692: What’s Your Profit Per Service?
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What if the services filling your schedule are the very ones holding your business back? In this episode, we talk about why pet care business owners need to understand profit per service instead of only looking at total revenue or yearly profit. We walk through the difference between gross profit and net profit, and we explain how labor, mileage, admin time, and scheduling inefficiencies all affect what we actually keep. We also discuss how certain services, routes, and add-ons can either strengthen or weaken the business depending on how they are structured. Most importantly, we encourage pet sitters and dog walkers to think like owners and operators so we can build businesses that are sustainable, efficient, and profitable.
Main topics:
Gross profit versus net
Direct labor and costs
Scheduling and route efficiency
Service pricing and structure
Profitable growth decision-making
Main takeaway: “More clients with bad margins just equals more stress.”
Growth by itself is not the goal if the services we are offering are underpriced, inefficient, or draining our time and energy. Sometimes the answer is not adding more clients, but taking a hard look at which services are actually helping the business and which ones are quietly hurting it. When we understand profit per service, we can make better decisions, protect our team, serve our clients well, and build something that lasts. Sustainable growth starts with clarity.
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A VERY ROUGH TRANSCRIPT OF THE EPISODE
Provided by otter.ai
SUMMARY KEYWORDS
Profit per service, gross profit, net profit, direct labor cost, variable costs, service efficiency, pricing adjustments, restructuring services, client scheduling, travel time, employee training, business operations, profit margins, service radius, add-on services.
SPEAKERS
Meghan, Collin Funkhouser
Meghan 00:00
Hey, good morning, good afternoon, good evening, wherever you are. I'm Megan. I'm Collin. We are the host of pet sitter confessional, an open and honest discussion about life as a pet sitter. Thank you for joining us today. Thank you also to our sponsors, pet sitters, associates and dog co launch, and we can't forget our Patreon supporters as well. These are pet sitters and dog walkers, just like you who love the podcast have found value in it and want to see it continue. So they have gone to pet sitter confessional.com/support, to see the ways that they can help out on this episode, we are talking about something that most pet care businesses think they understand, but they usually don't, and that is profit per service. Now we're not talking about total revenue here for the month or for the year, not talking about that, not even we're talking about total profit, but which services actually make you money and which don't? This is a critical piece and a critical data metric that you need to know. You may love a particular service that you offer, and your clients may be booking it all the time, but if you aren't actually making a profit on it, if you're either breaking even or losing money, then it doesn't matter how much everybody loves it. You need to restructure the service or stop offering it all if you can't make it more profitable. When we talk about profit, the simplest level of profit is what's left after expenses. So you have money being brought in, you have expenses going out, whether that's your website, your software, text messages, whatever it is that you're paying for in your business. This also includes labor and your insurance, but everything after it's been paid for is profit. That is what's left over for this conversation. We need to be more precise, other than just what's left after expenses, there are two key areas here of profit. The first one is gross profit. This is per service. So this is your revenue from a service, minus the direct cost to deliver it. So say, for example, you offer dog walks for $25 each. You paid your employee $12 to do it, and you have payroll taxes of $2 so your gross profit on that is $11 but that's
Collin Funkhouser 02:11
not all of the story here, because we then have to look at the second layer of net profit. This is what's left after everything, the admin time that maybe you did that's not accounted for here your software. We if you're using a software, even if you're not using a software, there is cost in getting things scheduled. Maybe that is just extra admin time now that we have to account for. You also have the insurance that you are paying for on an annual basis. Yes, but that money has to come from somewhere. It doesn't just magically appear once a year in order for us to pay this bill. So we have to pull money from that with each service you then had marketing that's associated with getting that service and ongoing marketing to sustain the client, and then mileage and the time it costs to drive, or if you are actually reimbursing mileage or taking that into account for yourself, there are inefficiencies in that. If we don't plan well, most of us jump into and we get to gross profit, and we don't even get to gross profit at the per service level where we tend to stop is, I made $70,000 last year, and I know my expenses for the year, and I took home $35,000 for the year. So my that's my profit. That was my profit above what I had to pay in order to make the service happen. But what tends to happen here is we have to look at that profit at each service level, just like Megan broke down at the at the gross profit per service. Because when we do that, we get insights into all of the inefficiencies that each service carries with it. We might think that a 30 minute dog walk is the same as a 30 minute pet sit. However, when you look at the per service breakdown of those, you may find that somehow there that the pet sitting is less profitable than the dog walking. Well, you would then look and say, Okay, well, is this because the way we get into the homes is more complicated, that there's more overages on those visits because of all the complicated things that we have to do are the expectations for the clients more extreme for these so I've got more admin time for my pet sitting visits, suddenly, for all the notes and all the changes and all the back and forth communication with them and the dog walking clients don't really have that associated with them that those are the kind of things that we get to dig into when we break this down at the per service
