A Job Analyzer Tool Will Keep You in the Black Year After Year
Mike “Sparky” Detmer ([email protected]) is president of Niles Audio
Ask any custom installation professional what he or she cares about most and you’ll likely get the response, “my tools.” And boy, does our industry have a lot of them. They cut holes, pull wires, terminate cables, and even analyze walls to find wood, metal, and live wiring hidden behind. But that’s just the hardware. Open that same installer’s laptop, and you’ll see a whole different palette of utensils that configure systems, write code, analyze networks, and manage power remotely.
If this sounds a little like you, I’ll bet that there is one tool you probably haven’t given much thought to using, but it will help you to make better decisions about the jobs you bid and the prices you quote. It’s an instrument that will enhance your profits and fuel your business like no other. The tool I’m speaking about is, what I’ve named the Job Analyzer. It’s a simple little decision matrix that, when applied properly, will keep you in the black year after year.
You can improve your business results by quickly taking a statistical look at the components of the jobs you bid and adjusting accordingly.
The premise of the Job Analyzer is simple. It helps you look at several parameters of the job you are about to bid and points you in the direction of higher profits by examining a variety of critical criteria.
Here’s How it Works
First, make a simple spreadsheet. Or if you prefer, send me an e-mail, and I’ll send a preconfigured sheet to you. In column “A,” list the critical job criteria that will likely affect your profitability. For instance, you can list factors like the size of the job in dollars, the amount of billable labor, and the profit dollars from gear you sell. But be sure to list other criteria that can have an impact on your time and profit like the distance to the job from your office, the time required to complete the job, and if there are any subcontractors you will rely on to get the work done on time. Also list a row for your gut feel. This is so your emotions can have a say in the decision too.
To use the Job Analyzer, just fill in column “B” with a number between 1 and 100, with 100 being ideal. So, for instance, if the size of the job in dollars is high, you might rate it an 85. But if the job is 200 miles from your office, then you would rate that criteria a 10 because it is not advantageous to your business. Once you have all of the criteria rated, total the score. Now here’s the key: Take a look back at some of your best jobs, pick one, and rate it as you would a potentially new job. Now you’ve got a reference. Then all you have to do is compare your new potential job score to the reference to evaluate it.
Why It’s is a Valuable Exercise
This technique is valuable in two ways. One is in selecting the jobs you choose to work on and another is in the prices you charge to maximize your return. During the busy summer season, sometimes job opportunities conflict with one another. If you find yourself in a situation of choosing between two jobs, the Job Analyzer will help you pick the winner. In pricing your jobs, the Job Analyzer can help you to understand where to increase prices and still stay competitive. An example might be charging a premium because of distance to the job or increasing your labor rate because the job has so many low-margin items like TVs.
Just like the story of Moneyball, where the main character Billy Beane improved the Oakland Athletics team results by applying statistical analysis of its baseball players to his game strategy, you can improve your business results by quickly taking a statistical look at the components of the jobs you bid and adjusting accordingly. Use the Job Analyzer to bid wisely and watch your business grow.