Four HVAC business tips to help you make money faster
There’s a lot to take into account when running an HVAC business. It’s not just about your HVAC chops. Organizing your schedule, customer service, managing employees, and managing cash flow comes into play too.
Since HVAC businesses are complicated and expensive to run, making money faster and more efficiently can seem like a daunting and next to impossible task––but it doesn’t have to be.
If you’re going to be profitable, then you need to prioritize some HVAC business tips that will help you collect payments faster. Why? Because the last thing you want to be doing is chasing down payments from successfully completed jobs.
What can you do to collect payments faster and more efficiently to avoid that problem? That’s what we’re going to cover below.
How to run a profitable HVAC business
Every homeowner and building owner needs heating and cooling solutions. When someone’s heating or cooling system is on the fritz, you’re the first person they call. With so many business opportunities, you might think you’re set!
That’s only partly true. Even the most in-demand businesses won’t turn a profit it if they don’t have organized, efficient processes. Here are four ways to set up the right processes to be profitable (quickly).
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1. Improve your scheduling efficiency
Scheduling inefficiencies are a massive time, resource, and money sink.
The last thing you want to do is send out multiple crews to the same street or neighbourhood at the same time, or on the same day. That’s a lot of left turns and wasted gas––especially if you don’t charge your clients for transportation time.
The time and gas that you can save from creating an efficient schedule and properly optimized route will directly affect your bottom line.
If you save 30 extra minutes commuting from site to site a day, then you could effectively squeeze in an extra service call each day. That translates to five more service calls a week, which is a lot of cash opportunities you’re leaving on the table.
Here’s how to improve HVAC scheduling and dispatching:
Create a list of your service calls for the day and pin them on a map. This will help you visualize the appointments for the day and discover distances and congestion between waypoints.
Break up the pinned locations on the map into territories that you can cover. If you have multiple crews, then assign each crew to a separate territory. This will help in case you get emergency service calls throughout the day. You’ll be able to quickly dispatch a crew to the location based on their proximity.
Next, you can either do some macgyvering to plan an efficient route based on distance, use a routing app, or use HVAC route optimization software that takes your daily schedule and produces the most optimized daily route plan for you and your team.
The goal here is to be able to assign tasks to nearby team members to cut down on transit time, reassign last-minute jobs to nearby team members, and reorder jobs to follow a more efficient route.
2. Collect deposits
Collecting deposits is one way to help you improve cash flow speed. Deposits are especially helpful for HVAC professionals who need supplies and equipment, or who complete big projects, like furnace installs, regularly.
Most HVAC professionals miss opportunities to ask for deposits because it’s awkward or complicated…but there are processes that can make it easier.
Here’s how to collect HVAC service deposits:
Before you start charging your clients deposits left, right, and centre, decide on which projects you truly should request a deposit for. For example, a furnace replacement will probably require a deposit, but a 30 minute system check probably won’t.
Next, decide on the deposit amount you need to charge your clients. This depends on your business needs as well as your state laws. Some states only allow contractors to charge their clients 10% or $1,000.00, whichever is lesser value. Check with your local business bureau.
When you go in for an on-site assessment and quote your client and communicate that you require a deposit for the project. You could also offer a 5% discount if the client pays in-full up front to really boost your cash flow.
Finally, offer your clients an efficient way to pay their deposit as quickly as possible. Cheque, cash, and e-transfers work. But, the fastest way to get paid is through ePayments.
EPayments allow you to vault you client’s credit card and easily charge them again down the line with their approval.
If you’re having trouble collecting a deposit then you can send your client a reminder, and keep a personal collections reminder in your calendar. Alternatively, you can find an HVAC quote, invoice, and payment software that vaults your client’s card, and automates follow-up communication and reminders for you.
3. Improve your invoicing strategy
One of the best ways to make more money faster is to create a solid HVAC invoice strategy.
Think about it: if your invoicing strategy is disorganized, then invoices can easily slip through the cracks. That’s a lost opportunity for getting paid!
