By Paul MacDonald
Every economist is struggling with that question, just as you and I are, too. The timing of the reopening and the strength of the expansion will depend on business and consumer behavior, government finances, and a global recovery. There are a lot of variables, but not a lot of certainty.
When the crisis hit in March the stock market, business, travel, schools, and all social events came to a screeching halt. If you were like me, you quickly cut all expenses that were not essential to preserve cash flow, and in many cases you laid off employees. Fortunately, appliance sales and repairs were deemed essential services and could continue operations in most states. But just because appliances were deemed essential, not all customers wanted service people coming into their homes for fear of their bringing the virus with them. Appliance repair business took a significant hit, and in some cases as much as a 75% decrease in service demand hit several markets.
During this time of slower demand, it will be good to work on preparing your business for when things turn around, to ensure that you’ll be ready. For example, now would be a good time to decide if you really need certain expenses and staff that you may have laid off.
It’s an excellent time to evaluate your online presence, since customers might be weary of going into businesses when the economy restarts. You’ll need to be findable online more than ever. Social distancing may be the norm for years to come, until a vaccine can be developed. Can your customers find you online easily? Can they book a service call online 24/7? Do you have good reviews online? These will be crucial to your future business, and if your online presence is weak you’ll need to fix it fast.
Regarding the trillions in stimulus dollars that the federal government is spending, much of it will have to be repaid in one form or another. Be it by payback or raised taxes, you can bet it’s going to cost us all more. More to travel, more to eat out, more to buy groceries (already), and yes, the price of gas will go back up.
Virtually every service will cost more, to help repay all the money that has been borrowed and or pumped into the economy to stave off a recession. It only makes sense that your service call rates need to go up as well.
You can’t possibly continue with the service rates you charged last year, as all of your operating costs will increase, including the food on your table. Consumers will be feeling the increases across the board in everything they purchase. Don’t miss this opportunity to raise your rates.
How much? To raise your service rates enough to deliver a profit, you’ll need to understand your cost of doing business and set your rates based on the new costs. Fortunately, United Appliance Service Association offers its members a free cost of doing business calculator that can help you establish what your new rates should be, based on your business’s costs and efficiency (visit www.UnitedServicers.com). Now is not the time to charge what others are charging, but to understand how much it costs you to run service calls, and your business in general. We should all be charging professional flat rates, and not working on time and materials. Check out the Blue Book Flat Rate Repair Guide from MyPartsHelp.com. It’s worth it!
UASA membership has many resources to address these issues. You are not alone – we’re all in this together, and UASA is here to help you. The economy will turn, and we will survive this crisis.