Join Richard in this straight-talkin Potty Talk episode where he debunks plumbing myth #3 that you can’t make money with your plumbing business. Potty Talk Episode #404
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3 Golden Nuggets
- You’re Sitting On A Goldmine
- Know Your Honest Hourly Rate
- Stop Being The Bank
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You may have heard that plumbing businesses are not a good source of income. Well, that’s a myth! Plumbing businesses can be very profitable if you know what you’re doing.
But if your plumbing business is struggling to make ends meet, chances are you’re making some common mistakes that are hurting your bottom line.
Here are 3 reasons why your plumbing business isn’t profitable and how to fix them.
You’re Missing Out on a Goldmine
One of the biggest mistakes you can make as a plumbing business owner is to focus on construction service. Construction service may seem like a steady source of income, but it’s actually very risky and low-margin.
Why? Because with new construction service, you only have one customer: the contractor. And contractors are notorious for being unreliable, demanding, and stingy. They can drop you at any time, delay your payments, or haggle over your rates.
On the other hand, residential plumbing service is a goldmine. Residential plumbing service means serving homeowners who have plumbing problems in their houses. And homeowners are the best customers you can have, for several reasons:
– They are loyal. Once they trust you, they will call you again and again for their plumbing needs.
– They are willing to pay. They value quality over price, and they want their problems fixed as soon as possible.
– They are abundant. There are millions of homeowners who need plumbing services every year, and they are easy to find and reach.
So, if you want to increase your profits, switch from construction service to residential service. You’ll be amazed by the difference.
You’re Charging Blindly
Another common mistake that plumbing business owners make is charging blindly.
Charging blindly means setting your rates without knowing your true costs and value.
When you charge blindly, you’re cheating yourself and your customers. You’re either charging too much, which makes you lose customers or charging too little, which makes you lose money.
The solution is to charge fairly, based on your honest hourly rate. Your honest hourly rate is the amount of money you need to charge per hour to cover all your expenses and make a reasonable profit.
To calculate your honest hourly rate, you need to consider everything that goes into your business, such as:
– The time it takes you to run your business and finish jobs
– The tools and equipment you use
– The internet service that you need for your shop
– The electricity in your shop
– Your trucks or vans
– Your taxes and insurance
– Your income goals
Once you have all these numbers, you can use an honest hourly rate calculator to find out how much you should charge per hour.
By charging based on your honest hourly rate, you’re ensuring that you’re getting paid what you deserve and that you’re providing value to your customers.
You’re Being the Bank
The last mistake that plumbing business owners make is to be the bank. Being the bank means letting your customers pay later instead of paying right away
When you’re being the bank, you’re hurting your cash flow. Cash flow is the lifeblood of your business. Without cash flow, you can’t pay your bills, buy new equipment, or grow your business.
So don’t let your customers delay your payments or owe you money. You need to get paid on time. every time. And on time means today – once you’re done with a plumbing job, your plumbers should collect payment today.
To make payment easier for your customers, have your plumbers carry credit card readers on them so they can accept credit and not just cash. It’s 2023; most people prefer paying with cards over cash. By offering this option, you’re showing them that you’re a professional business that values their convenience. And there you have it. The 3 mistakes that are keeping your plumbing business from being profitable.If you follow the tips in this post and avoid these mistakes, you’ll see a huge improvement in your plumbing business success.
Richard’s Call to Action
Need a little more help? Why not join the Million Dollar Plumber Success Academy and learn everything you need to know to grow your business and have a life too–all from the comfort of your home!