Growing Your Service Business
Blast through the next plateau!
ACCA 2012
Austin, TX
October 11-12, 2012
NATFH FMS
Profit Enhancement Partnership
Austin, Texas
Bill Bernick
Daimler Management Services
25 years Carrier and Trane
8 years as an entrepreneur
European Automotive Service Co.
Business Consulting Company
PCA Racer/Travel/Boating
October 2012
NATFH FMS
Profit Enhancement Partnership
Objective today
• A look at how to ‘Bust
Through’ some very
traditional Service Revenue
and PBT Plateaus and
improve your overall Service
Business!
Profit Enhancement Partnership
Austin, Texas
October 2012
Agenda
•
Review Agenda and objective
(5 min)
•
Review Standard Plateau points
 Why
(5 min)
•
Compare and Contrast $2M, $5M and $8M (15 min)
•
Discuss differences in a $2-$5M and a $5 -$8M.
NATFH FMS
Profit Enhancement Partnership
Agenda
Agenda continued
•
Service Agreement Tracking Tool
Input Worksheet
Plateau Buster Actions
–
(30 min)
$2-$5Maus and grow profitably. (stress Personnel, management, span of control,
# of New
Agreements
process, etc.)
•
booked volume as of 12/31/99
Question and Answer
(20 min)
# of contracts as of 12/31/99
New
Service
Agreement
Renewal
Increase
Increase
Coverage
Decrease
Coverage
Agreement
Total
January
$
-
$
-
$
-
$
-
$
-
February
$
-
$
-
$
-
$
-
March
$
-
$
-
$
-
$
-
$
$
$
--
April
$
-
$
-
$
-
$
-
$
-
May
$
-
$
-
$
-
$
-
June
$
-
$
-
$
-
$
-
$
$
$
$
---
July
$
-
$
-
$
-
$
-
$
-
August
$
-
$
-
$
-
$
-
$
-
September
$
-
$
-
$
-
$
-
October
$
-
$
-
$
-
$
-
$
$
$
$
---
November
$
-
$
-
$
-
$
-
$
-
December
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Total
0
Lost Agreements by Category
Change
Owner
$
-
Competitive
Service
$
-
New
Trane Jobs
$
-
Owner
Service
$
-
Time &
Material
$
-
Lost
Agreement
Total
$
-
February
$
-
$
-
$
-
$
-
$
-
$
-
March
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-$0
-
$
April
$
-
May
$
-
$
-
$
-
$
-
$
-
$
-
$
-
June
$
-
$
-
$
-
$
-
$
-
$
-
$
-
July
$
-
$
-
$
-
$
-
$
-
$
-
$
-
August
$
-
$
-
$
-
$
-
$
-
$
September
$
-
$
-
$
-
$
-
$
-
$
-$0
-
$
$
$
--
October
$
-
$
-
$
-
$
-
$
-
$
-
$
-
November
$
-
$
-
$
-
$
-
$
-
$
December
$
-
$
-
$
-
$
-
$
-
$
-$0
-
$
$
$
--
$
-
$
-
$
-
$
-
$
-
$
-
$
-
# of Lost
Agreements
January
Total
-0
$
$
$
Net
Change
--
NATFH FMS
Profit Enhancement Partnership
Austin, Texas
October 2012
• What does a Plateau look and sound like?
“We just can’t handle any more work”
- Service Manager
“Sales are growing but profit is stagnant”!
- Controller
“Sales are not growing because the darn ops group can’t do any more”
- Sales manager or Sales people.
“You sure are losing a lot of people”
- HR Manager
“You used to do a lot better job taking care of me”
-Customer
“I could sell more but I don’t have any faith that Ops could deliver more” - Salesman
“It’s not as much fun as it used to be…..we were like family!”
- Administrator
“We sure are working hard but I don’t see any additional profit!”
