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Old 09-06-2008, 09:50 AM   #1
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I am curious about how to gauge this. Do you just add a service truck when you are overloaded with work/phonecalls for a month straight? How do you know when its time to add a new technician/truck to the company? Plumbcrazy mentioned having 500-600 customer's per truck. I never heard that equation, but it sparked my interest in this discussion.
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Old 09-06-2008, 10:02 AM   #2
 
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We added our second truck when we were so busy that we risked losing our current customers. When business is busy (billing 30-40 hrs. per week) for a month that should be normal. If you are working an extra two hours everyday to fit everyone in, it's time to start the search. Your company has 50 hours of work per week. New plumber does 40, you do 10 and use the rest of your time is used to grow your business.

Of course, this is if you have the funds to invest in a new truck. Capital & volume of calls should both be considered. A lot of companies go under growing too fast. You need to have enough capital that if you had to let your plumber go, you could afford the extra truck payment, insurance etc.
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Old 09-06-2008, 11:19 AM   #3
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Carl,

This is a bit of a double edge sword. Employees can be an asset or they can be your biggest headache. In addition, the profitability of a one man shop often drops when it becomes a two man shop. The additional cost related to becoming an employer should not be taken lightly. However, the only way for a 1-man shop to become a 10-man shop is to become a 2-man shop first.

I'm not sure there is a number of customers per truck as the variables change with the seasons and conditions. As Plumbcrazy has suggested you are better off basing it on your billable hours per month. Often a good time to add a new truck is when a new contract or customer comes on line and you can anticipate the additional work.

Now unless you have a money tree in the backyard a new truck is not cheap to set up. The cost of the vehicle is one thing but then you also have all of the equipment, materials and tools to stock it. If you are thinking you are getting to the point where you are ready I would start buying backup tools for your truck which can later be transferred to a new truck.

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Old 09-06-2008, 03:38 PM   #4
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Thanks for the input. I don't plan on hiring anyone too soon, but I will eventually. I was just curious how to know when its time. Good answers.
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Old 09-06-2008, 07:02 PM   #5
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Quote:
This is a bit of a double edge sword. Employees can be an asset or they can be your biggest headache. In addition, the profitability of a one man shop often drops when it becomes a two man shop. The additional cost related to becoming an employer should not be taken lightly. However, the only way for a 1-man shop to become a 10-man shop is to become a 2-man shop first.
This keeps ringing in my head Mark. I want to grow the company eventually, but the downsides are hard to ignore. Very good points here.
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Old 09-06-2008, 08:56 PM   #6
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All sorts of costs increase when you hire that additional plumber. So the basic question is whether adding an additional plumber will increase or decrease your overall profit. The basic principle is this: Adding an additional plumber (if you have the work) will always make the company more money untill the increase in gross sales requires the company to add additional office staffto support the field. Adding office staff will cause a dropp in overall profits for awhile until gross sales significantly increase.
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Old 09-06-2008, 09:00 PM   #7
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My boss added another guy without spending a dime to buy a truck and tools, by hiring me and agreeing to pay for the use of my truck and tools.
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Old 09-06-2008, 10:23 PM   #8
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Excellent thread by the way...just sitting in the back listening.
Mark has some VERY good points, and no matter how tantalizing the idea of growing might seem, it's not something I'd rush into.
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Old 09-06-2008, 10:45 PM   #9
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Quote:
Originally Posted by Killertoiletspider View Post
My boss added another guy without spending a dime to buy a truck and tools, by hiring me and agreeing to pay for the use of my truck and tools.
You're the exception to the stool--oops! I mean rule.
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Old 09-06-2008, 11:52 PM   #10
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You're the exception to the stool--oops! I mean rule.
What are you trying to imply here?
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