Meghan 04:41
level well, and a lot of times we think about, okay, well, a pet taxi, or transporting the dog, or going on an adventure hike, where I have to travel 20 miles to the nearest trail, or whatever, those services are going to be less cost efficient than something where I'm just going driving to one place and then walking the dog and then driving. Driving to the next place. So there are inefficiencies in each service that we have
Collin Funkhouser 05:05
to consider, well, and not just each service, but suddenly, if we're talking about a 30 minute pet sit versus a one hour pet sit, well, well, you might think, Well, I have to pay somebody twice as much to do the one hour. Nah, but you'll get all that money. You have to drive there one time. You're not paying for travel time, you're not paying for mileage, not paying for those inefficiencies, those transition costs, those delays in traffic, and the delays in the schedule. You don't have any of that with your longer services. And so all of a sudden it's it's you can really get granular with this. That does take time, though, that does take having this broken out in a spreadsheet somewhere, and spending time to do that, because there's a real danger when we just lump everything together. It sounds good. It sounds really easy again. Tax time. Let me take what I made minus what I spent, ta, da, that's my profit. And most of us will say, Hey, we're profitable. And that feels really, really good. But there are lots of problems associated with this, unfortunately, because when you lump everything together, you hide a lot of data. You hide your loss leaders. Now, many of us don't intentionally set up a loss leader. What a loss leader is in the in like, you know, sales, and especially in, like, grocery stores and those kind of things, brick and mortar is a loss leader is an item that's on sale for sale that they know they're going to lose money on, but it attracts people into the store, and then once they're there, they're going to spend money on other things that you have there.
Meghan 06:39
I feel like the classic example is at a Mexican restaurant, when they bring chips and salsa to your table, that's clearly a lost leader. You're going to eat a ton of chips and salsa, but that's not the only thing that you're going to eat. You're also going to get a margarita or a chicken quesadilla or something else along with the chips
Collin Funkhouser 06:54
and salsa. But for what we're talking about here, you may have real services that are bringing in real money. But if we aren't categorizing them appropriately, if we aren't accounting for them in the right way, we're going to miss that they are losing money. And now, all of a sudden, I am subsidizing my non profitable services with my profitable ones, and I have no idea and what we end up doing, we're leaving money on the table there, because that's that. What I said that subsidizing that's the real danger of you have something that's genuinely profitable, and it covers over and hides the bad ones, right? So you may find that your your vacation visits are really strong, but your midday walks are barely breaking even because you may have priced them a little bit below what you thought was valuable there, or you haven't raised prices accordingly. You've kept those really cheap, or you're not offering the right length of service or whatever quality, whatever that is, you're not those might not be making money for you, but you never see it because it's blended together. And now you can say, I'm profitable, but if 30% of your business is dog walks and the other 70 is pet sitting, well suddenly you've got a 30% drag on your business, and you feel that. Why do I always feel like I'm behind the eight ball? I'm getting lots of these dog walks. I'm getting lots of this one thing, my admin costs suddenly creep up, my overhead creeps up. All of this happens, but we're not actually growing like we thought we would. We don't feel any more profitable. Well, it's because it's being hidden by your
Meghan 08:34
profitable business. And that's why we start to have this false confidence. We think, Oh, I just need more clients. Everything's great and everything's I'm doing great at my business, and I'm profitable. I'm super successful, but I just need more clients. Well, no, that's not necessarily the case, because if you're not we always say, if you're not profitable with the first visit, you're not going to be profitable with the 18th visit, or the 374th visit, you getting more clients is not going to be the answer when the real issue is you need better pricing or better structure. You need to come around to this service, make it the most efficient that it can be, and then you'll be better
Collin Funkhouser 09:13
that is one of the most dangerous parts of scaling in this industry, is if we don't have a good handle on not just a, are we profitable, but B, where is that profit being generated from? We tend to think, well, scaling will just get me out of this. Growing will make me better here. But like Megan said, growing in and of itself, doesn't make you more profitable. It makes you more money, but if your profit is only 2% per service, well, doing 1000 more services, guess what? You'll have more money in your pocket, but you'll still be 2% profitable. And most likely, you'll actually be less than that, because there tends to be a drag on profitability as you grow when you don't have those systems in place, and
