ARE NON-BILLABLE HOURS COSTING YOU?Improving systems and efficiency can be more profitable than winning new customers.
Saving Minutes per Day Increases Margin
A service business client paid their staff an average rate of $16.50 per hour, and had an average billed hourly rate of $41 per hour.
During the month studied, service technicians worked 1120 total hours and 728 billable hours, resulting in a labor efficiency of 65%.
We modeled the net profit results from 3 labor efficiency rates: 60%, 65%, and 70%.
Increasing efficiency from 65% to 70% increased net profit margin from 16.3% to 20.6%, for a monthly profit increase of $1,300.
In this case, this improvement meant reducing only 24 minutes per day of non-billable time per technician.
Calculating labor efficiency is impossible without accurate KPI tracking.
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HOW DO WE HELP?
questions we answer
- Do you have employees stealing time or not doing what you asked?
- Are some of your employees more efficient than others, and how can you monitor?
- How much time can be saved by automating tedious daily, weekly, and monthly tasks?
- If you improve efficiency, how much more can you afford to pay, and what types of applicants would that attract?
how do we do it?
- We integrate your marketing data, payroll data, and customer data.
- Building systems removes tedious and expensive manual tasks from your daily routine, improving efficiency and saving money.
- Our custom dashboards make it easy to know the easiest metrics to focus on to improve margin to prepare for raises.
- We connect time clocks to service logs to automatically calculate efficiency.
Labor efficiency measures the amount of paid time used for serving customers, not driving, administrative work, sales, or preparing for service. Increasing efficiency increases profitability.
Billable hours/Total hours paid
Net Profit Margin
Percentage of total revenue not used for expenses. Increasing labor efficiency increases net profit margin.
Total profit/Total revenue
Average billed Hourly rate
The average rate you charge customers while perfoming a service.