Not gloating, but here's how you manage a service business

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Keep talking, I'm listening.
 
You don't need a deep pool of customers, you just need a bunch of loyal ones. So, last night I sent out my first call for service plans, woke up with $3700 in my account, 12 hrs. By midnight tonight we'll have enough money to cover all of our operating costs for April and May. The trick is to reach out to people on a Saturday (email is sitting there when they wake up) but still do it before the warm weather is completely here. Mind you, these people are very loyal. I have trained them to pre-pay and for doing so I give them a discount and by which I can guarantee income during the slowest months of the year. By the time we actually start going out to perform the services, other revenue streams start to come in too, so you are never really slow revenue-wise. In fact, April is pretty close to my October. Additionally, we get most of best custoemrs summer service done WAY ahead of everyone else.

Most of these folks I only see once a year, so it's not like I'm hitting them up for money at an inconvenient time, just doing it when it's MOST convenient for me. The last time I saw money from them was this time last year. The trick is...if you are going to only see money from folks once a year, it shouldn't matter to the customer when they part with it...they have to pay eventually. If folks feel uncomfortable paying ahead of time...fine, you can pay regular price and we'll come when it's convenient for you. No harm done.

We sold just over 500 contracts last year, $195 x 500 = $97,500.00 revenue in during the slowest time of the year. Assuming we only sold the minimum contract, we actually took in more like 142,000 with extended plans and parts. All we have to do is manage it and it's not that hard so long as you don't have a gambling habit or a sports car addiction:) . IF you play it right, you can parse it up into a short term secured investment and actually come out with more.

Is this getting through to you hearth shops? Think of the discount pricing you could get on venting early buys with this much revenue in after the slow Jan and Feb. Think about it. As always, advice is free.
 
Well, you must doing something right and you must have a good reputation if they feel confident / loyal enough to trust you with their money up front. However , it also tells me there is room for competition if they feel they have to pay up front to get on a service list..
With so many stove shops having already gone belly up I wouldn`t trust one around here with my money up front .
But, I do know from experience in the trades that it`s hard enough getting paid when the job is completed , so if you can get it up front I have to congratulate you.
 
I do the same thing, but our schedules are polar opposites.. Service is low hanging fruit & it's delicious
 
Well, you must doing something right and you must have a good reputation if they feel confident / loyal enough to trust you with their money up front. However , it also tells me there is room for competition if they feel they have to pay up front to get on a service list..
With so many stove shops having already gone belly up I wouldn`t trust one around here with my money up front .
But, I do know from experience in the trades that it`s hard enough getting paid when the job is completed , so if you can get it up front I have to congratulate you.
People pay for airline tickets months in advance before they fly and before they have the flight experience and they don't know the pilots or flight staff... It's about knowing when you need cash and building a system that allows you stay in business regardless of the cash flow cycles. Do you own the business or does it own you. Dealers falling pray to cyclical cash flow... No wonder they go out of business.
 
Well, you must doing something right and you must have a good reputation if they feel confident / loyal enough to trust you with their money up front. However , it also tells me there is room for competition if they feel they have to pay up front to get on a service list..
With so many stove shops having already gone belly up I wouldn`t trust one around here with my money up front .
But, I do know from experience in the trades that it`s hard enough getting paid when the job is completed , so if you can get it up front I have to congratulate you.
People pay for airline tickets months in advance before they fly and before they have the flight experience and they don't know the pilots or flight staff... It's about knowing when you need cash and building a system that allows you stay in business regardless of the cash flow cycles. Do you own the business or does it own you. Dealers falling pray to cyclical cash flow... No wonder they go out of business.
 
People pay for airline tickets months in advance before they fly and before they have the flight experience and they don't know the pilots or flight staff... It's about knowing when you need cash and building a system that allows you stay in business regardless of the cash flow cycles. Do you own the business or does it own you. Dealers falling pray to cyclical cash flow... No wonder they go out of business.


Did you read the E-Myth? Great book, here is the cliff note : just because you are the best wrench spinner in the world you won't be he best business owner.
 
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People pay for airline tickets months in advance before they fly and before they have the flight experience and they don't know the pilots or flight staff... It's about knowing when you need cash and building a system that allows you stay in business regardless of the cash flow cycles. Do you own the business or does it own you. Dealers falling pray to cyclical cash flow... No wonder they go out of business.

People don`t have a choice with buying airline tickets. Poorly managed businesses fail because of many other reasons too . Cash flow problems are common with many businesses not only seasonal ones but this problem is rarely considered and factored in from the beginning by most start ups. You came up with a way to offset the issue but it`s really nothiung new since the oil burner industry has been doing this for years along with others.

