When you have an electrical contracting business, inefficiencies in the workplace do more than waste time—they waste money. When a business wastes money, operating expenses increase and profits decrease. To reduce small business expenses, you must take a hard, honest look at your operations to identify inefficient processes and implement corrective actions, such as the use of field service management software.
Determining How Much Inefficiencies Cost You
Name an inefficient action in your business and determine how often it happens. An inefficient action can be as simple as looking for a client’s contact information. Then calculate how much time each incident takes and the number of people it involves. If a worker is in the field, for example, and needs the address for the next job, the worker might look for the information for five minutes before calling the office. The phone call to the office, which now involves two employees, might take three minutes.
If the employee spends five minutes looking for contact information, and does this three times a day, this individual wastes 15 minutes per day, which comes out to 75 minutes per week—over one hour of wasted time. If the worker earns $18 per hour, the inefficiency costs $22.50 per week, or $1,170 per year.
When an inefficient action involves more than one person, determine the average salaries of the combined employees. In the example above, a three-minute phone call three times a day comes out to 45 minutes of time wasted per week. If the average wage of the two workers is $19 per hour per employee, this inefficiency costs $28.50 per week, or $1,482 per year.
In this example scenario, the inefficient actions cost a total of $51 per week, or $2,652 per year.
Tips to Reduce Small Business Expenses
Consider Negative Feedback
Customer reviews are a goldmine. While bad reviews may seem embarrassing or unfair, use them as an opportunity to grow and change. If a customer stated that your technicians showed up late to a job or a project was delayed, for example, learn why this happened to determine if you can give workers what they need to show up and finish on time. Solutions can include installing GPS systems in fleet vehicles and keeping on top of inventory items so workers have all the tools they need to complete a job.
Ask for Honesty
No business is perfect. During a staff meeting, ask workers to tell you about your business’ inefficiencies or shortcomings. Ask them what keeps them from doing a great job, and work on solutions together. A worker might state that he wastes time in the stock room looking for parts because the area doesn’t seem organized. The solution could be organizing the stock room, labeling bins, and using field management software that keeps track of inventory, its location (e.g., shelf 2, bin D), and the quantity.
Wrong addresses, wrong parts, forgetting to add items to invoices and other seemingly small incidents quickly add up to big, yet preventable losses. Identify areas where workers make the most mistakes, such as writing down addresses incorrectly, not filling out work orders properly, or forgetting to record the pin for the keypad on a door. Then implement measures that prevent these mistakes. Implementing field service management software will help prevent several costly mistakes by reducing the opportunities for human error.
Consider an Intern
If you need help in the office or an extra hand while on the field, consider using a college intern instead of a part-time or “temp” worker. Many times, college students need field experience for a class and will work free of charge or for a small fee. Advertise internship opportunities at nearby colleges and internship-specific websites.
Prevent Unnecessary Fees and Finance Charges
Many contractors spend hundreds of dollars on unnecessary expenses, such as credit card interest, annual credit card fees, late payment fees and credit card interest. Eliminate these expenses by using credit cards that do not charge fees, paying bills early or on time, and paying off a credit card’s balance every month instead of just the minimum amount due.
Creating, filling out, searching for, putting away, and sending documents takes a lot of time. Thanks to technological advancements, it’s easier than ever to use electronic documents to save, record, share and update information. A good field management software platform, especially one customized for electricians, allows you to use a computer, tablet or smartphone to perform many of the same tasks that you once did on paper.
As you make changes in your small business, tackle inefficient actions that have the greatest impacts first to get a jump-start on improving your operations. Keep in mind that overcoming inefficiencies is like acquiring a new habit—it requires using new processes repeatedly to avoid falling back into old routines.