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When to add a service truck?

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12K views 37 replies 19 participants last post by  RealLivePlumber 
#1 ·
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.
 
#2 ·
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.
 
#3 ·
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.

Mark
 
#5 ·
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.
 
#6 ·
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.
 
#8 ·
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.
 
#22 · (Edited)
Do It Very Slowly



We had 6 dependable trucks back in 2001,

our trouble was finding dependable employees
that could actually produce a profit......:furious:
then everythign began to come to a grinding halt in 2002.. so we dumped half the trucks and all the employees.........


usually when you buy a truck, murpheys law kicks in and everything slows down....

if you are gonna get a truck get a cheap one.....
then its no t too bad to put in back in mothballs if necessary...


I am looking for a new used truck right now....

whats everyones opionion of one of these
ford e-350 cube vans for about 4900??



 
#13 ·
My boss went to Los Angeles because of this link.



My boss spent five days in Los Angeles with this pcplumber to see if what he writes is really true. My boss was really excited when he came back and he shut down our company for two days to teach us the sales methods in this book and to get us new equipment.

http://www.contractortalk.com/f65/copy-our-business-software-50191/

I think this is like a 110 page book that contains a lot of links for free information and software inside the book.

I hope this information can help you. Tell me if there is a problem with this link and I will remove it. I don't know if you are allowed to mention other forums. I hope not!
 
#14 ·
Excellent advice !!

One thing I DID notice when I had employees ,,, it WILL PUSH you to add work !

You will find yourself being much busier running down that next call or finding more work because NOW you are responsible for your other plumber AND ultimately his family.

It is exciting !!!! GOOD LUCK !!!!

On a side note ---- I've always liked NC and hope to move there in the next 10 years ,,,

Got my own tools , truck , uniforms and copy of quickbooks ,,,, need a plumber ??

Wish I could !!

Cal
 
#17 · (Edited)
There's a point where a service company outgrows their area due to population limits and competition. Washington is chock full of blue collars and its about the population of a California county.

If I ever find the magic formula that works for me, I would have to expand/move to the big city.
 
#18 ·
PCplumber is definitely the real deal. He has some excellent ideas when it comes to marketing and sales. But he also has an extremely arrogant attitude and has problems communicating in a normal, friendly manner. He rubbed a lot of people the wrong way at the Ridgid forum, including me.

Anyway, back on topic. I am really in a pickle. I am now so busy that I can't possibly handle all the calls, and I have been turning away calls almost daily all month. I am working a ridiculous amount of hours, and even making some mistakes as I am so overworked. It seems my marketing plan has worked a little too well! On the other hand, I am still not sure about adding a truck. I don't have the capital to buy a truck and set it up for cash, and I am still scared of the idea of hiring a fulltime employee.
The way I see it, I need to either:
A) Start interviewing immediately and shopping for a loan for a second truck and tools despite my fears.
or
B) Start filtering out all the extra calls, by only going on certain jobs and being very strict about my policies (trip charge, etc.)

I like the B) idea better but I am afraid it will may make me look unprofessional to be turning so many calls away. Thoughts?
 
#19 ·
PCplumber is definitely the real deal. He has some excellent ideas when it comes to marketing and sales. But he also has an extremely arrogant attitude and has problems communicating in a normal, friendly manner. He rubbed a lot of people the wrong way at the Ridgid forum, including me.

Anyway, back on topic. I am really in a pickle. I am now so busy that I can't possibly handle all the calls, and I have been turning away calls almost daily all month. I am working a ridiculous amount of hours, and even making some mistakes as I am so overworked. It seems my marketing plan has worked a little too well! On the other hand, I am still not sure about adding a truck. I don't have the capital to buy a truck and set it up for cash, and I am still scared of the idea of hiring a fulltime employee.
The way I see it, I need to either:
A) Start interviewing immediately and shopping for a loan for a second truck and tools despite my fears.
or
B) Start filtering out all the extra calls, by only going on certain jobs and being very strict about my policies (trip charge, etc.)

I like the B) idea better but I am afraid it will may make me look unprofessional to be turning so many calls away. Thoughts?
Arrogant? Geez, go figure...:whistling2:

If it has been one month, I would hire a helper. If its been longer than that, find out why you aren't rolling in cash. A good rule of thumb is if you can pay cash, then it's not a huge gamble.

