On this episode of the Profit Roadmap, we welcome Jonathan Pototschnik—an entrepreneur, visionary, and co-founder of Service Autopilot, CitiTurf, and several other very successful businesses.
In this episode, you’ll learn:
- Best advice for new service businesses
- Why AI will change the way we work
- The easy way to increase prices
- The most important skills to learn for service business owners
- The best way to understand your team members
How Jonathan Got Started
Jonathan got his start in the service industry shortly after high school mowing lawns. Shortly after that, he owned a variety of service businesses and quickly saw the struggles that come with owning businesses in this industry. That’s what led him and his business partner to create Service Autopilot.
Why Pricing Matters
One of the biggest mistakes Jonathan sees service industries making is around pricing. This was especially true during lockdowns and has become a bigger issue as inflation has increased.
Part of the process comes down to thinking about all the costs that go into the services you are offering. Jonathan talks about the increase in the costs of trash bags, equipment, chemicals, and more, which all affect the bottom line. That translates to increases in prices.
This is compounded by the fact that a lot of service businesses were likely priced too low from the start. This is very common with new service businesses as they see this as an easy way to be competitive.
The problem is that if you aren’t making enough from the start it translates to the health of the company overall. Low profit margins mean holding off on buying new equipment which could also increase profits through additional service offerings. It can also mean delaying new hires and making other investments in the businesses.
How to Fix Pricing
Jonathan says that pricing has been one of the most common topics he noticed when he was leading Academy. He says that many service business owners would “guess” what the price should be, instead of doing the research to figure out how much they can charge to increase profits.
While most service business owners fear losing customers over price increases, Jonathan says that it isn’t that bad. He says that what it comes down to is having that internal conversation where you finally decide that you need to take action and raise pricing.
After that, it is pretty simple, you start the communication process. Jonathan says that it is important to state the “why” behind the price increase which is related to one of his favorite sayings, “Facts tell, stories sell.”
Jonathan loves being able to start with some one-on-one calls. This can help you better understand where the customer is coming from and their concerns. If you’re going to raise your prices across the board, this is valuable information you can include when sending an email to a large volume of clients.
The reasons “why” don’t have to be complicated and can simply be about how your service business wants to continue delivering the highest levels of customer service and being able to hire the very best people in order to do that.
But we know what you’re thinking… “What if someone pushes back and leaves?!?” Jonathan says that he has done numerous price increases over the years. Even if you have one hundred clients and 3% get angry. Think about it… The risk is minimal and you’ll be able to increase profits which can help your company continue growing.
The bigger risk is waiting too long to increase profits and having your business be in a tough spot. Even though it might feel tough, increasing prices is one of the best moves you can make.
The Best Skills to Have
Jonathan says that one of the best skills for those who are just getting started and/or with a smaller service business is to really focus on developing sales and marketing abilities. If you’re selling small ticket items (e.g. lawn mowing) it can be easy enough to get by with just basic marketing abilities.
But if you’re closing high ticket items (e.g. irrigation, new HVAC system, etc.) that makes the sale a bit tougher and requires more skills to get the customer to take action. This might mean hiring a dedicated salesperson, more training for your team, and a better understanding of your ideal customer.
Reaching the Next Level
Jonathan is a big fan of coaching and mentoring which is why he created Academy. He says that getting help and learning from a community of your peers is really one of the fastest ways you can take your company to the next level.
Lots of service businesses that have achieved a small amount of success think that what got them here will continue to take them to new heights. But the reality is that you need to take new actions, learn more, and really work on your business to achieve those massive levels of growth.
Jonathan has seen a big increase in coaching groups in the service industry over the recent years. He feels this is a testimony to how powerful a step this can be for service business owners. If you want to learn more about getting in touch with a powerful community and learning from some of the best coaches, check out Field Services Academy.
While we love AI on this podcast, Jonathan is one of the first industry leaders we’ve talked to who has a unique perspective on this emerging technology.
Jonathan says that AI technology will impact just about all areas of business and life. The big question that he still sees is when this shift will happen, and there are still a lot of variables in play with a variety of companies that offer AI solutions like Bard and ChatGPT.
He says that with most things technology everyone likes to make big tech predictions. Sometimes these predictions come true, but oftentimes it is a lot later than most people expect.
Jonathan says that if you are going to make a bet in your business, don’t make it solely on the headlines you read about new technology like AI. A better approach is to look at what is available today and see how you can include that in your business now.
Jonathan also recommends that you think about data. The amount of data that your company is using now could have a substantial impact on your business going forward. He uses the example of recording phone calls. There is some technology that will allow you to upload those recordings, have them analyzed, and then use those insights to improve sales and customer service.
Understanding Your Team
One of the tools that Jonathan loves is the Kolbe assessment. This is a test he has used with a variety of different teams. Simply put, it allows you to better understand people, how they work, how to communicate with them, and the types of things they need to be more successful on a project.
Click here to learn more about this assessment.
Jonathan is on a bit of a hiatus right now but says that Facebook is one of the best places to find him. He said he’ll announce his next project there as soon as he figures out what it is!
The following music was used for this media project:
Music: Summon the Rawk by Kevin MacLeod
Free download: https://filmmusic.io/song/4434-summon…
License (CC BY 4.0): https://filmmusic.io/standard-license