Have you ever wondered how you can make your plumbing business more profitable?

You already know how to run your plumbing business, but with the right insight, you can enhance profitability and give a much needed boost to your business…

In this blog, you’ll find five resources—and some bonus tips—that can help your plumbing business to become more profitable.

While it may look like you’re comfortably covering your expenses and meeting annual targets, by digging deeper, you can better see if there’s any hidden aspects of your business that are eating into your profits? Or perhaps you can identify strategies to streamline your team’s productivity, to help save time and money?

Below, we’ll explore more on these topics and offer advice on the necessary steps you can take to create a efficient, productive, and profitable plumbing business.

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1. Look at the figures that really matter

Like any responsible business owner, you should know your monthly, quarterly, and annual financial results.

While that’s great for tracking the past, they provide too few clues about where to take your company in the future.

It’s helpful to realize that the figures that really matter aren’t just those tied to the $ sign. Important figures also include time spent on a job, the number of jobs missed, opportunities you’ve got coming in, and others more.

These details are important because they can answer questions you need to be asking about your business.

Questions similar, but not limited to:

  • “Which job types and which engineers are the most/least profitable?”
  • “How much time are we spending on admin tasks?”
  • “What jobs have we missed out on recently?”
  • “How much time/money are we spending on travel and transportation?”
  • “Are we spending more than we should be?”

Some of these answers may lead you to make tough decisions about your staff or customers.

For instance: you might want to stop acting on jobs that take your team too far away from your usual service area, as, realistically, they’re not cost-effective.

Whatever goals you do create though, they need to be backed by analytical data sourced from your job management system.

Then, especially when thinking about profitability, you ned to be smart. And by that we mean SMART.

These goals are:

  • Specific
  • Measurable
  • Attainable
  • Relevant
  • Timely

Goals created in this way will provide you with a well-structured plan for you and your team to follow.

2. Take a look at bigger picture

To ensure you understand your business well, you need to look at it from every angle—this is what people mean when they take to take a holistic view. 

From administration staff to your team on the road, inventory management to invoicing: all sorts of things can influence your profitability.

For instance, consider travel time: you may not have thought about how this metric can affect your finances.

However, if technicians are taking too long to get to a job and you’re not sure why (it could be traffic, it could also be laziness) there are solutions (like fleet management software) that can provide insight.

This information will allow you to better manage job distribution, assign jobs to staff more strategically, and even help your team attend more jobs in a single day, which can lead to boosted profits.

Knowledge is power and without it, you won’t be able to start making improvements. With valuable information about your business, you can identify gaps and come up with solutions to fill the, giving you access to new streams of revenue.

On the other hand, you might identify an issue with your inventory management, revealing you’re spending more on parts than you need to.

While you may be buying parts at a good price and, in theory, make money on markup, what if you’re buying too much and carrying too much stock?

What appeared at first to help you save money, could be costing you a whole lot more…

Commusoft’s inventory management software can be a gamechanger in this department. We’ve worked with clients who have seen a 15% reduction in spend thanks to out parts management… it’s well worth exploring to see how it might help your business, too.

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3. Create a clear picture of cash flow

Poor cash flow can cripple an otherwise successful business.

As mentioned, poor inventory or supplier management can lead to excess funds being tied up in your stockroom or warehouse, but you won’t be able to take effective action to correct the situation without information.

With better insight of cash flow like this across your entire business, you’ll suffer.

With that in mind, consider if your plumbing software allows you to integrate with finance management software and grant you a clear picture of your spend.

This way, you can monitor invoices, job profitability, and more, all in one place.

Only by understanding the big picture (and seeing it clearly) can you make well-informed decisions that increase your cash flow and profitability.

4. Clear your debts

Most plumbing companies (amongst other field service businesses) could do more to reduce their reliance on bank loans and other sources of credit.

Here are a few ideas to help out:

  • First, get an accurate picture of your financial situation and make a sensible decision for prioritising debt repayment i.e. tackle the highest-interest debt first. Otherwise, it’s just going to pile up year-on-year. If your business is going through a tough patch (and everyone’s will), talk to your creditors; they may be able to help.
  • Next, make sure you can keep your end of the bargain on any new repayment terms—if you default, that will make future loans more expensive as your credit rating suffers. At the same time, you should be looking for sensible ways to cut costs and free up cash. Most companies can identify equipment that’s no longer used and sell it off: even as scrap, that’s better than leaving it in storage as useless clutter.

You’ll be far more likely to secure better repayment terms if you can demonstrate a thorough understanding of your company’s current situation and an action plan to turn things around.

You can put everything we’ve covered so far into practice to give yourself the best chance of staying on top of debts.

5. Communicate with your customers

Timely communication with your customers will boost revenue, and with the right knowledge, it’s not difficult to automate some of the processes to prevent profit loss through missed or forgotten payments.

Service and payment reminders are perhaps the best (and simplest) tool to help you.

Customer reviews are also a great way to signal to prospects that your services are worth exploring

We’ll consider both briefly below:

Service & Payment Reminders:

Unsure of how you could make use of service reminders or email requests for payment?

As a plumbing business, consider how the servicing of boilers could fit in. Boilers may typically come with a standard one-year warranty, but buyers can purchase extended warranties from two to ten years—if they do that, they’re required to have the boiler serviced yearly to keep the warranty valid.

That’s where you come in: with a service reminder, you can quickly notify clients to book an appointment. Schedule enough of these regularly (easily automated, too), and the results will speak for themselves year after year.

Alternatively, if you’re looking for help navigating the pricing conversation, look no further than the banner below!

Customer Reviews:

Hearing from your customers can help in surprising ways.

Encouraging feedback means more publicity for your business as well, whether it’s through word of mouth, or online with reviews.

After all, the internet’s influence in helping potential customers make buying decisions is undeniable, with 95% of consumers aged 18-34 reading reviews for local businesses online before making a purchase/using a service (Bright Local survey).

You should make sure you’re leveraging your reviews to attract attention, even if it’s as simple as quoting a review on your website.

Ultimately, the more people hear about your business—and from trustworthy sources—the more likely you’ll attract new customers and make money as a plumber.

Download our Pricing Strategy Guide

If you were wondering how you can make money for your plumbing business, hopefully this blog has given you a few ideas that can help boost your profitability.

When it comes down to it, a job management solution will help to put valuable knowledge at your fingertips so that you can turn intelligence into action.

Whether that means creating new services, re-evaluating what you should be charging, or offering incentives to your customers: there’s a lot you can explore to achieve this goal.

To help you out, we’ve developed a checklist!

Download your copy to better understand more details that impact your pricing strategy, and get started elevating your business, today:

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