“You used to give me enough time with my customers but now it is chaos”
- District Manager
- Technician
NATFH FMS
Profit Enhancement Partnership
Exceptions to the Thresholds
• Strong leadership can delay the
effect….for a while
• Skimming
(a potential $10m business only doing $4m)
ACCA Service Managers Conference Oct 2012
Let’s Look at
Trend for the
representative
business for a
$2 Million
Plateau
$2 Million Plateau
2500
2000
1500
Revenue
PBT
1000
500
0
Profit Enhancement Partnership
Austin, Texas
October 2012
$2 Million Plateau Breaker
• Let’s Look at
Trend for the
representativ
e business for
a $2M
Plateau
Breaker
4000
3500
3000
2500
2000
1500
1000
500
0
Revenue
PBT
Profit Enhancement Partnership
Austin, Texas
October 2012
$5 Million Plateau
6000
Let’s Look at
Trend for the
representative
business for
$5M Plateau
5000
4000
3000
2000
1000
0
Revenue
PBT
Profit Enhancement Partnership
Austin, Texas
•
Let’s Look at
Trend for the
representativ
e business for
$5 M Plateau
Breaker
October 2012
$5 Million Plateau Breaker
7000
6000
5000
4000
Revenue
PBT
3000
2000
1000
0
Profit Enhancement Partnership
Austin, Texas
October 2012
$8 Million Plateau
12000
•
Let’s Look at
Trend for the
representati
ve business
for $8 M
Plateau
10000
8000
6000
4000
2000
0
Revenue
PBT
Profit Enhancement Partnership
Austin, Texas
October 2012
$8 Million Plateau Breaker
12000
•
10000
Let’s Look at
Trend for the
representative
business for
$8 M Plateau
Breaker
8000
6000
4000
2000
0
Revenue
PBT
NATFH FMS
Austin, Texas
Like a Family
One Man Show
Strong Technical Leader
10 Technicians
1 Admin / Dispatcher
1 Service Sales
Family Run
Many Manual Systems
Some Spreadsheets
Compensation Driving Ind.
Performance
Good Cust. Relations (All “A”
Accounts)
Profit Enhancement Partnership
October 2012
NATFH FMS
Profit Enhancement Partnership
Austin, Texas
October 2012
Like a Family
One Man Show
Business is in Transition from
“Family” to a Professional
Business
Strong Technical Leader
10 Technicians
1 Admin / Dispatcher
1 Service Sales
Manager Tech & Business
2 Team Leaders
25 Technicians
2 Administrative
1 Dispatcher
3 Salesmen / 1 Sales Leader
Family Run
Many Manual Systems
Some Spreadsheets
Compensation Driving Ind.
Performance
Good Cust. Relations (All “A”
Accounts)
Automated Service Accounting
Dispatch Board and/or Computer
May have Teams
Comp. May Drive Teamwork
Has “A/B/C” Customers
Not w/ Customers as much
Family Transitioning to Business
NATFH FMS
Like a Family
One Man Show
Strong Technical Leader
10 Technicians
1 Admin / Dispatcher
1 Service Sales
Family Run
Many Manual Systems
Some Spreadsheets
Compensation Driving Ind.
Performance
Good Cust. Relations (All
“A” Accounts)
Profit Enhancement Partnership
Business is in Transition from
“Family” to a Professional
Business
Truly a Professional
Business
Manager Tech & Business
2 Team Leaders
25 Technicians
2 Administrative
1 Dispatcher
3 Salesmen / 1 Sales Leader
GM of Service Operations
4 Team Leaders
40 Technicians
2 Resource Coordinators
2 Administrative
Sales Manager
5 Salesmen
Possible Project Manager
Automated Service Accounting
Dispatch Board and/or Computer
May have Teams
Comp. May Drive Teamwork
Has “A/B/C” Customers
Not w/ Customers as much
Family Transitioning to Business
Many Spreadsheets
Management by Exception
Communication Challenges
“A/B/C” Customers layered
Projects
Comp. Drives Teamwork
NATFH FMS
PDrofhancement
Differences
We are a Business now. More
Policies
Need to think about changing
Is Service Manager the “Right
Guy”?
Do we need Team Leaders?
Enhanced Communications
Compensation must drive
working together
Some sophistication needed
NATFH FMS
Profit Enhancement Partnership
Differences
Differences
We are a Business now.
MOPP’s Prevail
Need to think about changing
Task / People Management are equal
Meetings need to be more effective
Is Service Manager the “Right
Guy”?
Do we need Team Leaders?
Enhanced Communications
Compensation must drive
working together
Some sophistication needed
Service Leader has P&L strengths
over Technical
Communications extreme importance
Promote from within? Team Leader
Service Manager, Admin?
