Is it just us, or does everything cost more? We’re all familiar with the cost of living crisis, of course, and we’re working harder than ever to pay for rent, energy, fuel and food. But what about the cost of doing business?
Raw materials, energy and overheads are all increasing in line with inflation, making it harder to pay our staff – let alone make a profit. Economic forecasters predict that this rise in inflation will continue into 2023 and beyond, meaning we’re in it for the long haul.
Not all field service businesses have the surplus income to cover these sudden and dramatic increases, putting them in the uncomfortable position of having to increase prices at a time when customers are struggling to afford their services anyway.
Fortunately, there is another way: trade service businesses can get smart about their spending, cutting costs across the board and coming out on top. Read on for our tips on impactful action your business can take to ride out this economic storm.
Why are trade business costs rising?
In short, we’re seeing business costs go up due to soaring inflation. This increase is a long-anticipated knock-on effect of the pandemic, which caused significant interruption to supply chains, as well as backing up manufacturing schedules and creating global delays.
As if that wasn’t enough, the ongoing conflict in Ukraine is impacting key industrial supply chains, with assets such as fuel and steel from Eastern Europe becoming less available. Furthermore, continued Covid lockdowns in China means that the world’s manufacturing powerhouse has been put on severely reduced hours.
Put these unprecedented events all together, and you’ve got the perfect storm.
What can be done to combat rising costs?
Trade and service business owners are now faced with a choice: whether to pass these price increases on to customers, and risk losing them to lower-priced competitors, or absorb new expenses internally to keep competitive pricing.
Before making this rather stark choice, it’s important to fully understand your business’s finances and expenditure. Start by running an audit of your last year’s business expenses, flagging up any unexpected or significant costs.
Your audit will help you draw up a budget for your next business year, including recurring costs such as energy, office rent, staff wages and asset maintenance. This will cut down the chance of unexpected bills later down the line.
Once you have your budget in hand, run through it with a fine-toothed comb and make note of areas where costs can be cut. You may find that the outlook isn’t as bad as it seems!
Here are a few of our top tips for cutting down costs and keeping afloat.
If you haven’t already digitised your business, this is the time to do so! A startling 52% of trade companies still use manual methods such as paper forms and individual text messages for field service delivery.
This dramatically decreases your field workers’ productivity, wasting time and money, as well as misusing technicians’ skills. Crucially it also allows for small errors to be made unnoticed, which can add up to significant miscalculations later down the line.
Cut out the paperwork and invest in a comprehensive field service management software like Workever. This all-in-one tool can accurately track essential data points, and efficiently perform analyses on your finances.
Integrating your company with smart technology reduces complex paperwork and manual tasks to the touch of a button, freeing up time for your fieldworkers to focus on tasks that produce revenue.
You may think that taking on as many small jobs as you can is key in these uncertain times. In fact, the opposite is true. You want your fieldworkers and assets available for big, high-paying jobs rather than a string of small callouts that end up costing as much in fuel and time as they put back into your business.
You need to get smart about taking on cost-effective work, while empowering your customers to handle smaller issues that don’t require a technician. Your customer portal can really come into its own here, allowing you to create a library of resources such as troubleshooting guides and how-to videos for customers to access.
Another option is to run video call diagnoses before scheduling an appointment, allowing technicians to remotely talk customers through initial checks, and make an informed decision about whether they need to attend the issue in person.
This way you can avoid sending technicians out to deal with simple issues that customers could solve for themselves, freeing them up to take on bigger projects that generate higher profits.
One area that’s been hit especially hard by rising inflation is equipment procurement, with costs up by 18% annually. You may be used to asking your technicians to source parts and materials for themselves on the go. However, this kind of impromptu purchasing can lead to significant variance in the costs of particular parts, increasing material costs and making it difficult to budget accurately.
Instead, tap into a planned procurement process by getting in touch with a local distributor. These resources allow you take advantage of distributors’ economies of scale, getting the equipment and parts you need at lower prices.
Planned procurement can also cut down on storage costs, as distributors can ship parts directly to work sites. That means you can stop paying fees for warehousing and simply get the parts you need, where and when you need them.
With equipment and material costs on the rise, you may be tempted to stock less in your inventory. However, running out of an item can be disastrous for your bottom line, with projects grinding to a halt until the appropriate asset or part can be found.
On the other hand, stocking too many of the wrong parts can be equally problematic, as it means you’ve wasted money on unused stock. Add to this the issues that can arise when an asset needs unexpected maintenance and you’ve got a recipe for disaster.
There is a middle ground, however. Field service management software like Workever helps you get smart about your inventory, reducing costs by helping you keep a closer eye of what’s in stock and what’s running low.
Our all-in-one software can automatically reorder stock at a pre-defined point, ensuring you never run out of critical tools and materials while stopping you from over-ordering and wasting funds. It can also automatically schedule asset maintenance, helping you plan around any associated downtime and ensuring maximum efficiency at minimum cost.
Invest in your fieldworkers
No matter how tight your belt gets, investing in the skills and abilities of your workforce remains an important way to stay ahead of competition. Finding cost-effective ways to continuously train your workforce not only allows you to charge more for your services – it also increases the chance of first-time fixes and keeps your staff invested in their work.
One way to promote professional development is by ensuring that your fieldworkers have access to all the resources they need, wherever they are. Invest in a mobile fieldworker app like Workever’s, which lets you upload key resources such as manuals, troubleshooting guides and how-to videos to a central cloud-based platform, so your team can access key information on the go.
This simple addition to your toolbelt can help your staff become more confident and competent, increasing customer satisfaction and reducing the chance of costly follow-up calls.
Cut Travel Costs
Complaining about fuel prices has become a national pastime over the last few years – especially for fieldworkers. As field work requires travel by its very nature, rising fuel costs can dramatically affect your business’s overall cost structure.
It’s time to take things into your own hands with on-the-go route optimisation, which can help reduce travel time and fuel costs, ensuring that workers are taking the most direct and fuel-efficient routes to sites.
Efficient scheduling can also make a big difference to your bottom line. By smartly scheduling workers to take on multiple jobs in the same area, you can dramatically cut down time spent on the road and maximise the productivity of your field workers.
Workever uses a GPS tracking system and comprehensive scheduling to help you get the right workers to the right place as fast as possible, reducing fuel costs and increasing productivity.
There’s no point in sugar coating it – doing business is only going to get more expensive. But with careful planning and the right software tools, your business can not only survive but thrive.
Choosing a reliable and comprehensive field service management software is the first step toward cutting costs and increasing revenue in the face of inflation. There’s never been a better time to give Workever a go, with its all-in-one field service management platform.
Workever gives you a complete view of your finances and tools to help you improve them, empowering you to reduce expenditure and make cost-effective decisions. If you’re ready to get your ducks in a row, start your free trial today…