How can you make more money in your plumbing business? I’ll share three easy things you can do to put more money in the bank. And you can start doing these things today.
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3 Golden Nuggets
- Cash flow is king. Not cash – cash flow. Let your customers know that you expect payment at the time of service. Don’t bill them later.
- You can put more money in the bank by just raising your hourly rate $25. At four hours a day, that’s an additional $2,000 a month that you made just like that. That’s a couple of truck payments.
- Give Mrs. Jones options (good, better, and best). She wants choice and to feel like she has some control. You will find 80% of your customers will go with the middle option. Your middle option usually winds up being about fifty to a hundred percent more than the fix is.
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Show Notes
Make More Money With Your Plumbing Business
(2:07) It costs money to be in business, so you need the right amount coming in to make a profit. I’m going to share three easy things you can do, starting today, that are going to make you more money and put more money in the bank.
The Right Customer Pays At The Time Of Service
(8:32) Number one. Stick to residential service plumbing.
(11:44) When you’re working for the commercial accounts, you’re behaving like their bank. You get the jobs, then you have to finance, and maybe borrow the money for all the supplies. The supply house wants to be paid. And your guys want to get paid. And you’re waiting on the money whenever it comes.
Homeowners (Mrs. Jones as we refer to them) value you more. Furthermore, Mrs. Jones pays you today. If you’re billing Mrs. Jones, stop doing that. Mrs. Jones pays today for everything else she buys. She’s used to paying today. So she will pay for your service today as well. And that’s money in the bank today.
I’d much rather have $500 today that I can take to the bank than the promise of $5,000 sixty days from now. (13:38) Cash flow is king. Not cash, cash flow.
Let your customers know that you expect payment at the time of service. It’s as simple as, “Will you be paying cash or card, ma’am? Thank you very much.” And they’ll gladly pay you.
If you don’t have something to accept credit cards, it’s simple as well. There are several options. Square is one. QuickBooks offers merchant services. I believe Service Titan does too. So get that set up so you can get paid today.
Make More Money by Providing Options
(15:46) Number two. Nix the “broke-fix” mindset (like replacing just the flapper because it’s leaking.)
Stop thinking about saving Mrs. Jones money. Instead do this one little thing: Provide Options. Give choices to your customer.
Other places that you go, whether it’s Walmart to pick out a TV or computer store for a computer. There is always a good, better and best option. And what normally happens? I call it the Goldilocks syndrome.
Just like Goldilocks and the three bears, this porridge is too hot and this is too cold, but the one in the middle is just right. We buy like that. It just feels right.
So give your customers three choices (only three). In the case where you can fix the flapper, give them the option of the flapper, or a minor toilet rebuild that’s the flapper and a fill valve, or the best which would be a new toilet replacement.
(18:17) You will find 80% of your customers will go with the middle. They’ll go with that minor toilet rebuild.
Your middle option usually winds up being about fifty to a hundred percent more than the fix is. Right there, that’s 50 to a 100 percent more you can get right to your bottom line. That’s money in the bank.
Your customer wants choices. It makes them feel more comfortable and in control. You don’t have to sell, this isn’t selling. Stay within the lane. We’re not talking about trying to bundle a bunch of stuff together. Don’t try to sell the big softener system or go for the home run. We’re talking about serving your customer.
So nix the broke-fix. Give three choices. That’s all they need. Any more than that and it will start confusing them. 80% of your customers will go with the middle, better option — and you’ll be surprised how many wind up saying “I want the new toilet.” Then you really put money in the bank.
Charge the Right Amount
(22:30) I call this knowing your worth. This is where most guys just fall flat on our face. Stop charging just for the time that you’re on the job, and the materials that you used on that job, plus ten percent. There’s a lot of cost to having a business. The fuel, the electric bill, the computer, internet service. What about your health insurance? Programs like Service Titan and QuickBooks.
(23:21) A guy just starting out may think, “I can’t charge $250.” Or, ” I’m not going to steal like those big plumbing companies.” Well there’s a reason they’ve become big plumbing companies. It actually costs you more to operate than those big guys.
And they could charge less, but they don’t because this is capitalism.
What is your current hourly rate? Any professional plumbing company, even if you’re a one truck operation – if you charge anything lower than two fifty, you’re basically working for free.
Know, know, know your worth, okay? If you don’t know what you’re worth, look at what we call honest hourly rates. We are talking about being honest with yourself and truly honest with your customer. And guys, you’re worth a lot. Think about the training and schooling. How many years have you worked to know what you know? And you’re providing that service today. What’s holding you back is how you think about your worth. You need to do the honest hourly rate calculator.
A Challenge To Plumbing Business Owners
I have a challenge for all of you plumbing business owners. You can put more money in the bank tomorrow by just raising your hourly rate by $25. If you think about just four hours a day, that’s an additional hundred dollars a day. Five hundred a week. Basically about $2,000 a month that you made just like that. That’s a couple of truck payments. And when you tell the customer the price, don’t wince. Say it with confidence.
Stick with residential service for Mrs. Jones. And nix the broke-fix mentality by giving your customer choices.
(28:44) These are the things you can do today to put money in the bank tomorrow. Plumbing is a great industry to be in. It is essential. The world may seem a little crazy, but people still need plumbing.
Richard’s Call to Action.
If you want to learn more about numbers that matter and how to best run your plumbing business, why not schedule a free 30-min strategy call with us? Let’s talk about your goals and where you want to be this time next year, and we’ll help you create a path to make that happen. Schedule your free strategy call here today!