A tight invoicing strategy is crucial for helping you make money faster, too. If you don’t follow-up with clients after sending out an invoice, then you might get payments much later than you would like (and need) to run a successful HVAC business.
Field service companies typically wait 25 days to get paid. According to Fundbox, most small businesses only have 27 days worth of a cash reserve, so that wait period isn’t ideal.
Getting clients to pay you on time isn’t always in your control. However, you can encourage them to pay faster by being organized, sending invoices on-site, and following-up with timely reminders.
Here’s how to improve your HVAC invoicing strategy:
Clients are typically on-site while you are completing work. Use that to your advantage by creating and sending invoices on the spot. The faster you send it, the sooner you can get paid.
If you’re busy and need to get to the next job site, then communicate to your clients when they should expect an invoice from you. Next, set a reminder in your calendar to create the invoice and send it to your client.
They key is timeliness. The longer you wait, the longer it’ll take to get paid.
If you are having trouble remembering to complete invoices, try using calendar reminders to prompt you, include it as an item in your workflow to-do list, or use software that makes invoicing reminders a part of your HVAC workflow.
4. Adopt ePayments
Accepting payments quickly is one of the top HVAC business tips for making money faster: the faster you can get paid, the quicker you have money in your pocket, the quicker you can make strategic business decisions.
Accepting cash or cheques works, but clients might not always have those options handy. Accepting credit, debit, and ePayment in the field are convenient and progressive options to offer your clients.
Credit card payment is especially helpful for larger HVAC service calls. Clients might appreciate paying for their $5,000 bill on credit, rather than out of pocket.
We always take payment at the completion of a job. Whether it’s credit card or cheque, we’re collecting something.
Is it really worth it to get on board with credit and ePayments? Definitely. Here’s why:
- Customers love ePayments. Customers may voice disappointment if you don’t take credit cards, and avoid doing business with you. Credit cards can lead to more HVAC deals closed, easier customer payment options, and better perceived customer service.
- ePayments save you money. Offering credit payment and on-site ePayment options reduces the amount of time you waste chasing people for money, or going back to job sites to pick up a cheque or cash.
- Practically no paperwork. You don’t have to do paperwork when you create invoices and accept payments on-site with an ePayment system. It’ll automatically sync with your bookkeeping system.
- Less administrative work. You don’t have to be at a computer sending follow-up emails and doing bookkeeping for each job. That frees up time for you to work on more billable jobs or, better yet, generate new opportunities for your business.
Jason Hughes of Air Monkey AC in Texas says he’s accepted credit cards through Jobber since the business opened two years ago. He says that on-site credit card payments already account for about one third of the Air Monkey’s revenue. Some clients have even told him they wouldn’t have hired Air Monkey if the company didn’t have the technology to accept credit cards.
Accepting payment on site will help you ensure a steady cash flow for your business, wrap-up jobs more efficiently, and provide your customers with a modern, transparent service they understand and value.
Here’s how to use ePayments to speed up getting paid:
There’s a whole slew of ways that you can offer quick and convenient payment options: mobile credit and debit machines are one, recording card information is another, and finally, there are ePayments.
The beauty of ePayments is that they take the fuss out of renting and toting around a debit and credit machine. All you need is your smartphone and HVAC ePayment software.
The best ePayment options will allow you to vault a client’s credit card and charge them down the line if need be. It’s as easy as scanning the card with your phone.
To get on the credit, debit, or ePayment bandwagon, try exploring ePayment software, like Jobber Payments.
Given the ease of accepting credit cards through his smartphone, and the fact that the client is on-site for HVAC jobs, Jason says it’s standard practice to collect then and there.
“We always take payment at the completion of a job. Whether it’s credit card or cheque, we’re collecting something,” Jason explains.
Once you collect payment from your clients, be sure to send them a follow-up message thanking them for their business. Of course, the best ePayment software will help you automate this process, so you can move onto new business faster than ever.
Do you have any tricks of the trade for making money faster in the HVAC industry? Share them below!