Meghan 09:59
a lot of times when. Run into this when we start to offer overnights, when we also have employees, when we are no longer the ones doing the overnights, we are offering them to employees, for them to do, and we now have to charge an exorbitantly large amount of money, and we still aren't making that much. We're making, what, $10 a night off of the overnight service, and it's like that's not worth it to us. We are not that profitable. In order to have the headache of having the employee do the overnight and Oh, our mind is still now, okay? Is everything okay at that visit our you know, our mental energy is not worth the profit that we're getting out
Collin Funkhouser 10:37
of it well, and part of that comes to some scheduling inefficiencies. One of the issues with doing overnights is I'm locking one person away for multiple hours at a time, and they can't do other things. So I can't flex them into other services. I can't increase my services per hour, which would help me also. I limit my ability to use them after they hit certain amounts of overtime and all of that stuff. But we tend to have these services that look really profitable on paper. Hey, I've priced them well. They look fantastic, but, but because of the kind of service that they are, they can destroy our daily operations. A great one of this are pet taxis. And here's the reason why it sounds great. Hey, I'm going to charge $45 for a pet taxi one way, but I have to pay somebody to be there. Oh, the vet wasn't ready. They're delayed. They need to wait 15 or 20 minutes to get the dog out to you. Okay, well now you're 15 or 20 minutes behind, and you're having to push other visits out, and now you're having to pay for that time for that employee to be there. And traffic was bad, and they get delayed, delayed, delayed, delayed. Operationally, it becomes a big nightmare. And then if you have to go back the other way, right? Oh, the client wasn't home to help you get the dog in there, or the cat couldn't get in the carrier for you to take them to the groomer. All of these delays set us back. And when we don't account for those, when we're not pricing for the problems, suddenly the profit goes down, vanishes entirely, and we've got this really great looking service, but because operationally, it's a headache and a nightmare, and the oversight on that and the admin is just intense, it really sucks all of that away When we lump our profit together. It masks the reality of our business. Lumping tends to hide all of these things that in these problems out there, there's inefficiencies there, all of those problems get masked because, hey, I get one number and I'm fine. When we look for clarity. We always want to have clarity in our business, especially around our numbers and our operations. It is something that Megan and I have every single day. Have more and more appreciation for, is just the fact that the kind of businesses that we run, dog walking, pet sitting, cat care, all that it is so operations heavy, and if we don't act like an operations business, we will not be operating for long so we won't have clarity, because that will, in and of itself, force decisions to be made. It will make us look at our business, look how we're operating, and make us change and address those inefficiencies,
Meghan 13:23
and now a word from our friends at pet sitters associates. As a pet sitter, you know how much trust goes into caring for someone's furry family member, but who's got your back for over 25 years, pet sitters associates have been helping pet care pros like you with affordable, flexible insurance coverage, whether you're walking dogs, pet sitting or just starting out. They make it easy to protect your business. Get a free quote today at petsit llc.com as a listener, you get $10 off your membership when you use code confessional at checkout. That's petsit llc.com because your peace of mind is part of great pet care. When we talk about how to actually calculate profit per service, it does not need to be complicated. Nope. It just needs to be consistent between your services. So step one is list all of your services out on a piece of paper or your phone or wherever you make notes. So for example, you have a 20 minute visit, 30 minute visit, 60 minute visit. Then you outline your dog walks, 30 minute dog walk, 45 minute dog walk, 60 minute dog walk. You've got holiday visits where you charge more for those, whether it's plus $5 or time and a half or whatever it is. Then you've got your add ons. Is it nail trims? Is it a bath? Is it before and
Collin Funkhouser 14:35
after hours? Fees that would you're charging here, or if you have an out of service, out of your service, typical service radius fee that you apply to this I know I see a lot of people who are currently offering or trying to charge an extra fuel charge because of the high gas prices. So include this here and kind of build what you're doing here is you're building the options that clients can book. And this is one of the reasons why. Megan and I are so big on keeping our services as simple as possible, because when you start mixing and matching here, suddenly the number of options becomes almost infinite and very overwhelming. So put together all of your service types, and after you
Meghan 15:15
do that, then you want to identify your revenue per service. So this is pretty simple. What do you charge for the 45 minute dog walk or the pet taxi or the nail trim? Just write it down next to it. Not that hard to do. Step three is then you want to calculate your direct labor cost. This is the big one here. It includes your hourly rate, your payroll taxes, your workers comp you want to convert to cost per visit, not per hour. And this
