“Time is money” is a saying appearing in a 1748 essay, “Advice to a Young Tradesman,” by Benjamin Franklin. When time is spent, it can never be regained. Once a moment in time is gone, it is gone forever. I offer the information contained herein as advice that all tradesmen should heed, especially in the building trades — regardless of whether they are in the new construction or service sectors. After all, the time it takes to construct or service buildings is the product contractors offer the public.

Before I became a contracting business consultant, I was a plumbing and steamfitting apprentice, journeyman and plumbing/HVAC contractor. When I decided to enter the business arena, offering my trade talents to the public, I directed my energy to the service sector.

As a plumbing/HVAC service contractor, I quickly realized that my service vehicles needed to be stocked with certain materials used regularly to control my operational costs, especially as they pertained to time. Then, I could keep the prices I needed to charge consumers as low as possible and still recover my true costs — and earn the profit my business deserved for our excellent delivery.

This required me to create an inventory list of items typically used daily in my service area. 

For example, my service truck inventory included six chrome-plated, tubular brass P-traps and three PVC P-traps. Tubular brass traps seem to require replacement more often than PVC.

I chose chrome-plated tubular brass P-traps rather than rough brass because the chrome-plated traps could be used where rough brass traps were needed, but I couldn’t use rough brass P traps where chrome P traps were needed. This allowed me to control the amount of inventory as it pertained to space available on the service vehicle.

I decided that six chrome-plated, tubular brass P-traps were the amount to stock on each vehicle because any private house in my service area had at least one kitchen trap and two lavatory traps. If my technician sold three at my first stop of the day, three would still be available for any subsequent service calls.

You might be thinking that if the tech also sold three chrome-plated tubular brass P-traps at the second service call and the third service call needed those traps replaced, the tech would not have any traps to sell. And you would be correct.

However, tracking average inventory usage showed me that six traps were the correct number for my service area. If my inventory control found that more were needed, more would have been stocked. Each service vehicle also had many often-used items stocked on the truck. 

Similarly, to address heating calls, I concluded that six thermocouples, three power-pile generators, two 24-volt combo gas valves and one power-pile gas valve were sufficient for each day. We also stocked circulators, zone valves, etc., similarly.

Each item stocked on the service vehicles was an item that would be used regularly on a typical day in our service area. This included fittings, tubing, pipe and ancillary materials.

Suitably Stocked Service Vehicles

Since time is money, keeping a logical and properly structured service vehicle inventory is mandatory to control true operational costs pertaining to services offered to the public. When the material is on your service vehicle, your tech will spend less time performing a service.

When you properly and shrewdly control true operational costs, you can arrive at selling prices allowing you to close more deals and recover your true costs while earning a profit above those costs pertaining to service.

However, as service vehicle space is finite and common sense is a useful concept, not everything could, or should, be on your service vehicles.

For example, items not regularly used should not be on the service vehicle inventory list. Larger, more space-consuming items such as water heaters, boilers, furnaces and air-conditioning condensers have different capacities for gallons, BTUs, tonnage, etc. You can’t keep them all on the truck.

You also must consider that there are rarely used items. In my area, water heating systems and forced-air furnaces are predominantly used. However, occasionally, we ran into a steam system that needed an old-style, bulky, low-water cut-off replaced. Items like that were not part of my service vehicle inventory list. 

Some items must be picked up, and the time to pick those items up should be paid for by the consumer who is doing the consuming. 

Then there are those items that are part of your service vehicle inventory that you ran out of because your tech used the last one on the truck at the last call.

Keeping in mind that time is money, you must have a plan as to how to handle the time spent picking up the material.

Who Pays for Pick-up Time?

Regarding material not part of my service vehicle inventory, I had to consider the time to pick it up. In my service area, it would take approximately 20 minutes to drive to my shop or local supply house. On average, it was about another 20 minutes spent at the shop or supply house getting the material and another 20 minutes driving back to the jobsite. That’s one hour of time — or one hour of money. 

So, who should pay for that hour? As I previously mentioned, since the material is not part of the regular service vehicle inventory, I believe the consumer should pay since the consumer is consuming the tech’s time. Therefore, the material pick-up time should be reflected in the calculation of the true operational cost to perform the service before arriving at its selling price.

I take the opposite position regarding material on the service vehicle inventory list. 

For example, when my tech used all six chrome-plated tubular P-traps (or any truck inventory item as per the inventory list) before the end of the service day and had to return to the shop, go to the supply house or have me send another tech to replenish the truck inventory, I believe that time should be absorbed by the contracting business. 

If that situation reoccurs on a regular basis, it is the responsibility of the contractor to alter the truck inventory list since it obviously is an often-used item.

Time is reflected in every aspect of service. 

In addition to the time spent on material, you incur the time it takes to drive to the consumers’ locations since buildings can’t be brought to you. 

Speaking to the consumer, explaining procedures, diagnosing situations, calculating and quoting prices, and performing services takes time, as does testing the safety and function of your services. And don’t forget the time to do the paperwork, whether manually or digitally completed.

In addition to remembering that time is money, you must remember the primary reason your business exists: to bring in more money than it costs you to be in business. If you don’t, you will be miserably stressed and frustrated while you are in business — until the day you go out of business.