It’s hot right now and you’re extremely busy. If you did things right, you’re probably coming off your most profitable summer ever.
You’re hearing about all this recession talk, but it’s not affecting YOUR business.
The truth is: People are hot, and they’ll do whatever it takes to stay comfortable. If their unit were to break down right now, installing a new one is MUST-HAVE.
But don’t forget… slow season’s just around the corner.
Last month, we talked about how we’re in a down market and shared some great ideas on maximizing every opportunity you have with customers.
But we didn’t touch on everything.
So this month, we’re covering what you should be doing to prepare for inflation, recession, and slow season. Specifically:
- How much $$$ should you stash away
- What out-of-the-box diversification is
- Why 56% of your customers need financing
What to do with all those summer profits?
The answer shouldn’t be a fall vacation. Or actually… maybe you can! It really depends on how prepared you are.
Prepared = Enough money set aside for your business (in an interest-bearing savings account) to sleep comfortably at night without concern for inflation, recession, and fall’s slow season.
But how much is enough?
Great question! It’s actually one that Ruth King has an exact formula for.
Here’s the breakdown:
- Look at the last 12 months of your business financials
- Identify your highest month of payroll – multiply that number by six
- Find your highest month of overhead – multiply by three
- Add those numbers together
- The total = your rainy recession, inflation, slow season fund
Diversify your business
Indoor air quality is certainly one idea that we’ve thrown around a lot. And that’s a grand idea if you haven’t gotten your business involved in it.
But this isn’t just about that. We’re asking you to really… 🢃
The reason for diversification: Imagine being the owner of multiple businesses in 2020 (when COVID started)… and 80% of them are restaurants.
Diversification is the answer. In the perfect world, you’d add services to your toolkit that you don’t have right now. This could be working with:
- plumbing contractors
- electrical contractors
- duct cleaners
- pool services
Partner up with as many as you can. Create a mutually beneficial relationship with them. Once you do, then it’s time to:
- Add these services to your website
- Let your customers know you offer them
- Tell your new partners to do the same
- Grow together
Only good things happen when you do this. Let’s say one area of your business is a little slower than usual. Well, you have other parts of your business that can pick up the slack.
As we enter into slow season – maybe it’s time to build those relationships and expand the services you offer. At the very least – Give it a good hard think!
Financing – Because customers can’t afford it
This is important.
A recent survey came out, and the news is eye-opening.
Turns out – 56% of Americans can’t cover a $1,000 expense. They don’t have it in savings.
Now, think about how much your products and services cost… Don’t you think it’s important and smart to offer financing to your customers? We think so – over half of them need it.
I know we’ve mentioned the importance of financing in the past, but we never shared exactly what financing sources you have access to. Let’s cover those now:
- In a small rural town – your local bank is the answer
- Large city – local bank is NOT the answer. You’ll want to consider:
Important to note that some of these financing companies will charge you a fee for using their financing. Savvy contractors will include this fee into the job cost💡You should be savvy.
Related Links to Resources, Content, Videos, and More
- This month, we are coming out with several REP Talk episodes that break down what is happening in our industry and how to prepare for what’s next. Check here often.
- Do you know someone who’s undecided on a career path? Share this with them.
- Are you looking for HVAC podcasts that aren’t boring? Here’s a curated list for you!
- Here’s how new construction companies are profiting from IAQ.