As you scale, inefficiencies creep in and overhead piles up. Watch your operational KPIs, not just your top line.
@officialchadpetermanTranscript
Why do some companies grow, but in the end make less money? What do they say? Revenue for vanity, profit for sanity. What happens as a company grows is a lot of inefficiencies begin to develop. We stop paying attention to the blocking and tackling that got us to where we are, and we let that go by the wayside in search of these shiny objects and softwares and different stuff like that, and also our overhead begins to accumulate. Someone's got to manage all of these people out in the field. And so my advice, as you begin to grow in scale, is keep an eye on what your overhead number is, but more importantly, keep an eye on your operational KPIs. It makes no sense to grow revenue if your gross profit is going in the other direction.
Download Transcript
Related Videos
Here’s the fastest way to know if you’re making money or just staying busy: know your three numbers. 50% gross profit. 35% overhead. 15% profit. If you can’t say where you stand on each right now, that’s the first problem to fix.
If I could only track five numbers in my HVAC sales department, it would be: revenue per lead, close rate, average install revenue, discount rate, and revenue to budget. Most owners track none of them daily and then wonder why the month got away from them. Measure every day and the numbers stop surprising you.
If your tech left for $2 more an hour, money wasn't the problem. The problem is there was nothing else keeping them. Techs spend most days working on their own. If the money's right, it's the one-on-ones, the organizational support, the daily encouragement that keeps them here. A small raise can't outbid a place people actually want to work and feel supported.
This is where we build technicians from scratch. Zero experience walks in, and electricians, plumbers, and HVAC pros walk out. Everything in this lab is functional. They can tear it apart, we can plant faults, and they can fail safely here instead of in a customer’s home.