Every HVAC job has a budget. Most owners assume losses come from big mistakes, not small ones. Not only that, but those small mistakes are often in the small, repeated inefficiencies during the course of the job.

There's one fact that HVAC business owners learn the hard way: Unprofitable estimating habits and inefficient crews can wipe out the margin.

Over Budgeting Jobs

Most owners attribute the job cost going over to the technicians on the job site. However, the cost for the job is often set when the job is bid. If the person preparing the bid doesn't fully account for the material costs, the job will never have a chance to stay on budget. It is understandable for businesses to want to win the bid, but if the estimate is wrong from the beginning, then the job will likely not be as profitable as originally thought. This leads to a second major problem: crew inefficiency.

Here's a common scenario related to said second major problem: technicians discover they're missing a tool while working on a job. So they run to the hardware store to pick up the tool they need. This puts a pause in the job that could've been prevented and costs the business more time than they budgeted for. There are a wide array of possible reasons for why these technicians didn't have that particular tool, but one of them could be that there was no prep work completed before the job started.

Crew Inefficiency

One common scenario in which crew inefficiency takes place can be the following: a business owner sends two technicians to a job site to install a furnace, and the truck delivering the furnace is two hours late. It takes them a half an hour to an hour to set up the site before they begin work. So rather than setting up and breaking down the site, the technicians just wait for the delivery. However, that costs an extra two hours on the job.

Or maybe they run out of materials while they're working on the furnace. So they drive to a hardware store to buy more. However, instead of one of them staying behind at the job site, they both drive to the supply house. That, too, costs extra hours on the job.

There are a number of reasons why technicians run out of materials on the job. Maybe the truck wasn't stocked properly to begin with. Maybe there wasn't a clear, documented pre-job checklist for the technicians to follow to ensure that they had everything they needed for the job. Regardless of who or what is to blame, there are ways to prevent technicians from taking unnecessary trips to a hardware store.

Here's another common scenario: a couple technicians are on a job site that's located two hours from where they live. They arrive on time, unpack all the materials from the van, and get to work. They reach the end of their workday, so one would think they would head home. But they realize that if they work an hour overtime, they could finish the job and not have to drive back the next day. So that's what they do. This might seem like a smart, efficient strategy to some, but to business owners, this might be utter chaos. When a business creates a budget for a job, one of the items they budget for is labor. If technicians work overtime on a job, and it's not budgeted for, the business owners have to scramble to get these technicians paid for all the time they spent on the job. If the technicians had called the office to communicate what they were thinking of doing, the business owner would've had a little bit of a heads up and would've been able to consider paying the technicians overtime without panicking about where the money will come from.

Uncoordinated Labor on the Job Site

It's also common that, when two technicians are on a job site, they don't always divide and conquer. Often, they may both troubleshoot the same issue, or one troubleshoots while the other stands by idly waiting instead of working on another task to keep things efficient. Technicians aren't paid to stand around doing nothing, and labor costs will go up for business owners when both technicians troubleshoot an issue when that's completely unnecessary. Someone needs to be the lead on every job. Even a two-man crew needs a clear hierarchy. This could be accomplished by pairing a younger, less experienced technician with a more experienced one, or even a fast, efficient, knowledgeable technician with a slower, less efficient one.

Conclusion

Not all of these inefficiencies are the result of bad employees; they're often the result of missing systems. However, even small process improvements compound: fixing just two or three of these habits can meaningfully change a business's margins.

Are you ready to find ways to make your business run more efficiently and not break the bank? Book a consultation with Joseph.

Disclaimer: The information in this post is intended for general guidance purposes. For advice specific to your business finances or taxes, consult a licensed accountant or financial advisor.