Many established businesses utilize a line of credit from the bank for short term cash flow issues. I know I did.

Businesses are more apt to fail for many other reasons , not soley for cash flow problems.

Regardless , your plan makes good sense for your situation and also for any pellet stove owner who doesn`t service his own stove .
I`m just overly cautious with stove shops around here cause none of them lasted more than a few years and to send them $150 or more in advance might be worse than going to the casino with it.
 
I am a customer and I am not offended. I was offended when my dealer came out 2 different times to clean my stove, and when he left, I noticed he hadn't touched either the combustion or distribution fan. As a customer, I shouldn't have to be looking over his shoulder making sure he is doing his job. I'll just get someone else. Yes, there is a trust issue. I trust that Scott will in fact come out and clean my stove, as he has done in the past, and he will do it right. When he comes, it will already be paid for.
 
I am a customer and I am not offended. I was offended when my dealer came out 2 different times to clean my stove, and when he left, I noticed he hadn't touched either the combustion or distribution fan. As a customer, I shouldn't have to be looking over his shoulder making sure he is doing his job. I'll just get someone else. Yes, there is a trust issue. I trust that Scott will in fact come out and clean my stove, as he has done in the past, and he will do it right. When he comes, it will already be paid for.
Thanks newfie
 
Of and FYI, since prepaid visits are handled via credit cards. There is always insurance for the card holder via chargebacks and dispute resolution should the service not be deljvered as promised. So in many ways this way of paying actually is best for the consumer, perhaps there is a better word to use than train... But why am I arrogant by communicating freely. People think because I charge people that somehow I'm the bad guy?
 
Obviously having trust in your dealer makes a world of difference. Trust is earned and it takes time for word to get aound and establish yourself as a trustworthy business. It seems Scott has accomplished this even though he may come across to some as being somewhat arrogant or bragadocious. It sounds more to me like self confidence and there`s nothing wong with that. .
The stove business itself could definitely use more trusting individuals with good reputations like him.
 
Service is a product buy it early or back of the line. The line usually starts when it's 10 degrees.
 
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I tried to be your customer.... you never replied to my e-request. :shrug:
 
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Much of the same advice always applied to the chimney sweep biz, and some big companies like Copperfield did a LOT of training in order to show their customers (the sweeps) how to step up in the arena of professionalism.

Even the sweeps who did not buy from them or like them probably followed their advice.

The best sweeps I know hardly ever looked for work. In fact, it was often the other way around...they had a hard time getting to all the jobs requested of them. Of course, this is after laying a foundation for many years...

I like the ideas of making things easy with credit cards, etc. - it can really hurt a small biz just in the processing of invoices and collections. That is, sometimes a call is very small (say, just a quick visit and look), which may be less than $100. Billing, collecting, depositing and tracking the money can take a nice chunk of time.

Even with this business (hearth.com sponsors and advertisers), those efforts take more time than I would like.

Consider the Apple and Android stores and all the similar stuff. If it wasn't for automatic cc's on file, much of the modern world could hardly exist!
 
New Customer Service Ticket [pss #1-3692]
 
If I am a customer and I read your post I would no longer be a customer,the part where you say you have trained your customers is just plain arrogant and secondly I would never brag about getting a customers money or how easy it was to get it.

Absolutely agree............
 
And if you don't create a system to get customers to be early with their cleaning (I.e. train them) and they all wait until Labor Day then you cannot get to everyone. Perhaps I come off Cocky... sorry fer that. I'm sharing this to inspire other small service people to take control of their business and remain in business, after all they have a responsibility to all of their customers to be there for them. 3 months of waiting for people to call or wondering where the next check come from makes people do desperate things.
 
Our pellet stove shop did something similar for summer cleanings. They did it snail mail though maybe they did email as well not sure.
 
And if you don't create a system to get customers to be early with their cleaning (I.e. train them) and they all wait until Labor Day to call you cannot get to everyone. Perhaps I come off too confident... But I'm sharing this to inspire other small service people to take control of their business and remain in business, after all they have a responsibility to all of their customers to be there for them.

"Train your customers" can be offending. Offering an incentive program for yearly servicing (the discount ;) ) would be a better way to phrase it. It also helps with scheduling your time for those cleanings when you have an idea of how many and can start right after the burning season is done. As others have said, this type of service incentive would only be effective after some time in the business were you have proven yourself to be reliable. Glad it works for you...
 
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