Easy Ways to Boost Your Bottom Line Without Working More
6 MIN. READ
Many HVAC contractors are feeling the COVID pinch of higher supplies costs and lower total revenue. This often hurts your company's bottom line. You could work more hours to earn more, or you could look for other ways to improve your total profits without working yourself to death. Discover some simple solutions like strategic sourcing that can help you increase profit in your HVAC contractor business.
Reduce your cost for supplies
Besides labor, the cost of equipment and parts for any HVAC contractor is one of your largest total expenses for the business. That includes all your costs, from the smallest screws to the biggest equipment. Strategic sourcing and other cost reduction tools can help you lower your total expenses:
Negotiate better rates with your suppliers.
Increase your buying power.
Carefully plan each project to limit total waste.
Negotiate better rates
To negotiate better pricing with your suppliers, you must compare prices to see what a "competitive" rate is. Software tools like Raiven Marketplace (formerly Qmerit) can help you by looking at pricing from multiple suppliers both regionally and nationwide.
You can also request discounts from suppliers if you pay in cash or buy in bulk. Be careful of bulk buying though - having too much inventory can be a drag on profits too.
Increase your buying power
Suppliers know you are a small business and thus not as likely to buy as much as a larger contractor. So, they might not offer you the same discounts they would to someone with more purchasing power. For an independent contractor, that can seem like an insurmountable problem.
Usually, the lowest prices are reserved for companies that make huge bulk purchases. Raiven Marketplace allows you to instantly see the best available prices and buy from trusted suppliers all over the U.S. This strategic sourcing can save you anywhere from 7-25% on materials, combining purchases from hundreds of independent contractors like you to match the buying power of larger enterprises.
Carefully plan projects to minimize waste
Every extra screw or piece of ductwork that you throw away is money down the drain. It also adds to already overcrowded landfills.
Before you buy supplies for any given project, carefully consider what you need so you do not buy too much. If you are thinking about buying in bulk to save costs, make sure you properly store the materials to reduce the chance of damage or theft.
Improve your ability to check subcontractors
Working with subcontractors takes time. You have to:
Track down licenses.
Verify certificates of insurance as well as other credentials.
The more time you spend on these tasks, the less time you have for your clients. For many HVAC contractors, these administrative items add a significant amount of time to the total workweek. Unfortunately, all that time spent chasing down paperwork does not add to your bottom line.
Fortunately, technology can help you streamline these processes. As a bonus, it does not involve 300 different spreadsheets or 20 different computer programs you have to remember logins for.
The Raiven contractor management platform gives you all the tools you need to manage subcontractors. With a centralized system, it is simple from start to finish. You can solicit bids, review subcontractor performance and manage all their documentation in one place, helping you find the highest quality contractors at the best prices.
Working with quality subcontractors can help you achieve higher customer satisfaction. This helps with repeat business, online reviews and customer referrals, which are all key to building your business. You also want to hire subcontractors that will finish on time and on budget.
If you are having trouble objectively measuring subcontractors, the Raiven Quality Contribution Index™ (QCI) can help. This real-time performance score uses key metrics to identify the best subcontractors. There is also a tool to see total bid costs, which helps you save even more.
Selecting a contractor based solely on price is not always cost-effective and can lead to errors that cost more later. These tools help you find the highest quality subcontractors who also have the most competitive bids.
Cut out unnecessary administrative costs
Contractors have a lot of administrative tasks to complete, including:
Supply cost comparisons.
You could automate many of these tasks with strategic sourcing tools from Raiven. Every minute you spend on paperwork is time you do not spend on a job.
The more you can automate the office work, the more time you can dedicate to improving your business. That includes finding new bidding opportunities and completing jobs to your clients’ satisfaction. The right software makes a big difference in maximizing time for the work that gets you paid.
Raiven's solutions can also cut costs by limiting how many additional employees you need in your HVAC business. This allows you to hire for only the work that requires qualified employees.
Learn more about Raiven today
You can earn more profits in your HVAC contractor business by reducing supply costs, increasing your buying power and making your employees more efficient. You can also increase profits by streamlining your subcontractor hiring and evaluation processes. Find out more about how Raiven can help you accomplish all of these strategic sourcing goals and earn more without ever working extra hours.