Scary statistic: 97% of all plumbing businesses are operating paycheck to paycheck. If your plumbing business is going down the toilet, it’s possible you’re making one, two, or all three of these classic mistakes.
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3 Golden Nuggets
- Not Charging Enough
- Not Working For The Right Customer
- Not Knowing Your “Why.”
Not Charging Enough
How do you come up with your prices? We’d guess you do one of three things: you copy the price book from the last company you worked for (and then charge 10% less to ensure you get more jobs); you ask other plumbers (who probably aren’t telling you the truth), or you make up prices on the fly.
This is not the way to do business. You’re not selling plumbing! You’re selling time. And many of you are only charging for the time it takes to do the actual job.
Huge mistake. You need to charge for all of your time and expenses. This is key: your customer pays for everything. Parts and labor, yes, but also for the time spent driving to the parts store. Truck leases, gas, insurance, accounting—everything. Plus, any materials and subbed-out work should be marked up 100% to help cover other costs. Buy a toilet for $100? You should be charging the customer $200.
Every business runs like this, but sadly, most plumbing businesses do not.
Our Success Academy talks about this: how to figure out what we call your ‘honest hourly rate.’ If you just go by what others do, or you make it up, you’re not being honest with the customer or yourself.
Not Working For The Right Customer
The right customers are not just “any person with a plumbing problem,” and they’re not all going to be the ones with which you can build the freedom lifestyle. Remember, this isn’t just about money; it’s about time.
So what does the right customer look like?
1. More than one. You want to have lots of customers to choose from. Not just jobs, but customers. For example, a construction company might have 50 houses for you to work on, but that company is still one customer. They find someone else who will do it cheaper, and you’ve lost all 50 houses. Don’t put all your eggs in one basket.
2. The person who directly benefits from your services. The manager high up in the construction company is not actually reaping the benefits from your work and thus doesn’t see the value of you as their plumber. They can easily find someone else. You want a customer who is the actual person using the plumbing.
3. The person who pays today. You’re not a bank giving out loans. You need to collect payment immediately for services rendered. If you’re still sending out invoices to be paid in 30 days, you’re already dead in the water (and you’re using up valuable time to chase that money).
Not Knowing Your “Why”
Knowing why you’re doing all of this is foundational to your success, and it’ll keep you going when the tough stuff hits. And, guess what? Your why is not plumbing. I can assure you that you don’t love plumbing enough to put up with all the crap. If it was easy, everyone would be doing it.
You want to provide a good service, be professional, and take care of customers; all of these are important. But why are you really doing what you’re doing? Your why has got to be something personal, concrete, and measurable. Maybe you want more time for family, or to be able to pick kids up from school. Maybe you want to send your kids to college or help them with a down payment on a house.
Knowing your why will help you keep going despite the inevitable stress of the job.
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!