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Cutting expenses

John R. Hall
John R. Hall Member Posts: 2,246
Have any of you guys got any tips from the people you buy from? Or any of your peers or network partners?


  • John R. Hall
    John R. Hall Member Posts: 2,246
    Cost savings measures

    With the economy slumping I am curious as to what measures contractors are taking to cut costs. Are you looking at a certain percentage to cut? Discounts on equipment/supplies? Reducing labor costs? Buying in bulk? Maybe some tips or suggestions would help some other contractors. Please let me know here or offline. Thanks.
  • kpc_20
    kpc_20 Member Posts: 19
    I'm trying

    to cut back on my fuel costs...doing small service calls in the toyota corolla....kpc
  • David Sutton_6
    David Sutton_6 Member Posts: 1,079
    Horse power

    Thinking about a set of saddle bags for the horse .
    but i do spend more time out of the big box truck and try to group calls.
  • Al Letellier_21
    Al Letellier_21 Member Posts: 402
    cutting expenses

    I myself am getting out of the wrenched business, but to answer your question, cutting prices isn't the answer. Our costs are the same or more everyday. Why would we, or how can we afford to cut. Watching and controlling expensed and maybe trimming the excess stuff can help, but I haven't seen lower fuel or insurance costs lately. I have never gone down on rates or markup unless I chose to help someone out.

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  • robert griggs
    robert griggs Member Posts: 65
    While we are slow,

    we cleaned out the shop and returned anything we could to the supply houses, and scrapped a lot of damaged material.
  • Rocky
    Rocky Member Posts: 121
    tighter inventory control

    techs had been able to buy whatever, whenever, but after looking around shop and vans at all the dead or out of date stock, or damaged stuff, no more. PO system with authorization from office manager or warehouseman first. Also, refocused attention on dispatching techs to similar geographic locations instead of running them around west to east all day long. Installed more efficient boiler in my own shop. Prefabbing alot of the installs in my shop now to keep field labor to a minimum. Every little bit helps.

  • Josh M.
    Josh M. Member Posts: 360

    John, I cut my fuel bills by over 15% by having our mechanic limit our vans to 62MPH and teaching our guys to manage their gas pedals. As an incentive we give $100 bonus each month to the guy who gets the best mileage improvement.

    Also, we have had a major focus on efficiency. That means ensuring our supply deliveries are correct and on time, limiting our trips to the supply house.

    Thirdly we invested in fabrication machinery and shop space so we can get the majority of our jobs pre-fabbed at the shop again saving gas.

    I think it is very important to keep your staff busy and pay them well. I would give up every luxury we have before letting go of top notch guys.

  • you gas hog!

  • Empire_2
    Empire_2 Member Posts: 2,343
    Josh, words od wisdome,...BUT

    :-) I can only tell you that I am alway's thinking and it's a trial and Error kind of thing. GAS PRICES is bar none one of the most troublesome things I can possibly ponder and we all try to work out or move our cost's to other aspect's of this field but the plane truth is that things are going UP!!!!!. Look at the airlines,... The first bag $15.00 additional. If we do that, people think we are nut's.

    If anyone here does not think this country is in, at least the first stages of a resession........"Check your history. I personally had to raise prices a little just to cover gas,(1) cost of the ever rising Insurenace man (2) Etc.....

    Although I am not panicing I have the luxery of being small and posess the gift to deliver what I promise. Having said that, I am ALWAY"S bartering with the customers. Commercial or Residential,...Don't matter. We all have to make a living.........

    Mike T.

    P.S. All opinions in or on this matter are important for we all have way's or tactic's of trying to deal with the ever rising cost of doing business...............:=)

  • John R. Hall
    John R. Hall Member Posts: 2,246
    Some great ideas

    I don't like the cliche 'out of the box thinking' but you really need to be creative nowadays. Let's call it 'crossing the line' thinking. At least that is not overused -- yet.

    My idea (although not a reduction in business expenses) is to ride my bike one mile to the grocery store and make a couple of trips rather than one with the gas hog Explorer I drive. I save money and get badly needed exercise. I will probably be tired but have more money to spend on snacks. Call it reverse logic.

  • bruce_21
    bruce_21 Member Posts: 241

    I've learned to get the lead out of my foot and coast, as in put it in neutral, down hills. My overloaded pick-up used to get about 15.5 mpg now its at 19.5 for this last tank. I got help from this cool tool which gives real time gas mileage readings http://www.scangauge.com/ It will also read your error codes and reset the check engine light.
  • zeke
    zeke Member Posts: 223

    quote"John, I cut my fuel bills by over 15% by having our mechanic limit our vans to 62MPH and teaching our guys to manage their gas pedals. As an incentive we give $100 bonus each month to the guy who gets the best mileage improvement."

    Let's say the tech has a call 60 miles away and he goes 60mph and you get 15mi/gal on your van and gas costs $4/gal. Then the gas cost is $16.

    If another tech does the same trip at 70 mph it takes 60/70 hours to get there or 14 % less time. So if you save 15% in gas, it costs you 14 % more in tech time to slow down.
    If the tech gets $20/hr, it costs you $2.80 in time and saves you .15*16= $2.80 or not much different.

