5 Tips For Developing New Targets for Your Company's Growth
Growing an HVAC or plumbing company can be challenging, but you can create new growth targets by thinking of additional ways to generate revenue moving forward. As you develop new growth targets, you'll have to dig deep into the numbers. On the surface, it might make sense to look at the company's existing revenue and assess how you believe the business will naturally evolve. However, there are also steps you can take to scale the company, improve revenues, and set higher growth targets.
As you come up with these targets, it's a good idea to look at decisions you could make that could have a long-term effect on your growth. Here are five ways HVAC and plumbing companies can expand revenues, leading to more significant growth targets for the future.
1. Think about the impact of a loyalty program Loyalty programs are an excellent way for HVAC and plumbing companies to generate repeat business. Providing discounts on maintenance after a certain number of visits, for example, is a surefire way to keep customers coming back year after year when they need a service.
Determining exactly how much of an effect your loyalty program will have on your bottom line can be challenging because every business is different. You'll need to map out your current levels of repeat business and research the impact these programs have to reach a conclusion.
2. Look at your passive income streams Do you already have passive income streams like subscription-based maintenance packages? These offerings can be a great way to create greater income certainty because you can count on the money coming in every month.
Play around with your growth targets based on more significant passive income, too. It might make sense to heavily advertise these services if you find a substantial opportunity for growth based on higher subscription rates.
3. Include revenue from new services If you're thinking about adding new services for your customers, it makes sense for your growth targets to include them. For example, HVAC businesses looking to add electrical and plumbing services might expect an influx of new customers in the coming years. However, it's essential to keep in mind that growth from new services isn't guaranteed. If the market is already oversaturated, expanding in this way could hurt net revenue. You'll need to complete some market research to ensure that this type of growth is advantageous for your business.
4. Consider the influence of acquisitions Are you thinking of acquiring an existing company in the coming years? This acquisition could involve expanding your local footprint in your current industry or moving into a new service offering.
Either way, you'll need to complete some market research to ensure the acquisition will be beneficial for you moving forward. A quick and efficient investment can almost immediately increase your revenues, but there's no guarantee that it'll be overall profitable. It all depends on the acquisition cost.
You'll have to find the right company to acquire at a price that makes sense to reach your growth targets moving forward. It often helps to bring in an acquisition advisor who has expertise in your industry. An advisor will help you identify potential acquisition targets, long-term growth potential, and fit for your business.
5. Form strategic partnerships In the absence of offering new services, potentially in a different industry, it sometimes makes sense to develop strategic partnerships with other local businesses. Of course, it will take a fair amount of research to set growth targets based on this partnership, but the publicity it generates is often positive.
For example, using the electrical and plumbing services example again, it might make sense to form a partnership with a local plumber where you piggyback off each other's services.
The plumber could recommend you for any HVAC work necessary in clients' homes and vice versa. You could even develop a partnership where you book appointments for your customers directly with the plumbing company, making their lives easier.
The partnership details will require negotiation and a lot of thought, but there is room for growth there if you can find a reputable business and develop this relationship.
Taking the first steps As you set growth targets, planning your future developments helps you paint a clearer picture of your financial expectations. No matter which tips you follow while trying to maximize your business' profits, you'll want to go about the process the right way while conducting the necessary research. Using an advisor to lead you through any acquisition is also extremely important.
SF&P Advisors offers guidance to HVAC and plumbing companies that are considering mergers and acquisitions. We can help you identify potential investments, dig deep into your business' financials, ensure the deal makes sense, and negotiate the contract. Take a minute to contact SF&P Advisors today to go over your company's growth targets and potential acquisitions.