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Business Profitability Is Questionable

May 25, 2012
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Is your business profitable? It’s a simple question, but for many HVAC contractors their answer is often unsure.

They have the technical side of the business covered. Installing and servicing equipment isn’t a problem; the staff is paid; the bills are paid and everything seems to be running great. The keyword here is running. Not all are cut out for it, but most that decide to; are able to run a business. The trick is in running a profitable business.

How do you run a profitable business? There are dozens of methods and strategies, but one common theme is measurement. As a business owner, measurement or the lack thereof can make or break an HVAC business. Most businesses will survive for some time without it, but those businesses that aren’t measuring what comes in and what goes out in money, time, and resources, may not make it as long as those who are measuring the entire business and strategizing how to improve.

Profitability seems like a no brainer, but wanting to be profitable and making measurable strides toward that goal are two different things. Which brings me back to my question; is your business profitable?

Take a second and answer that question below. Don’t forget to include why it is profitable and what you are doing to continue to improve your bottom line. If you aren’t sure, or your business isn’t as profitable as you had hoped, get in the discussion and tell us your side of the story.

I am willing to bet that no matter your current business situation, you aren’t the only one in that position. So don’t be shy and get in the discussion.
 

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General Manager

Mark Carver
May 28, 2012
I think many struggle with what to measure as well. I like to nail down the procedures first for consistency then work on my tracking/measuring methods. A good starting point for an air conditioning contractor would be to carry separate profit and loss statements per department and allocate percentages of overhead accordingly. A clear snapshot of what departments are profitable should become clear quickly. Mark Carver http://www.energyloadcalc.com

Owner

Jim Hughes
July 30, 2012
Mark I completely agree that your P & L needs to be separated by department. What I find, however, is that many companies really don't know what a healthy profit is. A lot of companies are satisfied just to have a positive number at the bottom of the page. Unfortunately a low profit can be wiped out by one unexpected expense. If companies are not operating at a 15-20% net profit, they have work to do.

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