Columnist Richard DiToma explains how unapplied labor, or nonbillable hours, affects profitability and emphasizes the need for contractors to understand their maximum potential revenue-producing hours.

Knowledge, skills and performance excellence are essential for home services companies. However, understanding and accurately calculating tangible and intangible operational costs is vital for setting correct selling prices  — and achieving the desired profit margin. 

Contractors must understand business costs and how to turn a profit to succeed. To accomplish this, columnist Richard DiToma says that technicians must be trained to deliver excellent service and gain customer trust.

Columnist Richard DiToma discusses the challenges that plumbing and heating contractors face in their business operations, particularly related to rising fuel costs, inflation, customer relations and profitability.

Like ancient gladiators, contractors must exhibit weapons  (technical prowess) and armor (business acumen) to succeed. Understanding true costs, pricing services properly and running a business profitably will win the day. 

Don’t be late when you promise customers that you will be at their location at a certain time. When you are inconsiderate and waste a customer’s time, it looks bad and you may lose that customer. 

Richard DiToma shares his insights on how properly stocking service vehicles with essential materials can help control operational costs and improve efficiency. He highlights the significance of having a well-structured inventory list that includes regularly used items while excluding larger or rarely used items.

Arriving at the right prices for your home services business to thrive is a matter of proper calculation, not guessing or charging a dollar less than your competitors. Wrong results are always arrived at when numbers are not properly calculated.

As contractors juggle correct pricing, fair employee compensation, and personal salaries, it’s important to know and understand their business costs and how many tech hours they must sell to ensure the company is not losing money.