We’re reaching the end of December, and this means another 12 months are already officially in your field service business books. Remaining in the market for a whole year is already a victory, but besides profits, there are other ways to evaluate the success of your company during the last 12 months.
In this article we’ll go over a few different ways you can use to review the results of your field service business during the last year, and also spot those areas that need improvement during the coming months. So besides gathering the books for taxes, it’s time for the yearly review!
No matter what size they are, all field service business companies must do their books in order to pay taxes and abide by the law. Maybe you have a box full of paper receipts, or you already took the leap towards the digital office and are using accounting software. Whether you take care of it yourself, or prefer to hire a bookkeeper, it’s time to balance the company’s books and find out what your current position is.
“Understand your business down to the penny”, says Mark Cuban. Knowing your field service business inside out is the right way not only to balance everything up at the end of the year, but also make sure you’ll stay around for another year.
The best option is to have a so-called Balance Sheet, where you can see how well your field service business was doing when you reached end of the year. It’s a full snapshot of the company, the one that will help you identify worthy assets as well as any possible liabilities.
Ideally you should also have an Income Statement, where you can see the money you’ve made versus the money that went out. And in addition to that, you’ll also need a Cash Flow Statement – another financial document that revises all the cash that entered your field service business and how was it all spent.
Go over numbers
OK, so now you have all the important numbers related to your field service business at hand. But, how should you absorb, analyze and interpret them? How do you know if you’re really growing? Will you be able to maintain a positive trend next year?
First things first.
To begin with, check if you have fulfilled all your legal obligations. Taxes, payroll, bills… are all of them paid for? If not, maybe a long-term payment plan is a good idea for your field service business, but try not to delay payments too much. Your company should have enough cash to cover all of its expenses, and a bit more.
Second, compare your numbers to last year’s figures. Did you improve at all? Have they increased, even if only a bit? If not, well, that’s a problem. Because if you take inflation into account, earning the same amount as last year is the same as losing money. Today’s income is worth less than yesterday’s. That’s why you should at least see a small increase in your earnings year over year.
Where do you see yourself in 5 years?
Once you’ve analyzed the present state of your field service business, it’s time to think about the future. Evaluate your readiness for what is about to come. For instance, did you invest part of your income back into your company? Things like buying new equipment, launching a new marketing campaign, investing in trainings for your team…
An important part of being successful in this market is to plan for tomorrow, so reinvesting is key. From telecommunications to HVAC, including energy, security or plumbing, you need to remain the best option for your customers, so you need to make sure your equipment is revised, your vehicle looks professional and your corporate image doesn’t look outdated.
In other words, having a successful field service business is not just a question of making lots of money (although, well, that is important, too!). If you want to add another 12 months to the books of your company by the end of next year, keep an eye on profits while also reinvesting in the business, watching inflation and keeping some profits in the piggybank just in case…