How To Quickly Set Up A Service Department And Create “Recession Proof”, High-Margin, Recurring Revenue…

There’s nothing more detrimental to the growth of your contracting business and the quality of your personal life than having unpredictable revenue streams. 

Because you can be crushing it with sales for weeks, and then soon after, be trying to break even for the month…

You are going to be constantly on edge about money and the health of your contracting business.

And this uncertainty makes it harder to hold your ground during negotiations for new projects, which can really impact your profit margins.

Unpredictable revenue also makes it harder to confidently pull the trigger on those big investments needed to scale your business to the next level – which means that this can directly stunt the growth of your company.

And with looming uncertain economic times and material shortages – all of these problems are  only going to get worse.

Which is why there has never been a better time to set up a service department in your contracting business.

And I wanted to get service expert Bryan Mitchell on this episode of the podcast to talk about how starting a service department can create predictable recurring revenue at a high margin in your business…

And how you can quickly and easily start a service department with resources you already have, meaning that you don’t need to purchase any specialized equipment, hire any new staff, or generate a single new lead. 

Why Service Is The “Secret Sauce” for 8 Figure Roofing Companies 

In this episode, Ryan says that most top contractors he knows see service work as the “tip of the spear” and the “secret sauce” that drives their 8 figure revenues.

So, what makes service such an effective strategy?

The most important reason is that it immediately creates predictable, high margin, recurring revenue.

On average, Bryan’s clients will lock in 3-5 service jobs per year with each new contract that they close.

And because in Bryan’s experience, a commercial reroofing project costs $400,000 on average… 

By doing this service work to extend the life of the roof and push back this large expense by 5, 10, or even 15 years…

While proactively preventing the expense of more serious damage to the roof, water damage to expensive equipment inside the building or the cost of tenants moving out…

You’re going to get less pushback on your pricing for service work, which is just one of the reasons why Bryan and his students are able to achieve high margins of 60%, 70%, and even 80% on each job. 

And because you are saving the building owner a tremendous amount of money with this work, it’s not only going to be incredibly easy to sell a service contract for that first roof…

(Which becomes even easier during uncertain economic times and recessions)…

But they are probably going to want you on all of their roofs and start recommending you to other building owners they know too.

There’s huge scope for this opportunity because, as Bryan reveals, over 80% of reroofing work is done prematurely and many manufacturer’s warranties are contingent on the fact that ongoing maintenance work was regularly carried out and documented.

But here’s the truly astonishing thing about growing your service department:

You’d expect that by carrying out work that actively delays reroofing projects for your own clients, you might hurt your own construction revenue.

But in fact, the exact opposite happens and here’s why:

Firstly, by offering a highly valuable service, which creates a relationship built on trust with each building owner… 

When the time eventually comes for this roof to be restored or replaced… 

Instead of having to outbid other contractors to get this work, thanks to your pre-existing relationship your chances of securing the construction project at a favorable price are much, much higher. 

And increased margins on your construction projects is just the start…

Because service gives you access to far more opportunities for new construction work too.

That’s because these service contracts essentially sell themselves.

Allowing Bryan’s team and students to close new deals with a 60-70% closing rate, even if they aren’t amazing sales people.

This means that they can rapidly expand their network of relationships with building owners, exposing themselves to far more opportunities for referral business and construction work on those roofs.

And when you are carrying out those 3-5 service jobs each year, you’re going to know exactly when those larger jobs need to be done, turning every service call out into a potential sales meeting with the building owner.

Plus, once you close a service contract, you have effectively “taken that roof off the street” as Bryan puts it, ensuring that you are the only person who is going to be working on that roof for the next 20 years or more.

So, this is how the strategy works, but what real-world results has this generated?

The Key To Growing Best Roofing’s Revenue By 552% In 9 Years

A growing service department was the key to Bryan’s success while working at Best Roofing, for three key reasons.

The first was that each service truck could be turned into a “billboard on wheels” for the company and by being parked in a highly visible location during each service job, this became a huge source of new leads.

