Years ago when I played baseball, it was pretty simple. Hit the ball, catch the ball, throw the ball. If you did those things better than the other team, the chances are you were going to win. Google sabermetrics and you will discover that it is not simple now at all.
Batters are measured by at least eight other benchmarks besides batting average, including plate appearances, base on balls %, strike out %, batter average on balls in play, on base %, slugging percentage, weighted on base average, and weighted runs created.
Pitchers used to be measured by their won/loss record and earned run average. Now there are a dizzying array of benchmarks that go by acronyms such as FIP, BABIP, BB/9, HR/9, LOB%, GB%, HR/FB, and WAR. Who knows what all that means?
I believe in observing others and learning in the process. If this works for a fairly simple thing like baseball, does it have any application for the moving industry or other types of business. I think the answer is a resounding YES.
The current model is pack the job, load the job, haul the job. Pricing is pretty much left to whatever the market is doing, and virtually no one knows any of the sabermetrics involved and how, exactly, to price a job. And the situation is not much better in other industries. Business owners simply do not know what their costs are, and therefore how to price their services.
How many sheets of paper are used on average in a dish pack? How many rolls of tape are used in an average pack job? How long does it take, on average, to pack an average shipment? What is an average shipment? How many pounds can be loaded and unloaded per hour? What are your crews averaging? What is the cost of running your truck a mile down the road, and how do you handle fixed versus variable vehicle costs?
Who in the industry are asking these questions? Measure and count. The devil is in the details and this is not rocket science. It's time to join the baseball crowd and really dig into what is going on. Knowledge of all of this will lead to higher profits and better understanding in the entire industry. Educate your competitors. Everyone will make more.
Click on the link below to get a job costing template. Using it regularly will allow you to determine what your profitability on a particular job was, and more important, it will allow you to ultimately determine what the profitability should have been.
Oh, and what is $3,750 ÷ by 64.3%? The answer is $5,832, which is the price that would generate a 35.7% gross profit on a pack job with direct expenses of $3,750. Direct expenses and desirable gross profit are two things you should know for every line of service you provide. Do you? Sabermetrics is the answer and it is within your grasp. Start counting!
And a Happy Memorial Day to you all. We are so grateful for those that have made the ultimate sacrifice for this country.
Job costing template