Taking a Close Look at Operating Structures

There are advantages to both franchises and going solo; take a look at what best fits in with what you want

Taking a Close Look at Operating Structures

Joan Koehne

A plumber who starts his own business has a lot of questions to answer. Is it best to go it alone? Work with a partner? Join a franchise?

Plumber Jim Dunn chose to operate solo. After working for other plumbers for 20 years, he opened Above and Beyond Plumbing in 2005. He specializes in residential service work in the Indianapolis area. His son David joined the business in 2011 and worked with his dad for four years. David, 20, passed away unexpectedly in 2015.

In contrast, plumber Jose Pina owns Mr. Rooter Plumbing of San Bernardino, California. Pina began his career as a carpenter but switched to plumbing in 2006. In 2016, he opened a plumbing business and joined the Mr. Rooter franchise the same year.

Two different plumbers with two different organizational structures. Although different in many ways, the two entrepreneurs had something in common: Both were tired of working for other people.

“The only way to have it the way I liked it was to start on my own,” Pina says.

CONSIDERING FRANCHISES

“You get in a big company and you’re just another number,” Dunn says.

Dunn worked for big companies that emphasized quantity. How many calls can one technician run? He emphasized quality and wanted to take time with each customer. He also wanted more control over his work schedule.

“The main thing really was having control over your own life,” Dunn says. “Having kids, I missed too many recitals, football games and soccer games working for other companies, so I started my own company.”

Dunn posed one question for plumbers considering a franchise arrangement: What can they do for me that I can’t do for myself? The same question works for partnerships. How can you benefit from working with a partner?

A franchise is advantageous for a plumber without business experience, Pina says. With a franchise, everything is laid out for you. “They’ve helped me create a system that I would never have had,” he says.

Contrast this to Dunn’s method of developing operations: “One hurdle at a time — basically one mountain at a time. I just kept jumping through the hoops and tried to figure it out,” he says.

When Pina has doubts or questions, he turns to his franchise consultant for reassurance and answers. “They helped me get through some rough periods,” he says.

LESSONS LEARNED

One of the rough periods occurred after Pina purchased a second territory in June 2018. For the first four months, none of the marketing was working. By October, the franchise’s marketing consultants turned things around and the area grew by tenfold.

“Stay on top of your marketing personnel,” Pina says. “Be on the phone; look over the paperwork; go over data with them.”

Dunn learned his own hard-knock lessons in marketing, especially when transitioning to digital marketing, search engine optimization and online reviews.

“Before, all you needed was a truck, tools, licenses and an ad in the phone book. The more money you threw at the phone book, the more money you’d make,” Dunn says. Times have changed.

“It’s not easy,” Dunn says. “I’ve been burnt a lot of times. You really gotta watch it. Find someone you can trust to do the SEO.”

The power of franchise marketing put Mr. Rooter Plumbing of San Bernardino on a fast track to success. “Wow, we haven’t looked back,” Pina says, referring to 2016. “We ended up being Franchise Rookie of the Year and did over $1 million in sales the first six months.”

The company grew from three to four employees to 10. Seven technicians are on the road, supported by three office personnel. Pina says he changed his future by becoming a franchisee.

“I could either be a plumber for the rest of my life working for my own company or I can be a business owner by starting a franchise,” Pina says.

ALL THE FACTORS

Before committing to Mr. Rooter, Pina considered the monthly franchise fee.

“Are franchises expensive? Yes. But do they give you the keys and knowledge to get to that point in your life when you’re finally stable? Yes,” Pina says.

A loss of identity is another factor associated with franchises.

“It’s important to create that identity because people want to know you’re a local,” Pina says. “I make it personal. If there’s any problems, I can knock on your door or make a phone call.”

As a sole proprietor, Dunn maintains his independence, operating the company the way he wants. He creates his own schedule, clustering jobs together in the same area whenever he can.

“The closer your jobs are together, the more you can get done and the less mileage you put on your vehicles,” Dunn says.

Dunn also answers his own phone calls. Above and Beyond Plumbing has three different phone numbers, each coinciding with a prefix in a local city. That way, customers call a prefix they recognize. All three lines forward to Dunn’s cellphone, and he speaks with customers directly.

“I noticed early on that people like actually talking to the plumber when they call,” Dunn says.

With lower overhead than a larger company, Dunn can charge less than the competition and pick up enough jobs to make a decent living. After 34 years as a plumber, Dunn says he’s not ready to retire.

“I like working with my hands. I like helping people out,” Dunn says. “That’s what you’re doing when you’re plumbing — helping people out.”

Creating the structure of a plumbing company involves personal, legal, financial and business considerations. Each structure has advantages and disadvantages, but the ultimate outcome is job satisfaction.



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