Using Software to Increase Revenue & Profitability for Service Business

Published: August 27, 2015

Since there are still only 24 hours in a day and the laws of physics limit time from being expanded, there is a maximum capacity that can be produced by a fixed-size team unless that team works smarter.

For a service business, time is the most valuable asset and a limited commodity that can only be sold once. So it is logical to assume that the best way to grow in revenue is to work more hours, raise rates, or to expand capacity by adding employees. However, raising revenue does not always increase profit.

The best way for a business to increase profit is by increasing productivity during work time, pointed out Dexter Williams of ConnectWise during a CI Summit presentation.

On an occasional basis, raising rates can be an effective solution, depending on market sensitivity. Expanding capacity by adding employees certainly is an option; however, it depends on availability of talent and adds both short term and long term costs.

Efficiency as a Low Cost Revenue Builder

Producing more, in the same amount of time, is a low-cost way grow a business. This is better known as creating efficiency, and it is an important approach for service businesses to take. Businesses can achieve efficiency by finding innovative ways to produce more within a fixed amount of time and by maximizing potential, making the best use of all available time and resources.


Procedures and checklists are often created to help promote efficiency and to minimize downtime by simplifying routine tasks. Items like sales call procedures, proposal creation, project close out, billing and collections, as well as preventive maintenance can all be optimized by documenting the specific steps to achieve an outcome and turn it into a repeatable process. 

Related: 3 Questions for ConnectWise on Recurring Service Revenue

In doing so, results become more predictable and consistent. There is no wasted time or effort spent on extra steps and there is a clear understanding of the responsibilities of all parties involved.

Understand the Process and Its Impact

It is one thing to implement a process but it is another to realize the actual savings and improvements that process creates for a business, says Dexter. Good record keeping makes it easier to understand the process and its impact, to track efficiency, and to achieve – and measure – gains. 

Achieving, measuring and repeating an efficient process gives a business not only improved outcomes, but also a strong foundation on which to grow. Value comes in putting the time saved to good use elsewhere.

Measuring Project Profitability

Project profitability is a function of comparing the time budgeted for a project to the actual time the project takes to complete. The next important step is to identify the surplus or deficiency. When time spent is measured carefully, lessons are learned and adjustments to the approach or the procedure can be implemented to improve future results.

Managing projects, sales, billing, collections, and communication are all critical to a company’s success. The ability to monitor and manage project profitability from one central location is key to growth, stability and uniformity. Enter software. The use of a server or cloud-based software package can be a critical component to business scalability and success if it is designed to monitor, assess and manage in a way that promotes efficiency and project profitability. 

Related: Ease Into a Managed Services Business Model in 5 Simple Steps

Without a management software backbone to support running a business and to manage critical needs such as CRM, communications, proposals, billing, project status, scheduling, and information storage, a company will operate as a group of individuals rather than an efficient team. 

But it is more than just having a software solution in place that yields the results a successful business demands. It is a team’s commitment to knowing how the business is run, using the tools consistently, understanding where to access information, and exhibiting a willingness to make adjustments that address identifiable needs, that creates ultimate efficiency and the kind of success business owners strive to achieve.

I speak from experience, as our business has made a commitment to working with a software solution that we have customized to our needs. The act of defining the solution and making adjustments to suit our specific needs was almost as valuable and enlightening as using the software itself. It taught us to think through how our business is run, what information needs to be recorded, the value of KPIs (Key Performance Indicators), the metrics used to measure productivity, and the need to sharpen and streamline processes. 

Without a software system in place our potential would be limited. With a solution, we are prepared for the future.

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