· Your Scalable Growth Business Model (SGBM) Instant Assessment Results are Here ·
Save as PDFBased on your answers to the questionnaire, we've identified your business as a single service operation with a seasonal down period. You can either follow the Scalable Growth Business Model OR you can follow the Scalable Growth Business Blueprint. The Blueprint offers more detail. The Model offers a more broad overview. Take a look at the recommendations below, and choose which chart to follow.
Here's What's Included
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Your Down Season Instant Assessment Results
Recommendations
The Down Season Business
Your business model provides a single primary service that experiences a down season during the year. When the down season approaches, your company starts to close down the operations of the day-to-day service side of the business. That means you probably lay off your field crew during the down season or keep on only your top team members for strategic planning and key functions that involve the up season relaunch. When the up season arrives, you begin servicing your customers again.
Because you provide only one service, you fall into the single service operation blueprint.
Your Challenges
Cash Flow
The down season can impact a company's cash flow if cash has not been managed properly throughout the year. This area can be challenging for many businesses. During the down season, many companies support the day-to-day operations with customers' prepayments for the following season. However, those prepayments aren't the company's money until those services are delivered.
Another common issue is that prepayments are often not set up properly in the accounting system. Often, companies pay tax on prepayments because they are being received and recorded as income in the current year. Some companies even receive these funds and record them as a liability. After they record the funds, the companies spend them, counting the expenses in the current tax year. When the new year rolls around, they find that they don't have the cash flow they need to launch their season once production ramps up, and they can't claim the expenses in the new year because they already claimed them in the prior year. Meanwhile, the liability is still sitting on the balance sheet of the prior year.
Labor & Materials
Sometimes, a single service business fails to fully identify their labor burdens. As a result, their perceived labor costs are inaccurate, which affects anything they are connected to, such as pricing. Because the margins and mark-ups are not at the correct percentages for labor on any work or estimates, pricing on services and service packages is typically wrong, with "wrong" meaning "not priced to achieve maximum profit." In addition, single service businesses often don't have their margins and mark-ups on their materials at the accurate percentages.
Route Efficiency
Route set-up can also be an issue for single service operations. To maximize your profit, you must set up your routes efficiently, not only in terms of creating the route but also in terms of managing the skill level of the crew on the ground. Depending on the services provided and the customer base, some routes may require more attention to detail than others. A well-established route can bring in 20% profit or more versus a merely efficient one that brings in 15% profit on average or even creates a loss if not priced properly.