Let’s take a moment to celebrate diversity.
No, I’m not talking about the kind of diversity championed by certain parts of the political spectrum. I’m talking about diversity in your revenue streams.
I just attended the 2016 South Atlantic Jubilee, and several of the drillers I spoke with talked about more than just drilling. They also did HVAC. Or septic systems. Or whatever. The point is, they put their drilling rigs to good use, but they didn’t stop there. They looked across a table full of multiple ways to fill customer needs, and made a smart business decision to not leave money on that table.
This advice particularly applies to smaller contractors in smaller towns. Small contractor shops across the country are filled with men and women who understand heavy equipment, hydraulics and a host of other skills that owners can harness to create new streams of revenue coming into their business.
Don’t get me wrong. We’re a drilling publication and I want you to stay in the drilling industry. But what do you do during the slow months? Do you scrimp and budget and complain about eating gas-station hot dogs for lunch? I hope not.
If your drilling business is slow the first question to ask is, how do I make sure I’m working this rig to its fullest potential? Streamline. Get better at setup and breakdown, so that’s not slowing you down getting to the next job (and next collectable invoice). The second question to ask is, what skills do I have in-house that can go to work serving a need not being served in my market? Do you have a good mechanic who is an ace with your rig and back-hoe, but could take on other work? Maybe you could service engines for fellow contractors. Do you have a pump man who’s a VFD whiz? What other electrical can he work with? Maybe there’s potential there. Often, with a little training or a small equipment outlay, you can dramatically increase your business’ revenue potential.
You get the idea. Well installation and service are nice, but drilling can prove cyclical in the best of times. Smart business people find ways to increase their net revenue while at the same time keeping their expenses low. A second, third or even fourth line of revenue on your profit and loss statement can go a long way toward making the cycles of your primary business less of a big deal. And then you can leave the gas-station hot dogs to your driller’s helper and upgrade to something a little more appetizing.
What do you think? Does your business do drilling, but also supply other services to keep the lights on? Does your business have two, three or even four ways to make money? Send me an email and tell me about it.