Collin Funkhouser 15:45
is a little difficult because, well, I guess it depends on how you are currently paying your staff, or how you are currently accounting this for yourself. Most of us will already have a cost per visit in mind, especially whenever we are solo, it's us doing out there, maybe us and one friend or somebody helping us. We have something we are paying them. We know many business owners who continue to pay a per service rate for what's going on, for that to be conducted. However, if you are doing an hourly rate, which Megan and I really do think that is a really great way to keep things consistent. It helps people understand exactly what's going on, keeps math easy for your employees, helps you attract people. But that's that's a separate topic here. Make sure that you're converting this per visit, and the way you do this is you simply go, Okay, how much for 30 minutes does it cost me to have somebody there? And if that somebody is, you make sure you're calculating what you want, your take home rate, your take home pay to actually be and that's all what that's all we're doing here. We're saying for 30 minutes. What does that actually cost me? Not per hour per visit, because what we're going to do then is, then you're able to say, how many visits am I doing in a day, and then how much does am I bringing in from those in addition to how much does it is it actually costing me? But we can't stop there, just like we said earlier, we've got to go one level deeper here. We've got to add our variable costs here. These are things that are not getting, not doing the work, but they are tied to that visit. Obviously, we don't have the teleporters like they did in Star Trek, so we can't just magically appear or teleport and beam ourselves into our clients' homes. I'm so ready for that, though, that would be fantastic. So we've got to make sure that we are taking into account mileage, or at least your estimated cost per mile. If you're doing a reimbursement, make sure you have that there. What's your average drive distance from one visit to the next? Then what supplies are you consuming for that visit? What treats are you having to supply there? What poop bags are you having there? All of those things come from somewhere, and if you're using them in a visit, that's a consumable that that visit takes up. You have to associate those costs there. Then your your time inefficiencies have to also go in here as well those drive gaps. Are you paying for that drive time? Are you accounting that for yourself? We can't just do 15 one hour visits from 12 to one that does that's not how time works. Also, do you have the admin costs associated with this visit? How much time did it take you to get that on the schedule? How much time does it take you to get the notes taken care of for this? How much back and forth time did you have with the client to get this taken care of? How much back and forth did you have with your employees if they were asking you questions or on the team meeting for this, all of that we need to account for. And here's the thing, when you take it down to the per visit level, you're going to find that a lot of this admin stuff, these other things, it's minutes, it's minutes, not hours, it's minutes, but it all adds up.
Meghan 18:59
And then after you've calculated your direct labor costs and added in your variable costs you want to calculate your gross profit per service so this is your service price, any labor that you have and any variable costs. So service price minus the labor minus the variable cost that we just talked about, and that is your gross profit per visit.
Collin Funkhouser 19:19
And so what you have here is you have your like Megan said, Your gross profit per visit for each service that you provide. So, of your 30 minute dog walking, what's your gross profit per visit for that of your 60 minute dog walking, what's your gross profit for that visit? For one visit, for your 15 minute pet sitting, potty break, whatever midday thing. What's your gross profit per visit for that? Now you can start to build out that chart and see the difference between each one of these. And what we can do now is, if we want to step this up a little bit, take it a little bit further, we can there's a really great question here, how. Much profit per hour does this service produce? Now why did we go up to an hour? Because I'm trying to standardize here. We offer, some people may offer 1520, 3045, 60, hour and a half, four, hour whatever this there's all sorts of these visits and these visit length differences out there. We've got to standardize it somehow. So let's just make it per hour. So if I have a 30 minute visit it to understand how much profit per hour I have, I'm just going to multiply that by two, right? Here's how that works, because a $15 profit that takes 90 minutes is worse than a $10 profit that only takes 20 minutes. You can really start to see where these efficiencies are and where you can lean into we can start to go, oh, man, I can make real decisions. Now, instead of me trying to bump up these 90 minute adventure hikes, I'm only making $15 profit on a 90 minute service, and I'm limited by the number of those that I can have in any given day. When I look at my 20 minute service, I'm making a $10 profit. That's a 50% profit margin on that service. And guess how many 20 minutes you can fit within an hour, compared to a 90 minute a whole lot more. That's where real efficiencies come in, and real strong decisions can make that really impact your
Meghan 21:24
bottom line. Calculating this may not sound very exciting, but there are real world implications for this. When you do this, you'll find that your cheapest services hurt you. So if you have a lot of short visits, they might often have tight margins, and they're highly sensitive to travel time.
