Latest from Best Practices

spb2015 / iStock / GettyImages
Photo 9612256 © Scyther5 |


ucky-photographer/iStock/Getty Images Plus

Get big or go home

May 21, 2018
Four out of ten plumbers attending trade shows express no desire to grow, which means they are coasting at best. Even when you’re coasting, you are headed downhill.

Four out of ten plumbers attending trade shows express no desire to grow, which means they are coasting at best. Even when you’re coasting, you are headed downhill. Here are six reasons why you should grow your business.

Profits increase

Not every large company is extremely profitable, but in the future it’s going to be harder for small to mid-size companies to make money. The reason is the regulatory environment. While we have had a slight reprieve in the growth of the federal regulatory state under the current administration, it is the nature of regulators to regulate, legislators to legislate, and bureaucrats to make more rules. The default state of government is to grow. States and localities will rush to fill any regulatory voids. Moreover, what one president can attempt to undo, the next can restore. The future will have more rules and red tape.  Count on it.

Large companies can spread the cost of compliance over more sales. They are more adept at avoiding the snares of the unintended consequences resulting from well-intentioned legislation that far too often yields the direct opposite of its stated objective. The smallest plumbers simply ignore the rules and hope they won’t get caught. Plumbers in between, get squeezed.

Exit better

Too many plumbing companies are just closed down and the assets are auctioned off. Larger companies with greater profit are more attractive to buyers. This gives the owners options, which include selling to family, employees, or an outsider.

Life is easier

It is easier to run a large company than a small one. In a small company, everything is up to the owner. In a large company, the owner focuses on areas where he performs well and where he enjoys the work.  For everything else, he has “people.”

In a small company, the owner can take off any afternoon he wants, but not any week. Leave for any time period and lose customers. In a large company, the owner can not only take off, but usually can afford to take off on nicer trips.

When one plumber quits a three-truck company, the business takes a hit. When one plumber quits a 30-truck company, the business hiccups.

Buy better

It should be not surprise that large companies buy better than small companies. Larger companies get better prices for parts and material, insurance, vehicles, and so on. They get special deals and incentives, including trips.

Pay better

Because they buy better, run less overhead per billable hour, and are more efficient, large companies have more money for salaries, wages, and benefits. The owners make more money. The plumbers make more money.

Be more attractive

Face it, larger companies are more attractive than smaller ones. If for no other reason, they are more attractive because they are better known. Larger is safer. Larger is more solid. Larger companies find it easier to attract new customers.

As companies grow, it becomes easier to attract employees. Larger companies have more opportunities.  Career plans become realistic. Training is better and more regular.

Getting big

Few contractors grow beyond half a dozen trucks. The biggest limit on their growth is the owner. Until the owner gets out of the truck and begins working on the business, opportunities are limited to the owner’s ability to run the business as a part-time manager.

Once the owner takes on a true management role, things begin to happen. For things to keep happening, the owner’s personal growth must exceed the company’s financial growth. The owner must learn the craft of business and become more proficient at it than the craft of plumbing.

Mastering the craft of business used to be more of a challenge. Today there are nearly unlimited opportunities for plumbing contractors to learn about the business side of plumbing. This includes local trade association programs, industry trainers, professional alliances, and more.

Is growth a requirement? Look in the backyard. Every plant is growing or dying. In nature, stagnation is not an option. Neither is it an option in business.

If you want to grow, the essential tool is the Service Roundtable, the most affordable alliance in the PHC industry. Learn more at or text “ten” to 797979 to try it for $10.

Matt Michel is CEO of the Service Roundtable. Need a speaker? The Service Roundtable will provide speakers to any meeting of contractors free of charge. Anytime. Anywhere. Visit or call 877/262-3341.

About the Author

Matt Michel | Chief Executive Officer

Matt Michel is CEO of the Service Roundtable ( The Service Roundtable is an organization founded to help contractors improve their sales, marketing, operations, and profitability. The Service Nation Alliance is a part of this overall organization.

Voice your opinion!

To join the conversation, and become an exclusive member of Contractor, create an account today!

Sponsored Recommendations