Much like that football coach, those of us in the HVAC business need to review the details of the previous months and year in order to make plans for the upcoming seasons. While we don’t have game videos to study, we should have a great deal of statistical data available to us, which will provide us with the information we need. You should have departmentalized financial statements, which will tell you which areas of your company are operating the most successfully. Going even deeper, you should have job costing information, which will tell you which jobs or types of jobs in each department are the most profitable for you.

With this information, begin compiling a list of those areas which need improvement and need your attention. Here is something important to remember: Don’t try to change everything at one time. Choose the three or four areas which, if improved, will result in the most benefit to the company.

This would be a good time to review your overhead costs in each of your departments and confirm that your pricing structures are adequate to cover the overhead and provide you with a profit. It is very easy to assume that your overhead is going to be the same from one year to the next. In reality, you know that there will likely be some wage/salary increases along with insurance and other like costs. Failing to plan for these probable increases will show up in a reduced bottom line at the end of the year.

If you plan to grow your business in the coming year, this will probably require some additional advertising and/or marketing funds. While hopefully these will be covered by increased sales, these additional costs still must be budgeted into overhead.

As you plan for increased business in the coming year, I will re-emphasize the importance of adding a maintenance agreement program — or, if you have one in place, setting aggressive goals to increase the program. If in your review of your monthly sales numbers you see significant differences in monthly service sales, then it is likely that you are not operating a successful maintenance agreement program. One of the major benefits of a maintenance agreement program is to even out your sales curves. This helps bring in revenue in the traditionally slower times. If you would like some of the forms and promotional items we use for our maintenance agreement sales, just email me at the address shown and we will be happy to forward the info to you at no charge.

Just like a football coach has to review previous errors and plan corrections between games, you as an HVAC contractor should use your time between busy seasons to examine which of your areas need improvement and make plans for how to step up your performance.

See more articles from this issue here!