Collin Funkhouser 21:43
You are spending more time driving to the short visit than you are actually spending in the visit. Travel time is dead time when it comes to making money in our kind of business. And so whenever I can get to the next service, I'm actually making money in my business. So what do we do there? Well, maybe I need to tighten in my service radius and say no to those clients. Oh, hey, my 20 minutes are my most profitable but when I'm driving 20 minutes to get to a 20 minute visit, that that really kills me here. So I need to shorten this and try and have five minute drive times. So that changes my marketing, changes my service rates, changes what kind of clients I'm
Meghan 22:20
ready to serve. Now, of course, there are people who are going to argue with you, saying, Well, I can actually make client phone calls. I can respond to clients when I'm in my car driving to the next client. Now is that the best use of that time? No, probably not, because you need to be mentally preparing for what you're about to walk into. And you're probably you need to be focusing on the road rather than talking to a client on the phone. But it can be done, but you need to be doing other things.
Collin Funkhouser 22:47
You should right on the other side of here, you may find that your longer services tend to be more profitable depending on your pay structure. If you're paying people to do these and you're paying an hourly rate, this is another way reason why this is so beneficial to you, because it helps you control the control the labor costs that are makes it independent of the length of service that that person is providing. They are paid the same rate per hour for a 20 minute as they are an hour and a half. However, if you pay per piece, what tends to happen is the pay rate per service inflates and gets larger the longer the visit is, just because that's how our brains work, and that's how we think math is supposed to work, and we want to make sure that we're doing right by the employee there. But what we what we look at here, is, okay, my longer services, I'm controlling my labor costs more because I'm paying per hour. So my longer services are actually more profitable, even if they feel harder to sell, even if I can fit fewer of those in my day, it's actually worth it for me. In the end, as a business to be providing those, we also
Meghan 23:50
have to take into account certain areas or routes that are less profitable than others. So you think about city driving that is a major toll, not only on your car, but also on time, stoplight after stoplight it's a wreck. Versus going on the highway, I can get there faster. It's going to take me more miles to get there, but potentially less time. Geography matters more than a lot of us think. We also have to consider add ons that can be extremely high margin if you charge for administering medication, this is a good one. Also, if you're going to pick up a key, you have to drive to get there and then drive home. But the time you spend there is very minimal. And you can charge a lot for this. If you provide your own treats or Kongs or puzzle mats or whatever else it is, you can charge is pretty significant portion for this, and it doesn't take a lot of extra effort.
