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Plumber, Totally
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Discussion Starter · #1 ·
My business is 18 months old, been a plumber for 10 years or so. August was a record breaker! Sept. was pretty good, Myself and 2 other trucks doing the road work, I'm starting to step back and do more office stuff/marketing/networking etc. September - 32K in sales, Aug 38k in sales, October 31k. nov. to be about 28k, if trends continue. I'm happy overall. My biggest problem is profitability! It's really tough to put money in the bank, or wherever. As income rises, so does output! Do any of you have good experience with this? Shall I set aside 5% first? Any suggestions? Also, do you pay your techs commission or hourly? So many questions, so little time! Thanks!
 

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We get paid on commission here.
 

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One person in the office with experience should be able to support three in the field. Your overhead will remain steady no matter what your guys do in the field if you dont' change their numbers.

This means that only your direct job costs should rise, but that should be covered in your hourly price, so as a percentage your costs are not going up. Your overhead should be fairly stable. This means that you can budget out some monies for things such as a capital reserve operating account, etc. This is the money you set aside to keep the doors open and the business running during the slow times. But I'm afraid you're getting ahead of yourself at this point.

If you do want to press on at this point, five percent is a bit high overall I think, because the average net profit on a service company doing hvac or plumbing is only about four to six percent nationally. I also think your daily truck average is low (this is why I'm thinking you're a bit ahead of yourself at this point).

With those numbers, I would expect you to have a mature business with one man in the field. For a newer company, two max but those numbers need to go up to almost double with three in the field. When you run your annual numbers based on 32k months, you'll start to see what I mean. Right now you're just under 500 per truck per day.

Until you get those numbers up, I would concentrate on tools and equipement and training to get your guys doing more and selling more on each job. I would also look at partnering with someone like Hodesco to buy from so that you have tight control on inventory and buy only what you use on a regular basis. If you don't use it three times a month, don't stock it.

As for pay, unless you're willing to train your guys on how to properly sell your clients the products and services they really need, paying on commision is a tough thing to implement, however its really the only way to go IMHO. I say this because without incentive, the folks in the field will never feel an ownership of their future with your company. Promises are nice, but a paycheck your plumbers can be proud of is what will drive them on to do their best with every client.
 

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WILLPLUMB4$
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My business is 18 months old, been a plumber for 10 years or so. August was a record breaker! Sept. was pretty good, Myself and 2 other trucks doing the road work, I'm starting to step back and do more office stuff/marketing/networking etc. September - 32K in sales, Aug 38k in sales, October 31k. nov. to be about 28k, if trends continue. I'm happy overall. My biggest problem is profitability! It's really tough to put money in the bank, or wherever. As income rises, so does output! Do any of you have good experience with this? Shall I set aside 5% first? Any suggestions? Also, do you pay your techs commission or hourly? So many questions, so little time! Thanks!
Flat rate + knowing your true cost of doing buisness= successe!!
 

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Plumber, Totally
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86 Posts
Discussion Starter · #8 ·
pricing...

I use flat rates, set by local competition's rates.

I feel that our rates are competetive, but not the cheapest. I DO NOT want to be the low-cost alternative. I'm not having trouble selling jobs, my close rate is about 94%. A price increase is coming, just not sure when. When Gas was $4.00 a gallon, a price increase was easy to justify, not so much now, though. (I'm not complaining, though!)

I appreciate your input.

I'm 90% off the road and in the office now, and #'s are still strong, looking to do 33K in December. My daily per truck # is better with me in the office.
 

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Why are you using your competitor's rates? If their numbers are wrong, so are yours. You need to know your actual costs of doing business.
 

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residential service
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I am your competitor here in Birmingham, although I don't think our paths have ever crossed (it's a pretty big town). I think your numbers are low. I am a one man shop. I'm in a truck everyday. My wife answers phones, schedules, dispatches. I will do anywhere from 20K - 27.5K each month by myself. I have been struggling to break 30K for some time now. Keep in mind that I do everything that a business owner must do except for the phones. I need you to start doing 25K per month per tech so that I can start getting 30K - 40K per month :yes:. :no: not really because what I generate has nothing to do with what you do. The real point is that you seem underpriced based on what you are saying your numbers are. You will of course do whatever you think is best for your business. I comment for your benefit and perhaps indirectly mine.
 

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WILLPLUMB4$
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I am your competitor here in Birmingham, although I don't think our paths have ever crossed (it's a pretty big town). I think your numbers are low. I am a one man shop. I'm in a truck everyday. My wife answers phones, schedules, dispatches. I will do anywhere from 20K - 27.5K each month by myself. I have been struggling to break 30K for some time now. Keep in mind that I do everything that a business owner must do except for the phones. I need you to start doing 25K per month per tech so that I can start getting 30K - 40K per month :yes:. :no: not really because what I generate has nothing to do with what you do. The real point is that you seem underpriced based on what you are saying your numbers are. You will of course do whatever you think is best for your business. I comment for your benefit and perhaps indirectly mine.
Wow this is deep man this is really getting to the true heart of being brothers of a trade. By elevating yourself you do lift up your brother.
I've found over the yars, that the same percentage of people complain about a price when I used to get 650 for a WH as when I started getting 1000 and now when I'm up to 1250. Yes I do less heaters per year, but overall, the same percentage was made from installing heaters as in years past, and I did less work...
Do less, get paid same. Sounds good huh. Also allows me to focuse on other facets of the buissness. If I wanted to do busy work, I could go to work for a factory or get back into new construction.
 

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A Lot of shops don't make more per call because they don't ask, a mainline back up that you sell for 125-150 can be sold for 250-350 in most cases,include a decent warranty,excellent customer service, and a fast response time and it adds value to the extra money you charged.
 

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Wow this is deep man this is really getting to the true heart of being brothers of a trade. By elevating yourself you do lift up your brother.
I've found over the yars, that the same percentage of people complain about a price when I used to get 650 for a WH as when I started getting 1000 and now when I'm up to 1250. Yes I do less heaters per year, but overall, the same percentage was made from installing heaters as in years past, and I did less work...
Do less, get paid same. Sounds good huh. Also allows me to focuse on other facets of the buissness. If I wanted to do busy work, I could go to work for a factory or get back into new construction.
I do a lot of reading in all the forums and I see the number $1250 for a water heater many times. I have also seen many posts stating that $1250 is too much. Although, I agree with the $1250 price. This is the same price we charge for a 30 or 40 gallon gas water heater, and we try to jack up this price with extras whenever possible. Does this $1250 price include sales tax, earthquake bracket, flex, and gate valve when necessary.

Where did you come up with this price? Is this a price you figured the traffic will bear, or is this a price that has been written in another post? Do you have this price written in a price book.

Thank you in advance and afterward, too.
 

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I keep seeing this " $ 20k -$25k per month per truck " ,,, How many calls a day are yous guys averaging ?? 5 or 6 days a week ?

Just curious

Cal
 

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Plumber, Totally
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Discussion Starter · #19 ·
2 trucks only now, averaging 2.5 calls per day. monday, did 9 calls total, today, did 5, average from 6-08 thru year end was 2.4 per day. I agree, rate per truck should be higher. techs are paid commission on flat rates. we NEVER charge by hour - time and materials would be a lousy way to make a profit. I've gotten rid of some un-nec. expenses, making progress, rome wasn't built in a day.
 
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