And as the service department grew and they added more trucks, Best Roofing started to massively increase their visibility in the local community.

The second reason was that these “easy to close” service deals rapidly expanded their network of relationships with building owners in the community… 

Giving them access to new construction jobs at higher margins without needing to outbid other contractors to get them.

Finally, each new reroofing project could now have service and ongoing maintenance work built into the back of it. 

So, in essence, their service department grew their construction revenue and vice versa.

This created a self-perpetuating cycle of growth within the company, allowing Best Roofing to quickly grow their revenue from 8.5 million to 47 million in just 9 years.

And creating a predictable recurring revenue of 3-7 million per year during this time (which eventually became 11 million per year) allowed Best Roofing to confidently reinvest to grow and expand their operations. 

Why Starting A Service Department Is Much Easier Than You Think

One of the amazing things about service work is that there is virtually zero competition.

Which makes closing new service deals absurdly easy.

So, why are almost no contractors taking full advantage of this opportunity in the market?

In both Ryan and Byran’s experience, most contractors never pull the trigger on this opportunity due to several false and limiting beliefs about service.

Here are some of the most common: 

• “There is not enough money in repair work”
  (despite the fact that Bryan Mitchell was able to generate 11 million per year of recurring service revenue with 62% margins)
• “I’ll have to make large investments into specialized service trucks”
  (even though they can easily repurpose one or more of their existing trucks)
  
• “I have no idea where to find or hire quality service technicians”
  (yet they could retrain staff they already have on their payroll to handle service)

Once you find a way to work around these minor obstacles…

You’ll realize how quickly you can start generating predictable high-margin revenue…

Because if you already have an established roofing business, not only do you have all of the resources needed to get started with service today…

But if you simply look at the list of clients you’ve worked with over the years, you’ll see a list of qualified service leads which you can start closing right away.

That being said, there is one barrier to entry with this opportunity that is very real. 

What Actually Makes A Service Department Difficult To Implement 

(and how to easily solve this)

Although you already have everything you need to start growing your service department…

Bryan states that there is one very real obstacle to doing this:

Time.

Because while you can figure out ways to get around those other hurdles, it can take some time to figure out exactly how and then create the processes needed to do it. 

Of course, it would absolutely be worth investing this time because you’ll be able to create rapid scalable growth while ensuring predictable high-margin revenue each month in your business.

But what happens if you just don’t physically have this time available because you’re already trying to manage too many things inside of your business?

Well, if that’s the case for you, then here’s some amazing news.

The vast majority of the time investment is required to figure out and create these systems and processes…

But once you already have these into place, you can implement these strategies and grow your service department surprisingly quickly.

(and in a moment I’ll show you where to get some of these for free)

In fact, Bryan has found that a contractor who is completely new to service can see almost immediate results, when they are given a proven “done for you” system, process or tool. 

For example, when they are given:

• A pricing sheet for service jobs, they can almost instantly create accurate proposals within 24 hours (instead of it taking days or weeks).
  
• A process for retraining staff to handle service, they can quickly and reliably create quality service technicians on command.
  
• An inspection checklist for identifying service work, they can instantly increase the size of each new service job, increasing both their margins and overall revenue.

And because Bryan was tired of seeing contractors not capitalize on the insane opportunity with service work…

He decided to team up with STG to create the Service Accelerator program.

With this, Bryan hands you all of the exact systems, processes, and tools that he used to grow his service department from 0 to 11 million per year…

Removes all of the time, guesswork and frustration needed to figure this out for yourself.

This is also backed up with coaching from experienced service experts to help guide you through implementation and to fine tune these strategies to your own unique business and set of personal challenges.

So, if you’d like to get your hands on two free resources from this course which can help you to instantly 5X the size of each new service job with zero objections… 

And if you’d like to learn more about streamlining the set up of your service department and scaling it as fast as possible, then click here to book a call and speak with one of our advisors about the Service Accelerator program.