Are we in a recession? Is a recession on the horizon? Is inflation rising, the bubble bursting, the market crashing? As of February 2023, depending on the source you’re looking at on any given day, there’s no one solid answer to these questions. With so much uncertainty, it’s more important than ever to build a solid foundation and invest time, energy, and resources into tools that will help keep your head above water.
As a field service business owner, you’re likely planning for the worst case scenario. In lieu of preparing for doomsday, here are four steps you can take to mitigate your fears and keep your business on track to profitability.
Justify Costs & Validate Your Work
As we head into a recession, it’s typical to see a couple of trends emerge: 1. The demand for service decreases as customers put off non-essential repairs and upgrades. And 2. For those repairs that can’t be avoided, “trunk slammers” take your business because they’re offering a cheaper rate. (You get what you pay for, right?)
These trends put a ton of pressure on quality businesses to lower prices, which obviously eats into profits. When customers are reluctant to spend, having a database of truthful data and evidence, like service bulletins, will prepare you to continuously make justifiable sales. A best-in-class database will even highlight the essential fixes—things that the factory recommends. Having this tangible information will weed out unnecessary costs for your customers and put stock into recommendations at a fair price.
If you’re already anticipating lower margins, having a knowledge database with equipment information will give you a window into which systems and equipment are offering higher rebates. When a customer needs an essential fix, if you’re forthcoming about the “cheapest” option, and help your customers save money, you’ll gain long term clients. That rebate may offset the high cost of the installation, and give your customer the push they need to book the job. Showing value in the short-term yields long-term gains.
Stay Consistent in Capital Planning
“Consistent Capital Planning” … a phrase easier said than done. But, if you have automated tools that help you access key data points throughout the year, you can proactively prepare your business for what’s to come and stay steps ahead of the market.
Having a 360 view of your proprietary inventory, assets, and talent will give you the runway to make smart business decisions before it’s too late. Businesses have difficulty accessing financing during a recession, so trying to invest in new equipment or restock inventory in a crucial moment may be nearly impossible. Now is a good time to inventory your assets, whether that’s with a digital data capture system, or simply meeting with your suppliers and manufacturers to take stock.
Capturing critical business information in a centralized, easily-accessible location, will yield data points that you’ll reference consistently. To plan ahead, utilize the data and prioritize a few action items:
- Emphasize growth in areas that provide the best ROI.
- Look at your flexible overhead—like call centers, truck costs, etc. What can temporarily, or permanently be eliminated?
- Keep marketing, because your competitors are going to stop. Even if it doesn’t yield sales in the short term, that brand awareness will pay off once the economy ramps up.
Keep Your Technicians Happy
At any point in history, facing a recession is unfortunate. But, in the wake of the existing skilled trades gap and supply chain issues, this recession is exacerbating the hiring and staffing issues field service teams are already facing. At this point, hiring may not even be possible if you’re trying to cut expenses. Bottom line: right now, your techs have the upper hand. Should you bow to their every whim? Probably not. But, you do need to keep them happy, engaged, and growing as professionals.
Provide your techs with digital resources for training and gaining knowledge. Having access to a knowledge base of videos, photos, diagrams, and previous work detail is an easy, efficient way to create microlearning experiences on the job. Digital tools provide smart support in their moments of need—right in their pocket. However, you do need to be careful about overloading your techs with digital resources. Look at the technology your techs are using in the field today—are you expecting them to jump around from app to app? If your techs are using multiple apps in the field, look for opportunities to improve and consolidate your technology systems. Best-in-class field service technology offers sophisticated integrations that remove the need for multiple apps on a job.
If you need to go down to skeleton crew in the office, be mindful of overloading your techs with extra work, especially if it’s not in their job description. Keep your most valuable assets happy and focused on their jobs, and consolidate other office jobs with the aid of technology. Look at your flexible overhead—call centers, sales, quoting—these can all be flowing through a singular technology system that automates the work with the same steps every time.
If you’re in the construction space, the best way to keep your team happy is to keep them working. While the price of goods and services may go up during a recession, it’s likely that service and maintenance will still be a sustainable revenue stream; considering it’s cheaper and easier to maintain than it is to build from scratch. Investing in digital tools with extensive knowledge bases and automated workflows will open up opportunities to cross train on service and maintenance in real time, on the job.
Scale & Streamline
In a recession, details matter, and small money saving/revenue-generating opportunities add up quickly. Let’s walk through a few tangible tips you can use to scale and streamline your business:
- Focus on good clients, fire the bad ones. It may seem counterproductive to get rid of clients when you’re struggling to keep revenue, but in reality, you’re likely wasting time (and losing money) with “PITA” customers. Data-focused technology will help you benchmark your service and understand return on investment on each job.
- Take advantage of rebates! The Inflation Reduction Act offers tons of rebates for high-efficiency electric units, and contractors can push these sales as essential, money-saving opportunities. Lean on technology to help train technicians on how to install and repair these nuanced, more complex systems.
- Look for upsells. Finding upsells on the job is a great way to add extra thousands to your pockets each month. Encourage your techs to look for these opportunities, and provide them with technology that will help them communicate—showing customers the work needs to be done with video evidence, rather than trying to verbally convince.
- Eliminate & Automate. Take stock of your processes and consider the time-consuming manual tasks that happen every day. How much time are you wasting with excel spreadsheets, manual note taking, quickbooks, google searches, etc? While some of these manual data management tools are technically free, time=money.
- Reconsider your built-in expenses. Using technology to consistently collect all the job information you need the first time, and diagnose problems on the first try, will reduce those “standard” operational expenses like second truck rolls and callbacks.
It might sound cliché, but there are ways to turn a potentially negative situation into a positive for your field service business. The time is now to refocus. When you are solving foundational problems, you remain relevant during any type of crisis.
