How to track numbers to ensure profits

by Kevin Comerford, HVAC contractor IF YOU WENT to work one day and faced a $50,000 shortfall, would you know in advance it was coming, or would it hit you like a bolt out of the blue? For the life of your business, how do you avoid unwelcome surprises, improve performance and increase profitability? As the owner and president of Service Champions, in San Ramon, Calif., I know exactly where weve been,

by Kevin Comerford, HVAC contractor

IF YOU WENT to work one day and faced a $50,000 shortfall, would you know in advance it was coming, or would it hit you like a bolt out of the blue?

For the life of your business, how do you avoid unwelcome surprises, improve performance and increase profitability?

As the owner and president of Service Champions, in San Ramon, Calif., I know exactly where weve been, where we are today and where were going. I know what our financial goals are, and I know exactly how close we are to meeting them.

You can too. Here's the system I use and why I use it. You can use parts of this system for yourself and change it to fit your needs.

First, I keep a close eye on our sales and performance numbers. I look at those numbers every single day.

Some business owners judge success by looking at the balance of their checking accounts, or by counting empty air conditioning boxes in the back of their shop.

Most people have no idea how their business is doing. I relate it to a group of people playing basketball. They're running up and down the court, but no one is keeping score. There's lots of action, but they dont know if theyre winning or losing.

Every day, my office staff prepares a five-to six-page summary in Microsoft Excel that gives me a snapshot of our sales and performance numbers. When I need to drill down deeper into the numbers, I refer to a lengthier report that's attached to the summary.

These reports are the scorecard. If we're losing, we have to react. If we're winning, it helps us build confidence, set higher goals, achieve more and pay bonuses. It encourages us to stay sharp. By looking at the summary, I know the following:

  • How much Service Champions is over or under its month-to-date sales goal, by dollars and percent;
  • Sales and leads by month and year, compared to the companys goals, and the previous day's sales and installations, by each department and the company total;
  • Monthly and year-to-date leads and sales closed, by sales representative;
  • Dollar amount installed each month, by installation crew;
  • Dollar amount each salesperson sold for the month and dollar amount each salesperson had installed for the month;
  • Customers scheduled for installation, date and value of each installation and the status of the job; and
  • Maintenance agreements sold and hourly revenue collected, by technician.

It takes accountability and a sense of urgency to build and maintain a successful business.


It takes two things to build and maintain a successful business accountability and a sense of urgency. But if you don't track your numbers, you cant hold your employees and organization accountable for their performance. And you can't react quickly if you dont even know youre not meeting your expectations.

Use numbers to find red flags
When the report reaches my desk, I start 30,000 ft. off the ground and drill down. If I see a problem at one level, I look deeper until I find the cause.

Here's what I look at, from top to bottom:

  1. Month-to-date revenue compared to goal. If were below our goal, I look at our sales leads and the number of service and maintenance calls.
  2. If we have enough service and maintenance calls, I review our overall closing ratios. I expect 40% of our calls to turn into a sale or repair, and I expect our maintenance technicians to convert 30% of all billable calls to maintenance agreements. I also look at the cost of our average invoice. Does it meet minimum expectations?
  3. If our closing ratios are lower than we expect, I review the track record of each technician. My longer report details the performance of each technician in the categories of service, maintenance and sales.

Once we determine what, or who, is hurting our business, we quickly intervene. If we're low on leads, we spend more money on marketing. If our technicians aren't selling enough maintenance agreements, we teach service and maintenance techs how to improve their sales.

If a sales representative or technician isn't meeting expectations, we do all we can to help him, or its time for him to look for another job.

Start with these indicators
If you're overwhelmed with the idea of keeping track of all these numbers, start with a shorter version and work toward a more comprehensive report. Heres a simple way to start your daily reporting process:

Sales. Keep track of your sales appointments, the number of sales closed and the total dollar amount of installed products. Tell your sales representatives what you expect.

Installations. Track how many days it takes your installation department to install a system and how much you bring in. I expect my crews to install replacement systems in one day and each crew to bring in at least $4,000 a day. Your business may be different.

Service calls. Look at how many service calls you run each day and how much each invoice generates to make sure youre turning a profit.

Collections. You really shouldnt have any. Make sure your technicians collect payment after residential service is performed and before they leave the clients home. No exceptions!

There's no wrong way to use this report. The only mistake you can make is to generate the report and never review it. Then youre wasting the time and energy of your employees. And you're not benefiting your business one bit.

Kevin Comerford adapted the first page of his report from a report supplied by Richie Drew, general manager of One Hour Heating & Air Conditioning in Myrtle Beach, S.C. Comerford developed the remaining pages himself. If youd like more information on how Service Champions uses spreadsheets to track its performance, contact Comerford at kcomerford@ servicechampions.net