6 Key Metrics for Growth – and How Contractors Can Track Them
Oct. 6, 2021
What’s the best way to measure success? For many people, there’s only one answer: Money.
But financial success in the commercial HVAC, mechanical, electrical and plumbing industries is the end result of a process. If your process is well designed and implemented, profits will come.
The opposite is also true. When contractors focus on short-term financial goals, they often make decisions that put their company’s long-term success at risk. Driving your team to simply maximize immediate revenue or profit at the expense of sustainable, proven business practices isn’t good leadership, and the positive results don’t last long.
Financials can also be misleading for companies that are new, in transition or invested in growth. When you’re hiring or expanding your service and see competitors who are content to coast enjoying higher profit rates, it can feel like your process is taking you in the wrong direction.
That’s why financials are just one of many standards for success. So how can businesses confirm that their process is working without simply checking their bank balance? By measuring the success of their process.
Here are six key performance indicators (KPIs) that help keep contracting businesses on track and moving toward their goals.
- Performance: How well your employees do their work is a critical factor for contractors. Don’t rely on instinct to determine who’s getting the job done and who’s weighing down the rest of the team. Today’s advanced software platforms provide essential feedback from the field on everything from response time to callbacks and more, and techs have access to customer information and remote support that enhances the quality of service they provide. With the skilled labor shortage, these performance metrics are critical in identifying development opportunities for your star players and underperformers alike. Don’t underestimate employee performance as a KPI; it can quickly turn into a profit maker or profit breaker in addition to impacting company culture (read on for more details on culture as a KPI).
- Customer satisfaction: A satisfied customer comes back with repeat business and if you’re doing it right, a satisfied customer comes back with referrals to new business. BuildOps’ sophisticated Customer Management function provides a complete, centralized and easy-to-navigate record of crucial data across locations and jobs so that nothing falls through the cracks. Our solution empowers you to deliver a world-class experience that inspires confidence and ensures continuing revenue. When you combine the ability to see your customer’s complete job histories with transparent metrics on employee performance you’ve got quality control locked and loaded for happy repeat customers that will gladly drop your name as a referral.
- Productivity: There are multiple ways to effectively measure how much revenue-producing work your team gets done in a day or week: the amount of time spent on each job, travel times, billable hours, sales of added services or maintenance agreements. This information is valuable for resource planning as you schedule and dispatch your well-trained technicians and can have a significant impact on determining your service area, rates and which services you offer.
- Inventory and equipment: The last 18 months have demonstrated that changes in materials costs, demand, and product availability can have a dramatic economic impact. You can’t control most of that. But with BuildOps’ mobile technician app and quoting and project management features, you can monitor and manage jobs in real time so you and your customers get the best of all available options.
- Culture: A talented, engaged team is one of the building blocks of a successful contracting business. The secret is to take care of the people who take care of you and your company. Yes, competitive wages, job security, opportunities for advancement and other benefits (PTO, flexible schedules) help you attract and keep the skilled workers you need and reduce turnover. But also consider the damage done when you allow one or more underperformers to stay on the team. Star players have no patience for a mediocre team even in the worst job markets. With the economy rebounding your A+ contributors have options for other employers. Don’t lose your best employees because you don’t have the data to separate the wheat from the chaff. BuildOps’ crystal-clear tracking and reporting make it easy to see who is performing and who may need help.
- Financials: While it’s easy to place too much weight on financials as a measure of success, a company’s financial performance is an important indicator of its overall status. Let the bottom line take care of itself and focus on the details: revenue and profit per employee, revenue and profit per department, average revenue and profit per ticket, operating costs, inventory, cash flow and dozens of other figures that tell the real story of your financial health.
Service management software like BuildOps’ invoicing and quoting features and our deep accounting integrations help you and your team maintain an accurate, real-time picture of your company’s financial situation. You can analyze the data in easy-to-customize reports and compare it point by point with your company’s goals, allowing you to move ahead with confidence or make adjustments when necessary. This allows you to respond quickly, maximizing your margins and giving your business the edge against the competition.
If you’re ready to see how our advanced cloud-based platform for commercial contractors can help you keep your business on track, contact us to schedule a demo.