If you're getting tire kickers, charge them a 45.00 service charge to come out. They usually hang up within 5 seconds anyway.

What's your marketing plan? :yes:
 
#20 ·
Hiring extra help is a big expense and difficult.
But worth it. The trick is to get the employee invested in the company. My best guys are the ones that want to see the company succeed. They know they succeed with me.
Turning away the customer now drives them to your competition. Maybe its a small bs job today. But tomorrow when they need the big expensive job done who will they call? The plumber who helped before.
 
#28 ·
I think it is real hard to justify the diesel unless you can get a steal on them. It takes a long time for the couple extra mpg's to cover the extra 10G at purchase plus the darn near double repair and maintenance costs. I dont know how it is in your neck of the woods but finding a diesel mechanic worth anything around here is like pulling teeth.
 
#29 ·
Master Mark is that from a dealer or individual? That seems like a great price and looks good. I would say that is the way to go.
 
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#30 ·
thanks ...



That is presently on E-bay and it is now at 5000
for a 2005 e 350 super duty gas with 139,000 on it...


their are a ton of them on E-bay right now.

one GMC Savanna 2006 with 92,000 on it went for
6500.... but it was yellow...and you got to drive to florida to get it
( that dont sound like a bad idea right now with all this snow0


the economy is ad and the re-sale prices are very low....






as far as fiding a good Deizel mechanic,
that is nearly impossible....and you got to wait in line for a week or two.

they have got you by the balls and know it.....
 
#33 ·
What Size Is That One

I love my truck...06 E350 got it for 10,000 last year. After working out of a van for a year this was a blessing. I have been adding shelves and materials as I go. LOADS of room in this beast!!
e350S are the best on the road....:thumbup:

what size box is that you have on there...14 foot or 16??

how well does is get around in snow??

I am a little intimidated with the 16 footer, and so I am looking for a 14....

What kind of mileage are you getting out of that
truck??? my best guess is 13-15 mpg??

those will run forever as long as you change the oil every 3000 ...
 
#32 ·
As for diesels we are done with them. Tired of the high dollar repair bills. We currently have an '05 Dodge one ton that we purchased new and was constantly at the dealer and they could never figure it out. We should have gotten rid of it before the warranty was over but the last 20 - 30,000 miles it seemed like it was finally running ok. Believe when I say we maintain all our equipment and vehicles absurdly too much. This truck never saw over 3,000 miles without an oil change but now at 112,000 miles it spun a bearing and we are looking at close to $10,000 to fix it. Everytime they break its $2-5,000 repairs. I have similar stories with the other 3 Dodge diesel we have but not for this thread. My partner and I switched to 1/2 ton gas burners for us about a year ago and are going to phase out the other diesels as well after this.
 
#34 · (Edited)
you said it all...




I think before I would ever put 10k into a used Deizel van just to make repairs on it, I would rather take it down to the bad part of town and leave the keys in it...... and hope someone steals the damn thing... and then sets it on fire...:laughing:


thats whats gonna happen to the deizel I got if it starts giveing me fits.


Hell, that e350 Cube truck with 139,000 on it.....
sold for 6600 on E-bay last night..
I would rather spend the money on that before sinking another dime in a deizel
 
#35 ·
I hear ya Mark. Its actually a one ton cab and chassis with a 10 foot flatbed. Problem is its worthless as is with too much invested in it to junk it. Believe me I thought about other OPTIONS but alas I cannot bring myself to that level.
 
#37 ·
I started out 5-1/2 years ago on my own. After the first year it got so busy that I needed help. So I invested in a truck a couple employees and by the end of the second year I was loosing money fast. The added insurance, taxes and book keeping blew me away. And the one thing I didn't figure an employee will never work as hard as the owner when using time wisely and not wasting materials. Im happy to say that Im back to a one man operation well with a helper and making money again. Some one told me that 2-3 employees will not make any money, but 4-6 employees will make money. and it continous 6-9 no money 10 -13 make money??????? dont know if that is true.
 
#38 ·
I heard the same thing. I think if you are carefull with figuring your overhead, and charging enough to cover it, you should be ok. I am in the same boat. 2 1/2 years into business, and I could really use a mechanic. I am scared to death to make the leap. I want to hold on another 6 months or so to make sure the phone keeps ringing consistently. Untill then, I'll just keep working 6 12's
 
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