Collin Funkhouser 24:43
That's the key here. Add Ons like this are additional revenue without scaling additional cost to produce that and actually provide that. This is why they are so powerful. Marginally, if you look at them from a total dollar perspective, a $1 add on treat or. And $1 add on enrichment. Thing doesn't look like a lot when the service itself is $35 already. However, the cost to provide that is way lower than that $35 walk. And that's where that real power comes from well,
Meghan 25:15
and that's also why daycares and boardings love this so much of Oh, you want your dog to participate in the Thanksgiving meal. Okay? Well, for a $5 up charge, we'll provide green beans and potatoes and whatever else you can do. Kind of the same thing. Now, a lot of us don't like to nickel and dime clients, which can this is what it kind of feels like, but it is super successful in the boarding and daycare space, so it is something to at least consider. And now a word from Michelle with dog co if you're ready
Michelle K. 25:43
to take your pet care business to the next level, then I want you in the room at the dog co Business Summit, October 2 through the fourth in Winston Salem, North Carolina. We have brought together the very best speakers we could possibly find, and we are getting the best companies in the room to help give you the path to grow and scale your pet care business. Go to dog co summit.com
Meghan 26:06
to learn more. We've done the calculations. We've talked about why it's important. What do you do with this information now? Because this is where most people stop. They say, Okay, well, this service isn't as profitable as the next service, but whatever, I like it, or my clients always book it, so it's okay. I don't want to change it, but we shouldn't do that. We need to use this information. The first way we could do that is to adjust our pricing. If a service is weak, we can raise our price. That's a pretty simple, obvious answer. Now it can be heartbreaking. Sometimes we don't want to do it, but if we're not as profitable as we need to be to pay our own bills, it's something that we need to do. We could also consider restructuring it. How can you make it more profitable? How can you make it better if you're doing an adventure hike and you always use the trail that's 20 minutes away, well, is there a better trail that's only 10
Collin Funkhouser 27:00
minutes away. Or you limit when they can book, how they can book where they can be scheduled, if you are allowing a lot of really certain services to be booked in times where they can't be paired with anything, everything standalone and way out there, all by itself, that's extra costly because you don't, you aren't optimizing for those routes. And so maybe you limit, you restructure how that service can actually
Meghan 27:23
be be done. You may also consider setting minimums, so no single 20 minute visit in a zone. That's kind of what you just talked about. Of we don't want this short service way out here where I have to pay an employee an entire hour to just get out for 15 or 20 minutes. They don't. They're not going to want to do that. And I don't want to have to do that either, because it's definitely not profitable, and I may actually be losing money on that service. If you are looking to restructure these think about optimizing your schedule so cluster visits to reduce drive time. Can you get two employees out there to do the work of really one employee, but because you're splitting them up, you can reduce that drive time between the two of them. Instead of one person doing four visits, you now can have two people doing two each, and they're actually closer together. So you're going to reduce that drive time well.
Collin Funkhouser 28:13
And this is where you can also go to your clients. Maybe you have a cluster of visits that's scheduled between 12 and two, and then you have one client who wants a four o'clock? Can you go to that four o'clock and talk to them about moving to a three? Can you talk to those 12 to two clients and talk to about them moving a little bit later as well? So I'm joining them together. I'm able to cluster them. Maybe, if I have clients who are within five minutes from one another, but they want different services, service times throughout the day. Can I talk to them and suggest different times for my walk to make it easier on me, to route plan, or maybe I just have to go and promote and market myself to that service area. Hey, everybody's you know, I've got this client or this client here. There's some inefficiencies here. The denser I can make my services, the denser I can make my clients within a certain service area, the more efficiencies I will have with dry time, because suddenly, statistically, it's more likely that somebody within this at a high density, at a high rate of booking, are going to fall so that I can get them paired together. When Megan, when we have a busy holiday time, all of a sudden all of our clients from within our service area are coming out and booking us, and suddenly our service, our drive times, go from 15 minutes to like five minutes. And it's amazing, and it's just because everybody's booking at the same time. And then, yes, we are able to optimize, because I can get multiple employees out in the field at the same time, and instead of trying to stretch one person going way, long I can make them denser, closer together, and really hyper optimize that route for all of those efficiencies.
Meghan 29:46
However you do this, you want to make sure that you promote your best services, the ones that are actually profitable market those, those are what you want to be selling. You don't want to be selling things that are actually losing you money or making you very. Little margin. Don't focus on what is popular, what most clients book. Of course, we want to keep our clients happy. We don't want to lose them at the same time. If you're offering a 15 minute service that you're barely scraping by on, you can't be you're not going to be here for the long haul with that one so you need to cut down or limit what is available, and then whatever is better for your company market that
Collin Funkhouser 30:25
Well, you mentioned sometimes you're just going to have to eliminate your bad services, your least profitable ones, the ones that are sucking out the money, because once you go through this, Hey, can I optimize in some way? Can I restructure this in some way? Can I change how it's booked when it's book? Can I change the length? Can I increase the price? Can I decrease the cost around this in some capacity? Can I do that? And if not, we have to get to this point. And this is the real this is the hardest one, but we have to recognize that sometimes a service doesn't fit our model. Sometimes that service that we really want to offer doesn't fit within our beautiful nine to five or our multi you know, our all the day kind of vet sitting thing. It just doesn't fit because the hours that we're operating.
