Every plumbing company wants to become as efficient as possible in its operations. But there’s more than one way to get there.
Improving the efficiency of a plumbing company can take many different forms. For Mark Vice it was purchasing some land so he could build his own 5,100-square-foot supply store.
“It came to the point where we had two or three trucks sitting at a local hardware store every morning for 30 minutes,” says Vice, owner of Fayette Drain & Sewer Service in Fayette, Alabama. “Not only were we losing all that time at the store, we’d also waste time running back and forth to it to get parts during the day. I’m guessing it was costing me at least 30 minutes every time a service technician had to run to get, say, a 50-cent part … and in most cases, you can’t charge a customer for that lost time.”
He also estimates that he was paying as much as $200,000 a year for plumbing parts, thanks to a 40 to 50 percent markup compared to the wholesale prices he now pays for parts. On top of that he sells repair parts to do-it-yourself homeowners and some other local contractors.
“The store is paying for the mortgage and the land,” Vice says. “It’s been a great investment for us. It’s a great location. Now we have a quick employee meeting every morning, then they get their parts, get in their trucks and head out to their jobs.”
Botto Brothers Plumbing & Heating in Long Island, New York, has also found success maintaining its own private supply warehouse, which has been part of the company since 1963.
“It allows our guys to reload most of their inventory from here, rather than wasting all kinds of hours driving to suppliers and distributors,” says Hunter Botto, co-owner. “When you do that, you can easily lose a guy for an hour — and that’s on a good day. It’s a nightmare. The last place we want to go every day is a supply house.”
Avoiding excessive time at the supply house is just one way plumbers boost efficiency. Here are some other companies’ stories.
Fewer Jobs, Higher Profits
A solution for Dippel Plumbing in St. Louis was completely restructuring the plumbing side of the business and taking on fewer jobs overall. The company decided to move away from the apprenticeship model and cut back the number of plumbing staff, retaining only two highly experienced journeyman plumbers.
“It took about a year to make the transition we wanted,” says manager Chris McNulty. “When you look at the number of customers we turned away as we shifted, someone could have opened two or three companies off of that business. But frankly, with our two plumbers concentrating on the finer points of plumbing while servicing homes that are primarily 80 to 100 years old, we are seeing a larger profit margin than we did before. It has proven to be a good move.”
Backlund Plumbing in Omaha, Nebraska, converted its entire fleet of service vans from gasoline to compressed natural gas (CNG) in 2012. At the time, CNG cost only $1.70 per gallon while gasoline prices were hovering around $3.60. Chris Roseland, co-owner, says the company also considered the fact that natural gas prices historically aren’t subject to the volatile swings commonly seen in gasoline prices because the conversion wasn’t cheap — about $12,000 per service van. With additional financial help from rebates, Backlund Plumbing was able to quickly recoup the investment through the new fuel savings.
“I’d say 90 percent of those first 10 conversions paid for themselves within the first two or three years,” Roseland says.
Sac Val Plumbing in Sacramento, California, installed GPS technology on its service trucks to become more efficient. If a plumber needs a particular part, the GPS allows them to quickly locate another vehicle in the area that may have it, saving a trip back to the shop or supply house. It’s also improved response time to service calls, eliminating the need to have back-and-forth phone messages to locate drivers, says Nick Kastanes, general manager.
“Whether your plumbing company has three service vehicles or six, GPS is essential,” Kastanes says. “Even the smallest firm will benefit.”
The Gentlemen Plumbers in Calgary, Alberta, tracks nearly every aspect of its operations. Owner Brham Trim constantly reviews reports that monitor a number of things: the average invoice amount per technician, the number of calls each one makes, how many memberships they sell in a preferred-customer program, how many complaints customers lodge against them, etc.
“We know who’s performing and who’s not,” Trim says. “In essence, we can tell what’s happening in real time. Without this, we might have guys operating on cruise control for a month or two before we realize what’s going on.”
Analytics has also allowed the company to more effectively allocate its advertising dollars. The company has over 400 different phone numbers and, with the help of business management software, tracks which ones generate enough revenue to justify continued use of a particular ad campaign.
The company has different phone numbers on trucks in various service areas, on various regional websites, in phone books and even on refrigerator magnets in different markets.
“We can go right down the line and decide where we can most effectively spend advertising dollars,” Trim says.
What are the methods you’ve used to improve efficiencies in your company? Comment below or email email@example.com.