    Of course I made a few assumption..... so please forgive my math.
  • jp_2
    jp_2 Member Posts: 1,935
    well I'll say this

    I can't tell you how many people have gone flying past me, pedal full to the floor to pass just to end up turning 1/8 mile up the road, what a waste.

    we are in such a hurry to get nowhere.
    WV EGBERT_2 Member Posts: 98
    For the summer

    I'm doing 4 days a week , 9 hour days. This saves me the extra day of gas,(not unless I have an emergency or estimate to go to) And four hours less in employee pay. (And he's still happy)
    I get to use the Friday to do office work or material orders for the next week.
    And I get to spend more time with the family for the summer.

    This schedule works for me as I do mostly new or renovation type projects, and little service calls.

    I may make this a permanent thing. Come fall.

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  • Scott Kneeland
    Scott Kneeland Member Posts: 158

    I changed Insurance companies and saved $3100.00 with bette coverage.

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  • kevin_60
    kevin_60 Member Posts: 38
    cutting costs

    If your a licensed plumber check out wolverine brass. Most of there stuff is way cheaper than a supply house. A salesman comes to our shop once a week and they ship to our shop. I keep my truck and shop well stocked and only go to a supply house for odd ball stuff or fixtures. Also check out local associations, you can get group rates on insurance.
  • Weezbo
    Weezbo Member Posts: 6,232

    *#1. Only eat on Wednesdays.

    # 2. Eat up all "see food" at trade shows

    #3 if you are in the middle of the Work and someone says, "The Food is Ready"

    put the Wrench DOWN! *~/:)

  • Rich Kontny_3
    Rich Kontny_3 Member Posts: 562
    Lot's of Ways

    While we are still in the shock period of these high prices I see that Mo-peds are making a comeback, scooters are selling at brisk paces. Spring planting is underway and a nearby farmer left his tractor in his machine shed and used his beautiful Belgium draft horses this year.

    Ethanol while having its own set of manufacturing concerns is getting farmers record prices for corn and many are buying "Flex Fuel" vehicles where they can use regular unleaded or E-85 (the ethanol blend)

    In the early eighties I worked on a pellet factory in northerm Wisconsin that after a short time went broke and had been mothballed. Recently a fairly large lumber and timber company from Minnesota bought the entire site and is going to reopen the pellet facility by late year.

    I don't see much car pooling yet and I think the schedules and flexible work scedules of today make car pooling difficult for many. Unless a group of people work at the same place or within short distances of one another I don't see this coming back.

    Mass transit in at least the Milwaukee area is stone age and shortsighted politicians would still rather build highways than light rail.

    There is now renewed interest in high efficiency vehicles,appliances and anything that consummes energy. Due to the internet and its resource quick capabilities I see many asking and joining the "Green Movement". In the last two months I have submitted quotes on large green projects with solar positioning of the buildings,green roofs for cooling,renewed interest in heat pump type systems and many retrofit high efficiency heating and cooling systems.

    Like I said America is getting over the shock big time and is responding now that all of this has hit us in the pocketbook.

  • John R. Hall
    John R. Hall Member Posts: 2,246
    Four day work week

    I see a big increase in companies going to a four-day work week, getting employees to work 9-10 hour days and one less travel day to work. In theory it is great, especially for those who work in the office, the non-retail or service industries. But it is pretty difficult for service contractors to tell customers they are closed Friday-Sunday. Alternative fuel or hybrid vehicles are probably the more realistic choices for people in the HVAC trade.
  • Cosmo_3
    Cosmo_3 Member Posts: 845

    There is at least one large PHC company here that is already working guys on a 4 day work week. It is a great idea if you have enough help to cover all the days.

    One problem with guys that do new work now may be that with all the competition for the few houses being built nowadays the last thing a builder needs to hear about is a PHC crew that works a 4 day week......yikes! If it ain't on time there's a long line of guys willing to work weekends......

    This is an interesting thread!
  • Bill W@Honeywell
    Bill W@Honeywell Member Posts: 164
    Check the tires!

    Underinflated tires suck up lots of extra gas. Check the tire pressures cold, and add air to meet the required pressures, usually found on a sticker on the doorframe or in the trunk, or in the vehicle's owners manual. Drive the speed limit. Every MPH over 55 uses more gas. Have whatever employees you can work from home; the cost of a DSL or cable hookup is less than gas wasted, especially sitting in traffic. Open windows create drag at highway speeds, using more gas. Maintain your vehicles properly. Avoid "jackrabbit" starts, and eliminate all unnecessary weight from your vehicles.
  • Glen
    Glen Member Posts: 855
    the other side of the coin -

    is the recognition of billable vs non billable hours - and the question of converting non billable time to billable. 2 years ago we subjected the company to the scrutiny of a business coach. He certainly reinforced many points in Ellen Rohr's books and added a few wrinkles. Do you charge for analyzer rentals? Are shop supplies included in every invoice as a separate line item? Is your fuel surcharge reflective of prices in your area? Is the markup/margin appropriate? Are you able to shop around for liability insurances? Is your stock reflective of the work you do - or is time wasted "waiting" for materials to complete a project? Is your hourly rate appropriate for the skills and knowledge base offered? (or as my coach plainly told me "stop looking at the other guys and concentrate on your services - and get paid for them".
    Our ability is reduce costs is finite - while our opportunity to correctly invoice is not. Know your costs - all of them.
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