"Which jobs are our most profitable?"
That’s the question operations manager Rick Jones and the team at Malady Electrical wanted to answer six months ago.
They’d been busy, tackling everything from residential call-outs to million-dollar electrical projects in and around Warragul, Victoria, and now it was time to get smart.
Time to figure out if it was the big or small jobs, or something in between, where they were nailing their profit margin.
To get some answers, Rick turned to Fergus's smart job management software. The business had already been using Fergus for two years to quote, schedule and invoice all their jobs, but this was the first time they’d dived into the financial reporting.
Straight away, Rick could see the total profit made on each and every job. He could also track which costs, like labour hours and materials, were billed straight to the customer.
We could immediately identify areas where our margins were great and not so great. We could tell that at a glance in Fergus.
Rick says it’s that insight that’s given his team a better idea of the jobs to chase and the jobs to turn down.
Find out how Fergus has also helped Malady Electrical manage their jobs easier and smarter here.
Like many other trades businesses in Australia, demand for electrical services is expected to grow another 2% next year, according to figures by research firm IBISWorld.
To get prepared for another bumper year, Rick has some top tips to help you figure out how to pick and choose the best jobs for your business.
First up, take some time to learn how to read and understand your financial summary report. Some job management software systems like Fergus will automatically compile these reports for you.
Once a month, or at the end of your invoicing cycle, use the report to take stock of a few completed jobs.
Make a list of the high and low-margin jobs. Make a note of who in your team quoted the job, who got the job done on-site, and the customer. It’s also a good idea to make a note of whether or not it was a charge-up and the category the job falls under (for example, maintenance, domestic or commercial).
You should start to get an idea of which jobs your business is best at. Profit margin is the big one, but it’s also important to see which staff are most efficient and where you could adjust your quoting methods.
To get a hand figuring out the profit sweet spot in your business, sign up now for a free trial of Fergus smart trade business software.