Sales Management is a Force
Modular Teams are in place
Comp Plan fosters Teaming
PCT Dollars PCT
100% $5M
(30%) 1.5M
(20%) 1M
(42.2%) 2.11M
7.8% 390K
Dollars
PCT Dollars PCT
Dollars
100% $5M
100%
(30%) 1.5M
(30%)
1.95M
(20%) 1M
(20%)
1.3M
(42.2%) 2.11M
(34%)
2.21M
7.8% 390K
15%
$6.5M
1.04M
5 Key Service Measurements
• Non Revenue producing
time
• S/A compliance
• S/A renewal rate
• GM deviation vs. est. for
S/A
• GM Deviation vs. est. for
Quoted
What role does sales have?
• Productivity Bench Marks
Total Sales Volume Per Service Sales person
•
1-2 year 200-400K
•
2-3 year 400-600K
•
3 plus
750K and up
Productivity Measurements
•
•
•
Closure Rate/Calls per week-New /Existing
Quotes per week
Do You know your number!
Backlog Hours: 3 month minimum desired
•
New S/A’s Sold
$125k-$175K per year!
Summary of findings
• Processes
• Systems
• People
All these must grow and develop for you
to bust through the plateau
NATFH FMS
Profit Enhancement Partnership
Dallas, Texas
September 2000
Differences
Differences
We are a Business now.
MOPP’s Prevail
Need to think about changing
Task / People Management are equal
Meetings need to be more effective
Is Service Manager the “Right
Guy”?
Do we need Team Leaders?
Enhanced Communications
Compensation must drive
working together
Some sophistication needed
Service Leader has P&L strengths
over Technical
Communications extreme importance
Promote from within? Team Leader
Service Manager, Admin?
Sales Management is a Force
Modular Teams are in place
Comp Plan fosters Teaming
Summary of findings
By looking ahead, you can avoid the next
plateau……
It is all about the people, processes and your
organization…..
..and taking the time to work ON your business
rather than in your business
What can you do?
What can help you
manage through
these Plateaus?
•
•
•
•
Profit Enhancement
Partnership
Organizational Design
Make the changes that will
allow you to go to through
these plateau.
Be ahead of the game for the
next plateau!
–
Service Agreement Tracking Tool
Input Worksheet
booked volume as of 12/31/99
# of New
Agreements
# of contracts as of 12/31/99
New
Service
Agreement
Decrease
Coverage
Agreement
Total
January
$
-
$
-
$
-
$
-
$
-
February
$
-
$
-
$
-
$
-
M arch
$
-
$
-
$
-
$
-
$
$
$
--
April
$
-
$
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$
-
$
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$
-
M ay
$
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$
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$
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$
-
June
$
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$
-
$
-
$
-
$
$
$
$
---
July
$
-
$
-
$
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$
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$
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August
$
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$
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$
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$
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$
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September
$
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$
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$
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$
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October
$
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$
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$
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$
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$
$
$
$
---
November
$
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$
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$
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$
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$
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December
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Total
0
Renewal
Increase
Increase
Coverage
Lost Agreements by Category
# of Lost
Agreements
Lost
Agreement
Total
-
January
$
Change
Owner
-
$
Competitive
Service
-
New
Trane Jobs
$
-
$
Owner
Service
-
Time &
Material
$
-
$
February
$
-
$
-
$
-
$
-
$
-
$
-
M arch
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
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$
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$
-$0
-
$
April
$
-
M ay
$
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$
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$
-
$
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$
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$
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$
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June
$
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$
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$
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$
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$
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$
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$
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July
$
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$
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$
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$
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$
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$
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$
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August
$
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$
-
$
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$
-
$
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$
September
$
-
$
-
$
-
$
-
$
-
$
-$0
-
$
$
$
--
October
$
-
$
-
$
-
$
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$
-
$
-
$
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November
$
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$
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$
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$
-
$
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$
December
$
-
$
-
$
-
$
-
$
-
$
-$0
-
$
$
$
--
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Total
-0
$
$
$
Net
Change
--
NATFH FMS
Profit Enhancement Partnership
Austin
Questions
and/or
Answers
October 2012