How to Reduce Gas Pump Pain
Hvacr contractors, whose livelihood hinges on their ability to travel to and from jobsites, are certainly feeling gas pump pain. Like Profit-and-Loss sciatica, vehicle overhead shoots straight down to the bottom line.
Vehicle owners across the country are getting advice on how to conserve, carpool, clean the junk out of the trunk and backseat, keep up on vehicle maintenance, make sure tires are adequately filled, etc. Some of this may not seem to relate to contractors, but there are parallels that can help you, the hvacr contractor, keep your fuel costs in check.
DispatchingOf course you wouldn’t carpool your techs out to their customers. But you can cut down on techs making unnecessary trips.
Ruth King, of American Contractors Exchange, Norcross, GA, gives this advice:
- Always phone customers, commercial or residential, to make sure they will be there when your techs are.
- Zone your technicians’ regions to cluster them in a specific area while working within their range of competency. Specifically, don’t have them running from one end of town to the other.
Likewise, don’t have two techs working in the same neighborhood, even on emergency calls. “Every so often, Murphy’s gonna come and bite you on the butt,” said King of those types of calls, “but there’s no reason to have two techs in the same neighborhood.”
- Have techs start their day from home, rather than coming into the shop to get their calls. “Get the calls set up the night before,” advises King.
Scheduling and PlanningMapping out calls the night before and having techs start the day from home are just two of the things well-organized service contractors can do to streamline their operations.
At Environmental Mechani-cal, Kansas City, KS, service manager James Sharpton and service coordinator/dispatcher Kerry Ammon spend time analyzing the details that go into running service efficiently.
They agree that today’s wireless technology, such as two-way communication devices and cell phones, makes it virtually unnecessary for techs to stop at headquarters before they go to their first call. However, many contractors still have techs check in at the office first, says Sharpton. “Old habits die hard.”
Throughout the day, “As calls come in, I check for techs in that area” says Ammon. “For instance, if a tech is already working downtown and a call comes in for that area, I have him stay there.”
The company also has a position called “detail technician,” whose job it is to get all job materials lined up according to a material list that goes down to a nuts-and-bolts level of detail, and sent to the jobsite. This eliminates unnecessary trips made by parts runners and the resulting vehicle overhead expenses.
What to PackThe consumer media is advising motorists to clean out their vehicles to help improve mileage. Service techs, however, need to have enough parts and pieces with them so they don’t have to run back and forth to headquarters or the supply house.
Striking a balance between the two is essential to avoid wasting mileage and valuable technician time.
According to Sharpton, Environmental Mechanical has been able to get its truck inventory down to $900 worth of materials, not including refrigerant. “Our goal was to get it down to $1,000,” he says. “We managed to reach $900.”
He says that technicians didn’t out-and-out rebel, but some may have been uncomfortable at first. “Techs want 10 of everything with them; there’s a level of comfort there. They had to have everything, but we don’t need a rolling inventory.”
The contractor’s trucks are inventoried and restocked at the end of each week by a wholesaler that delivers materials to company headquarters.
King also notes that “Techs are pack rats. But don’t pick up two motors if you only need one.” Beyond that, just “Clean out your trucks,” she says.
Care and FeedingHow many times have you explained to customers that hvac maintenance is like car maintenance? Well, let’s turn the tables:
Service vehicle maintenance is like hvacr maintenance. If you don’t set a schedule and stick to it, you won’t get the efficiency (mileage) you expect, and you could well be heading for a breakdown.
Regular maintenance includes oil changes, oil and air filter changes, tire rotation, making sure tires are optimally inflated, and engine tune-ups. “A lot of contractors just pay lip service” to vehicle maintenance, says King. “Get it done.”
Environmental Mechanical, a commercial-industrial contractor, has fleet maintenance agreements with Jiffy Lube and Goodyear. “Every 3,000 to 5,000 miles, we set up an oil change” and other maintenance, explains Ammon. “The company sends a purchase order for the work being done.”
Sharpton adds that spreadsheets are maintained based on the gas cards techs use. “The guys log in miles on the odometer,” he says. This information, used to set up regular maintenance, also alerts Sharpton and Ammon when a vehicle is not getting the mileage it should, perhaps meriting additional service in the near future.
Because of the spreadsheets, Sharpton also found that many techs were filling their service trucks with premium, high-octane gas — hardly ideal for the short trips that typically make up a technician’s day.
Your PricesOne of the least pleasant aspects of the rising gas prices is the prospect many contractors now face: whether or not to raise prices, and if so, how much.
Since many economists are pointing to gas prices as a harbinger of increasing inflation, contractors may also want to consider whether or not to make a price increase permanent. If so, this could be the ideal time.
“Realize that at some point soon, you are going to raise your rates or decrease your profits,” writes King. “If you haven’t raised them it in a while, now is the time to do it,while it is hot.
“People…aren’t willing to put up with no air conditioning. So, this summer you’ll make a few more percent. It will decrease when you have to give raises to cover the increased fuel costs.”
If today’s gas prices truly are signaling rising inflation, then streamlining your processes and maximizing profits won’t just be good business; they will be necessary for survival.
Price Increases: What Contractors Are SayingMany hvacr contractors in areas affected by rising gas prices are scrutinizing their own prices. It’s likely that they will go up, at least temporarily.
At Environmental Mechanical, Kansas City, KS, options on the table include temporary, defined gas surcharges, or a possible flat rate for travel-intensive jobs.
Contractor-members of the Association of Service & Mechanical Contractors of Southeastern Michigan (ASAM), Royal Oak, MI, were polled anonymously on their fuel surcharge intentions (see Figures 1-3). Managing director Frank Versagi said that some contractors are saying that it will be figured into the labor charge, which could be a questionable practice.
“There’s a temptation, when gas prices come back down, to leave it in the labor rate,” he says. A better practice, he says, would be to identify it as a gas surcharge and remove it when gas prices come back down.
ASAM survey participants indicated that their surchages would range from $2 up to $20/call. One respondent said his company would charge and extra $5 for showing up, plus $2/hr. Versagi pointed out that these are union contractors.