Meghan 31:08
And that could be because we wanted to just throw a service out there and see if it worked, or a service time we didn't offer a 45 minute before, but now we are or didn't offer a 15 minute potty break, and now we are but realizing the implication of what we just kind of threw out there on the wall and saw if it stuck, is, oh, people loved this, but it's not making me any money. And that's the whole point. I'm not a charity here. I do want to serve people, but I also have bills to pay, and
Collin Funkhouser 31:39
the other, another lever that you can pull in this process is to make sure that you're training your employees around efficiency, that that old that is an aspect of their job. If you have employees, make sure you're having this discussion around them, and it can be hard to have, because it may sound like that. All I'm worried about is hitting time and blah, blah, blah, and we're just worried. We're worried there are a lot of benefits to being efficient. It is kind to your other clients. It keeps the schedule on track and make sure nothing gets delayed.
Meghan 32:09
Well, and you talk about kind of being cold of well, when we talk about GPS route tracking, we are talking about the least amount of time. You know, when Google pulls up a route. There's 323, sometimes four routes that it will take you. And we always, we tell our employees, we choose the one that is the least amount of time. We are not sending you over to Timbuktu and around. When you go to calculate your mileage, it is the one that's the least amount.
Collin Funkhouser 32:37
And you have to train people for that sometimes, because they may have a route that they may like the best, but it adds three or four minutes. And again, that might not sound like a long time, and it's not, but it adds up a lot. It also takes into account where we need to make sure we're giving them a good flow of visits, that it makes sense, that we're not backtracking, going from one to the other, and we're working with them on their report, writing the report speed? Are they spending 15 minutes to craft the message? Is that necessary? Do we have that luxury? Can I trim this down? Trim this back? So set some efficiency goals with your employees. Say what percent over it on visits is okay and acceptable? Do we expect to happen? Because it's going to happen. Obviously, there's going to be a mess. Something's going to come up, but what do we think is reasonable? And then it's work and train to be under that consistently, because profit, although it is as it's all about dollars and cents, it's not just about pricing. It's about execution, it's about operations. And again, back to what I said earlier. We have to start thinking about our businesses as operations. That's where the real power lies.
Meghan 33:48
It is all about that mindset shift. We have to change how we think about things. We have to stop asking, How do I get more clients? Then we need to start asking, How do I make each service better? And this isn't just better. Of, oh, I need to pet the dog more, or I need to find a new route so it can sniff more. No, we need to be thinking as the CEO, as the business owner, with our with our CFO hat on, of how do we make this more profitable? Not because we're trying to be greedy, not because we're trying to stick it to the man, but we do have bills to pay, and especially if we have employees, we have their bills to pay too. We have to think about their food on the table and how the choices that we make impact them,
Collin Funkhouser 34:32
because the less profit we have in our business, the less ability we have to reinvest in the things that are
Meghan 34:36
gonna make our business better. Yeah, do your employees like gifts during the Christmas time, or a holiday bonus, or team get togethers, or free food on some days, or whatever the perks, or a cell phone reimbursement, or a gym membership, Costco, whatever they enjoy, whatever you provide that only comes from having extra money from these services or
Collin Funkhouser 34:59
just training. New gear, replacement gear, all those safety things. When our profit margins shrink, we businesses cut corners. They cut out the safety, they cut out the concern, they cut out the high quality, because they just can't afford it. We don't want that. Remember that more clients with bad margins just equals more stress. I'll say that again, more clients with bad margins just equals more stress. What we want, what we think is a better way to run a business is we need to have better margins with fewer clients so we have more control and we can do the things in our business that actually serve our clients and take care of our team and us as well. That's where we start approaching and getting to that balance in our business well.
Meghan 35:48
And even if you don't have employees, you don't want to be going from the northwest corner to the southwest corner back to up and down and all around. The efficiency is don't just extend to our employees. They extend to us as well. The more that we are backtracking, the more that we have inefficiencies and not a lot of profit, the more burned out we're going to be because we're not able to enjoy the things that we want, or go do the things that we want. We need to have a life too. Profit per service is one of the clearest ways to understand our businesses. It really removes that guesswork. We no longer have to wonder, are we going to be able to pay our bills next month? It forces that honesty of, are we being the most efficient in our business? Is there something we need to cut out, or is there something we need to lean more into? It really gives us that leverage to make the proper decisions that we need to. We hope this episode has been helpful to you, and if it has, please share with a dog walker or pet sitter friend. We would also like to thank our sponsors, pet sitters, associates and dog coat launch. We will talk with you next time bye.
