Is your service department draining profits instead of generating them? In this practical episode, Martin and Khalil tackle a real contractor dilemma: how to transform service calls from costly overhead into a profitable business segment. Discover why your current pricing model might be leaving thousands on the table and the straightforward systems you need to fix it.
What You’ll Learn
- Why mixing service and install teams creates hidden profit leaks
- How to properly calculate service call pricing (hint: it's much higher than you think)
- Simple systems to separate service operations for clarity and profitability
- Why treating service as a "loss leader" is destroying your margins
Time Stamps
- 00:52 - Episode Intro
- 01:02 - The Service Dilemma
- 03:23 - Exploring Solutions and Pricing
- 17:37 - Final Thoughts and Takeaways
Snippets from the Episode
- "If I can't figure out what something costs me and what I gotta sell it for, then I shouldn't be doing it." - Martin Holland
- "I think the way that this gets created is you start thinking 'If I can't service these clients, the builder's gonna get upset and not give me new jobs.' So we have it as a loss leader. That's a recipe for disaster."- Khalil Benalioulhaj
- "Make some estimate and just make sure the estimate is high enough that it's worth it. If we get half of our estimated calls, we still make money."- Martin Holland
- "You gotta know your costs. That's the takeaway."- Martin Holland
Key Takeaways
- Double your service department costs at a minimum when setting prices
- Separate service from installation teams completely
- Stop treating service as a loss leader
- Understand the full cost of running a dedicated service department
- Be bold with pricing until you get pushback
- Service should have its own tracking and profit metrics
- Service work requires specialized skills and dedicated resources
Resources
- 24 Things Construction Business Owners Need to Successfully Hire & Train an Executive Assistant
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