It’s only $1! It can’t make much of a difference. Well, if you’re really hungry and you only have $1 in your pocket, you can stop at your local burger chain and get a dollar meal deal to fill your belly. Not bad for a buck.
If you’re out with your best buddy at a college hangout and each of you has a buck, you can pool your money and buy a two-dollar 16 oz. PBR, grab a plastic cup, split a cold one and you’re part of the scene. Ahhhh! A dollar can really make a difference.
What difference does a dollar mean for your business? Again, it’s only $1, right? Well, it depends on your perspective. If you pay your service or office person an extra dollar per hour, that’s eight dollars a day or forty dollars per week. It means your employee can buy lunch every day at a fast-food joint. It may be significant.
But what about your hourly service rates? Will one dollar make a difference?
Considering that you generally bill four hours per day for each service person, that’s twenty hours per week and a thousand hours per year. Increasing your HVAC hourly rate by $1 will mean about an extra thousand dollars per service person.
What does it mean to your business?
If each of your service vans drives 18,000 miles per year and gets 12 miles per gallon and you pay $3 per gallon of gas on average, your annual gas expense per service van is $4,500. One thousand extra dollars offsets 22% of the gas expense for that vehicle. Not bad for only a dollar increase in your hourly rate.
As a percentage of hourly rates, one dollar is .013 at $75, .01 at $100, and .008 at $125. Again, not much.
If you raise your hourly rate by one dollar, a one hour repair will obviously only increase in cost to your customer by one dollar. If that repair before the increase was $320, it will now price out at $321. Not much in the greater scheme of things and no big deal.
In multiples, a buck really adds up. If you go up just five dollars per hour. The $320 repair becomes $325, still no big deal, but you just offset that gasoline expense for the entire year for that service van and possibly banked an extra $500!
The old saying was, “Take care of the pennies and the dollars take care of themselves.”
My suggestion is to take care of each dollar and don’t get hung up on thinking, “It’s only a dollar!”