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Service Agreements


               “Golden Handcuffs”




7/13/2012        "Together We Can Do It"   1
Overview
How service agreements impact
 financially
Making it easy by monthly debit
Impact of spiffs
Impact on gross revenue
Win….Win….Win

7/13/2012      "Together We Can Do It"   2
Three Year Premium
              Plan
   First year…………$159.95
   Second…………….149.95 6%discount
   Third………………..140.95
   Total……………….$450.00
   Upfront payment… $79.95 (For Spiff & Admin
   Fee)

   Monthly debit of $10.59……..35 months
   Always except…cash…check…
7/13/2012        "Together We Can Do It"    3
Benefits and Goals

 Service Calls………….Day……Week……Year
                                        4          20   1000
 Agreements Sold
               50%.........2……….10……….500
               25%.........1………..5………..250
 X 3 Technicians………..3……….15……….750

Example for all associates



7/13/2012                "Together We Can Do It"           4
Company Impact
            Increase Annual Gross Sales

 750 Premium Agreements = $337,500
 750 One Year Agreements = $120,000




7/13/2012           "Together We Can Do It"   5
Looking at Cost
  Cost of Sales….Labor @ 25% = $30,000
           …..Spiffs    @ 6% = 7,200
           …..Materials @ 2% = 2,400
           …...Admin    @ 5% = 6,000
Total COS……………………………$45,600


COS….Cost of Sales
(COS for Service Agreement Sales only as estimate)


7/13/2012                 "Together We Can Do It"    6
How the Numbers Work
   AGS from SA…….$120,000
   Minus COS……….$ 45,600
   Gross Profit……….$74,400 or 62% GM
   Based on income of $41,600 a spiff of $2,49
   Each Tech gets 6% annual raise

AGS….Annual Gross Sales
SA……Service Agreements
COS….Cost of Sales
GM…..Gross Margin
7/13/2012           "Together We Can Do It"      7
Summary
   Make it easy to own a Service Agreement
   Think about your personal goals to sale
   agreements
   Remember how sales contribute to the
   company’s goals
   Win for the customer
   Win for associates
   Win for company

7/13/2012        "Together We Can Do It"     8
NOTES

   All numbers, percentages, and amounts
   used are for example only.
   Your outcome should be more positive,
   based on how motivated you are in
   setting Goals for your associates.
    If you are committed, it will be a
   department in your company.

7/13/2012      "Together We Can Do It"     9
Coaching for Contractors
       “We can’t change the wind but we can adjust our sails”


       Business Systems and Solutions

Flat Rate Pricing Software
(Flat Rate Plus TM)

Service Management & Accounting Software
(Total Office Manager TM)

1099 Heathwood West Dr. Cookeville, TN 38506
615-545-3551

         7/13/2012       "Together We Can Do It"                10

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Service agreements

  • 1. Service Agreements “Golden Handcuffs” 7/13/2012 "Together We Can Do It" 1
  • 2. Overview How service agreements impact financially Making it easy by monthly debit Impact of spiffs Impact on gross revenue Win….Win….Win 7/13/2012 "Together We Can Do It" 2
  • 3. Three Year Premium Plan First year…………$159.95 Second…………….149.95 6%discount Third………………..140.95 Total……………….$450.00 Upfront payment… $79.95 (For Spiff & Admin Fee) Monthly debit of $10.59……..35 months Always except…cash…check… 7/13/2012 "Together We Can Do It" 3
  • 4. Benefits and Goals  Service Calls………….Day……Week……Year 4 20 1000  Agreements Sold 50%.........2……….10……….500 25%.........1………..5………..250  X 3 Technicians………..3……….15……….750 Example for all associates 7/13/2012 "Together We Can Do It" 4
  • 5. Company Impact Increase Annual Gross Sales  750 Premium Agreements = $337,500  750 One Year Agreements = $120,000 7/13/2012 "Together We Can Do It" 5
  • 6. Looking at Cost Cost of Sales….Labor @ 25% = $30,000 …..Spiffs @ 6% = 7,200 …..Materials @ 2% = 2,400 …...Admin @ 5% = 6,000 Total COS……………………………$45,600 COS….Cost of Sales (COS for Service Agreement Sales only as estimate) 7/13/2012 "Together We Can Do It" 6
  • 7. How the Numbers Work AGS from SA…….$120,000 Minus COS……….$ 45,600 Gross Profit……….$74,400 or 62% GM Based on income of $41,600 a spiff of $2,49 Each Tech gets 6% annual raise AGS….Annual Gross Sales SA……Service Agreements COS….Cost of Sales GM…..Gross Margin 7/13/2012 "Together We Can Do It" 7
  • 8. Summary Make it easy to own a Service Agreement Think about your personal goals to sale agreements Remember how sales contribute to the company’s goals Win for the customer Win for associates Win for company 7/13/2012 "Together We Can Do It" 8
  • 9. NOTES All numbers, percentages, and amounts used are for example only. Your outcome should be more positive, based on how motivated you are in setting Goals for your associates. If you are committed, it will be a department in your company. 7/13/2012 "Together We Can Do It" 9
  • 10. Coaching for Contractors “We can’t change the wind but we can adjust our sails” Business Systems and Solutions Flat Rate Pricing Software (Flat Rate Plus TM) Service Management & Accounting Software (Total Office Manager TM) 1099 Heathwood West Dr. Cookeville, TN 38506 615-545-3551 7/13/2012 "Together We Can Do It" 10