14 Recommendations for New Plumbers

Congratulations, you’ve just had your “entrepreneurial seizure” as Michael Gerber puts it. You’re ready to become a “businessperson.” Okay, Mr. Plumbing Entrepreneur, here are 14 recommendations for building your money machine.

1. Attitude is Everything

It’s a cliché, but attitude really does determine your altitude. How you view the world will determine how far you go and how much you will enjoy the journey. Cultivate a positive mental attitude. Approach problems as opportunities.

No one wants to hang around with negative people, work for negative people, or do business with negative people. Thus, it should be no surprise that there’s a strong correlation between success and positivity.

2. Set Goals

There is magic in goal setting. Try it. Set positive goals and write them down. When you set a goal, your subconscious mind starts working in the background on ways to achieve them. You will be amazed at how much more you will achieve.

3. Learn to Read Financial Statements

If you intend to run a business, you must be able read an income statement, balance sheet, and cash flow statement. The income statement shows the flow or revenue and expenses for a period of time. The balance sheet shows your assets, liabilities, and equity for a specific point in time. The cash flow statement shows the flow of money for a period of time. Have them prepared monthly and take time to study them. Calculate the key business ratios.

4. Guard Your Cash

Cash is king. No plumbing company was ever forced to close if there was money in the bank. Beyond the cash flow statement, know your cash position at all times. Build your cash reserves so that you can cover several months of operating expenses. You’ll sleep better at night.

5. Charge Enough

The single biggest reason plumbing companies struggle is also the easiest to fix. They don’t price to be profitable. The biggest two reasons they don’t price correctly are ignorance and fear. They don’t know what they should charge and/or fear people will object when they figure out.

There are lots of price calculators available. The one provided by the Service Roundtable is proven and has helped thousands of plumbers set the right service price. If you fear charging enough, remember, failing to charge enough is subsidizing your customer.

6. Flat Rate

One of the greatest innovations in service pricing was flat rate, or retail pricing. Labor and material and gross profit are combined into a single number that’s the price for each task. Marketing research shows that consumers believe companies that flat rate are more honest and price competitive.

7. Be Unique

Why should anyone do business with you? How do you look different from a thousand other plumbing companies. Find a way to be unique, to stand apart, and focus on it.

8. Wrap Your Truck

The first marketing dollar you spend should be on your truck wrap. Your truck is a mobile billboard, generating at least 30 thousand impressions per day according to the Outdoor Advertising Association. Wrap it boldly and brightly.

9. You’re Growing or You’re Dying

A lot of plumbers reach a plateau and decide to just sit there. Half of them plateau as single truck operators, which is incredibly selfish considering what this means to your family if you’re ever put in a situation where you can’t work for a period of time.

Look in your backyard. Everything you see is either growing or dying. It’s true for nature. It’s true for people. It’s true for companies. Try to grow every year.

10. Network, Network, Network

Business is about relationships. When you meet someone who lacks a relationship with a plumbing company, you become the person he will call for problems. Moreover, you become the person he recommends when asked. So, build relationships with people who have lots and lots of connections. These are community centers of influence. You will find them at your local Chamber of Commerce mixers, in leads clubs like BNI, and in service clubs like Rotary, Lion’s, Kiwanis, Optimist, and Civitan. This is more powerful than you can imagine. Join organizations where you can network.

11. Get Out of the Truck, ASAP

When you’re turning a wrench, you’re working for wages. When you employ people who are turning a wrench, you are building wealth. You should work towards getting out of the truck and hanging up the tools as soon as possible. Stop working like a tradesperson and start working like a businessperson.

12. Give People Options

Always give people choices. Give them options to repair, replace, or upgrade. Give them options to use parts and products made in the USA—which might cost a little more—or cheaper imported options. Give them options between tankless and storage water heaters, between 5-year, 7-year, and 10-year water heaters. Some people will always choose the cheapest. Some will always choose the best. You can’t know who will choose what, so give them options and they can decide.

13. Not Everyone is Your Customer

You will inevitably encounter customers who want service at a level you cannot provide at the prices you charge or who want prices too low for the service you offer. They are not your customers. It’s okay to fire them and focus on the customers you can serve well.

14. Make Yourself Unnecessary

The goal of every plumbing company owner is to become unnecessary. Hire people better than you. Give them things to do that you dislike or suck at. Work on what you enjoy and are good at with the ultimate objective to make yourself so unnecessary that your business effectively runs itself without the need for you to be involved on a daily basis. That’s business freedom. Let freedom ring.

Looking for solid business advice in the form of trade centric stories that are easy and fun to read? Buy a copy of Matt Michel’s book, “Contractor Stories” on Amazon. For pricing calculators and other tools, join the Service Roundtable.