Set yourself up for success by incorporating additional cleaning time into your flat rate pricing system
This year has been an incredibly challenging year for the health of both people and business alike. Some have lost friends or family to this pandemic and for that, we all share your losses. Fall flu season will soon be upon us and we need to be proactive now.
Let’s review some of the things that happened this year since January. The global pandemic was sweeping the world faster than anything we had ever seen before. Canadians and politicians were convinced this was a problem for the other side of the world and somehow, we were immune to such a thing.
By February, Canadians who had seen firsthand the impact of viral disease spreading were the first to take the situation seriously and were already stocking up on personal protective equipment (PPE).
In early March, COVID-19 was sweeping Canada along with almost every other country. March break was lockdown week; little did we know the seriousness of the situation.
Unsure what to do
For most of the world, there was not a “pandemic protocol” listed in employee handbooks (if you don’t have one, I suggest you get one). Canada, for the most part, was not prepared. Headlines read that there was a national crisis and Canadian retailers were out of toilet paper! Really?
This is lesson one for the fall.
Lesson two is “what do we need to do to be profitable, while continuing to provide our essential services under these new conditions.” We are still struggling with lesson three, which deals with inventory shortages.
Prepare now
Keep a constant three-month supply of the following:
- Single-use face masks, or seven days supply of washable cotton masks. Remember masks limit the number of germs passed on to others; failing to wear a mask tells people you don’t care about their safety. If buying “trendy logo masks” make sure they are moisture trapping, not moisture wicking material. If the material is stretchy, it is probably not safe.
- Nitrile gloves. These are meant for single use.
- Five-gallon plastic pail with snap lid. This is useful for containing contaminated masks, gloves, and repair parts.
- Hand sanitizer. Great for skin and tool cleaning but not meant to put on rubber gloves as a practice of re-sanitizing the gloves—usually ends up compromising the gloves.
- Disinfectant wipes. Sanitize everything! If you cannot find them, make them. Disinfectant cleaner and rags or baby wipes soaked in the cleaner can be an alternative.
- Disinfectant spray. A great way to sanitize your truck every night.
- Paper coveralls. Some great low-cost equipment is available on the market that are water resistant. Great for technicians who are doing maintenance and filter changes—a COVID-19 cesspool.
- Garbage bags. Do not leave the mechanical room carrying an old filter without bagging it first. As more people and places invest in HEPA filters and UV lights, you are going to expose yourself to a collection of components that will require change out and disposal.
- Face shields and eye protection. Eyes are on the top of the list of areas on the body that is easiest to contract the virus. Try avoiding wiping eyes with hands, gloved or not.
- Shoe savers. The best type to have is one with a rubber sole to avoid slips and falls.
And of course, wash your hands frequently and take your temperature daily.
Now that we have taken our temperature, washed our hands, cleaned our truck, and removed the days contaminated waste products, it’s time for break! I am kidding. Pandemic or not, we are in business to generate profits.
Profit isn’t a dirty word
Profit is what gives us the financial fuel to train our people better, provide more solutions, safer work environments, better tools, and safer vehicles, all contributing to a healthy company. Our goal is to deliver the best possible customer experience.
COVID-19 has led to the demise of some small businesses. Why? Well, some never understood profitability before the pandemic and changing times meant keeping up with the change in billable time. Lack of revenue added to rising costs of doing business, coupled with low charge out rates, created the perfect storm for these entrepreneurs.
Flat rates
Change out rates are important to a successful business. For those that follow my article trail, this is just a reminder. For those that don’t, this might be new.
The added burden of PPE and time to wash, sanitize between calls, and perform our tasks with the added protocol has increased our cost up to 20 to 25 per cent. Materials alone can add 15 per cent to our cost per hour, let alone the amount of extra time it requires to suit up, so to speak.
I am going to use layman’s terms here to keep it as simple as possible. Start out by calculating your cost per billable hour, this would include person costs, truck costs, insurance costs, PPE costs, etc. I suggest the new number is remarkably close to $100 (the old industry average was $85). Once we establish this number, we need to determine your efficiency rating (ER). To do this, we divide the number of hours we pay our technician by the number of in-home hours (i.e. eight hours of pay divided by five hours in the home equals 62.5 per cent ER. Industry average was 65 per cent prior to COVID-19).
If my cost per hour is $100 divided by my ER of 62.5 per cent, my real cost per billable hour is $160 per hour. This is why companies charging $140 per hour go out of business. Of course, the busier you are the faster you lose money. Do the math and stay profitable while staying healthy.
Final chapter
Lesson three is all about trial and error—inventory control. It is suggested that those that have inventory will sell, and those that don’t, won’t. It’s as simple as that. Manufacturers have struggled this summer season and rumour has it that it is not getting any better. As more and more people take cocooning seriously, the demand for home improvement products continue to increase locally, nationally, and internationally.
It is the ripple effect. The pandemic has led to government tariffs, lack of raw materials, months of lost products due to factory closings, and part plants shutting down. The demand far outweighs supply. If you are not convinced, go to your local dollar store or Canadian Tire, and see the empty shelves. Plan on storing up some inventory!
We have come through an era of just-in time inventory practices and if you continue to operate this way, you may become the next COVID-19 business fatality.
