planning can, and should, be driven by your own historical data and projected trends from across the country. Relying on standardized data from an OEM or major manufacturer is not only untimely, it may be subjective and unreliable. Companies who rely on antiquated capital planning techniques may not survive in today’s market. You need frequent access to predictive analytics, so you can shift capital investments fast.
Let’s discuss this modern approach to capital planning with a real-life example:
A company utilizing technician-focused technology gathers essential data about the lifecycle of their equipment. They’ve done the work to encourage their technicians to capture data from assets in the field, and all of that information is routing back to their software. Having that data, the field manager gets a report on a crucial piece of information about a customer—come November 2022, seven pieces of this customer’s equipment are set to reach end of life status. Now, the team can work to be proactive. The sales manager reaches out to the customer and lets them know that in November they have equipment that will be due for a fix or replacement, encouraging them to get that work done now, because once November comes around, it’s likely that equipment will be held up in the supply chain. On top of that, due to the trades gap, they may not have the staff available to fix seven units at once. If the customer waits until November, a straightforward fix could turn into an emergency situation.
Because they can actionize the data they’ve collected, the company is able to plan in real-time. Fixing seven units at once means they’ll need to project expenses for the labor, equipment (not just the units—will the technicians need to access the roof? Do they need a crane, a helicopter?), delivery, and any additional expenses related to the job.
Essentially, having crucial data on your equipment means the fix is identified, budgeted for, and taken care of before it becomes an emergency situation. This proactive approach will undoubtedly save your customers time and money—no rush shipping, no waiting around, no unidentified expenses.
Data should drive how your business is looking at renewal contracts and preventative maintenance opportunities. If your sales team is pushing all-inclusive contracts, knowing the age and condition of the equipment that needs to be serviced is crucial. Without data, there’s no way of knowing how much work it will take to get that equipment running. If the equipment is nearing end-of-life, your technicians may end up working much harder than the value of the contract. With the help of digital tools, every project is tracked by ROI and the budgeting decisions are made dynamically based on those metrics.
Are You Ready to Grow?
The good news—if you’re prepared with digital tools backed by customized data, consistent capital planning can put your company way ahead of the curve. Supply chain and labor shortage issues are daunting, but proactivity in planning for maintenance, fixes, and contracts can subvert the “scary” and bring in significant, continuous revenue.