As a business owner, you embarked on the entrepreneurial journey for two things: freedom and financial independence. Yet, despite growing your client base and expanding your team, it seems that your profit margin is not meeting your expectations.
The HVAC business industry is a high-cost sector, and if you’re not careful, your costs can quickly eat into your revenue. Luckily, there are several ways to reduce operating expenses and improve your profits.
First, you must understand your overhead and fixed/variable expenses. By calculating your estimated monthly bills, you can determine how much revenue your business should generate in order to break even and begin making a profit. Then, you can start identifying where you could cut unnecessary expenses and evaluate your pricing to increase profits.
When you’re a one-man HVAC business, it’s inevitable that you’ll hit a cap on how many service calls you can take on in a day. Bringing in more technicians will allow you to manage your workload more effectively and improve customer satisfaction, which leads to more referrals and repeat customers.
Another way to boost your profits is by raising your HVAC service prices. While this is a risky move that can lead to price-shopper customers, it’s important for increasing your profitability and building long-term sustainability. Finally, be sure to have the appropriate insurance coverages in place before you start hiring new staff members. Having the right commercial liability and workers’ compensation coverages will protect your business from potential risks.