By Tom Grandy
You know the drill. The tech shows up 10-15 minutes before the official 7:00 AM start time. There is coffee already made by some mysterious person that arrived significantly earlier. The tech pours a cup and chats with the other techs about what took place the night before. Before long it’s 7:15 AM and the supervisor is encouraging the techs to finish their coffee and roll out towards that first call of the day.
Hey, it’s only fifteen minutes, no big deal, right? Wrong! Have you ever thought about what that 15 minutes actually costs the company?
Cost of Non-Billable Time
To keep it simple, let’s assume the tech is making $20.00/hour. With matching taxes and a few basic benefits, the real cost is probably $25.00/hour but we will stick with $20.00. That means our free cup of coffee cost the company $5.00. Over the course of the year that free cup of coffee cost the company $1,300 ($5.00/day X 260 days per year = $1,300). Significant, but not huge.
Lost revenue is the money that could (and should) have come in during those 15-minute morning jam sessions. Let’s assume the hourly rate charged by the company is only $125/hour. The average service tech sells $20,000 dollars in parts per year with an average markup of 100% producing gross parts sales of $40,000 per year. That means parts sales are $40/billable hour ($40,000 / 1000 billable hours per tech per year). Translated, that means the service tech should be bringing in $165 for every hour he or she bills out.
The cost of lost revenue for the time the tech should have billed out for those 15 minutes in the morning but didn’t, is $41.25 ($165 X .25 hours = $41.25).
All totaled, that 15-minute free cup of coffee cost the company $46.25/day or a whopping $12,025 per year. Ouch! It’s no wonder your supervisor wants you finished with your coffee, truck stocked and ready to roll at 7:00 AM when you go on the clock.
Lead by example. Give some serious thought to coming in a bit earlier in the morning so you can relax while drinking your coffee and be ready to roll at 7:00 AM. Others will follow your lead and I promise you your manager will notice and appreciate it.