Why Your PEI Business is Bleeding Money (And How to Fix It)

After a full day on the job, do you ever look at the numbers and wonder, “where did all the money go?” Welcome to the Petroleum Equipment Service Industry—where profits are high in theory and oddly elusive in practice. If your PEI business feels like a financial colander with holes in all the wrong places, you’re not alone. Let’s take a look at the common ways companies quietly hemorrhage cash and what you can do to plug the leaks. 

Underbidding 

Let’s talk about underbidding. You know, when a potential client says the other guy does it for cheaper? And then you offer rock-bottom pricing just to get the job. You figure the losses will be worth it in the long run. Many PEI businesses fall into this trap thinking it keeps them competitive. It doesn’t. It just makes you the cheapest option—and possibly the least profitable company on the block. 

Next Steps

1. Implement Accurate Job Costing: 
   1. Break down every job by labor, equipment, materials, and overhead. 
   2. Use job costing software like Aptora’s Total Office Manager with job costing features.
   3. Include a standard profit margin in every bid (aim for at least 10-15% to start). 
2. Review Past Projects:
   1. Analyze completed jobs to compare estimates vs. actual costs. 
   2. Adjust your pricing models accordingly. 

Overhead  

Overhead can be, well, overhead. Easy to forget. Until it crashes down while you’re trying to calculate your profits. 

Petroleum equipment companies often underestimate overhead—things like insurance, rent, utilities, admin staff, and fleet maintenance. That means you’re charging for parts and labor but not for the infrastructure that makes those services possible. 

Next Steps

1. Categorize Your Overhead:
   1. Fixed (rent, utilities, insurance) 
   2. Variable (fuel, supplies, temporary labor).
2. Use Accounting Software: 
   1. Tools that allow overhead to be allocated by sales or labor are a must. 
3. Audit Monthly: 
   1. Create a recurring monthly calendar event to review fixed expenses. 
   2. Eliminate non-essential costs and renegotiate contracts where possible.
4. Learn More: 
   1. Resource: Guide to Business Overhead Costs: Examples and Calculation

Pro Tip #1: Create a monthly “Overhead Audit” checklist. Ask yourself: Does this expense drive revenue? Could it be done more cheaply? 

Marketing

Don’t fall prey to the “If you build it, they will come” myth. Your company might be excellent at fuel system installation and maintenance, but if your idea of marketing is a dusty brochure and a website that belongs in the 90s, you’ve got a problem. 

Marketing isn’t optional. It’s how future customers know you exist, and how current customers remember to call you back. 

Next Steps

1. Set Up a Basic Marketing Plan: 
   1. Identify your ideal customer.
   2. Define your core service areas. 
   3. Create a monthly content and outreach calendar. 
2. Use Affordable Tools: 
   1. Email marketing: Mailchimp or SendGrid
   2. Social media: It costs nothing to post regularly on Facebook or TikTok 
   3. Website builders: Wix, Squarespace, or WordPress 
3. Sample Monthly Marketing To-Do List: 
   1. Week 1: Post 1 blog article (e.g., “Top 3 Signs You Need Tank Maintenance”) 
   2. Week 2: Send one email blast to customers and prospects 
   3. Week 3: Update social media 2-3 times (e.g. photos from job sites, team intros) 
   4. Week 4: Run a Google Ads campaign for $100 to target your service area. There are great YouTube tutorials to get started.
4. Learn More: 
   1. HubSpot Academy offers free marketing courses. 
   2. The website attentive.com has marketing resources and SMS texting templates. 

Pro Tip #2: Set up Google Alerts for your competitors and keywords like “fuel system installation near me.” You’ll see what others are doing and stay ahead of industry buzz. 

Scheduling

If your crews are driving all over the map, showing up to sites that aren’t ready, or waiting on parts that should have been ordered last week, congratulations: you’re losing money by the hour. 

Poor scheduling is a silent killer. It creates bottlenecks, burns out employees, and turns what should be a profitable project into a logistical nightmare. 

Next Steps

1. Use Centralized Scheduling Software: 
   1. It should integrate dispatching, inventory, and time tracking. 
2. Set Realistic Job Start Dates: 
   1. Confirm permit approvals, equipment delivery, and subcontractor availability before locking in dates.
3. Implement a Daily Review: 
   1. Have your project manager check the next day’s schedule every afternoon. 
4. Cross-Train Your Team: 
   1. A flexible workforce can reduce downtime caused by job delays.

Pro Tip #3: Build buffer time into every schedule. It’s easier to look like a hero for finishing early than to explain to a customer why your crew is still on site two days past deadline. 

Stats Don’t Lie: The Margins Are There 

According to industry research, the average net profit margin for specialty contractors hovers between 4% and 10% depending on the niche and how well the business is run. For PEI businesses, which often require skilled labor, compliance, and custom fabrication, the margin can (and should) be higher—but only if you manage your operations like a CFO, not a firefighter. 

Many companies in the service industry go under not for lack of work, but for lack of profitable work. There is a difference. Just because your trucks are moving doesn’t mean you’re making money. 

So What Can You Do About It? 

Here’s a straightforward plan to fix the leaks: 

1. Use proper job costing tools. Break down every bid into labor, parts, equipment, and overhead. No guessing. 
2. Monitor overhead monthly. Create a dashboard that gives you visibility into your fixed and variable costs. 
3. Track time accurately. Your technicians aren’t paid by gut feeling. Neither should your estimates. 
4. Market like your survival depends on it. Because it does. 
5. Integrate operations with financial reporting. If you don’t know what job is making or losing money in real time, you’re flying blind. 
6. Review your budget weekly or monthly. Compare actuals to goals. If you’re off track, dig in and ask: Where are we overspending? Which jobs aren’t profitable? What should be cut or reworked?