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Owner/Operator
How to Choose a Plumbing Service Company
On any given day in any city there are a multitude of people streaming through their local telephone directory frantically looking for someone to save them from water. No, I'm not writing about the daily task of searching for a qualified lifeguard although I have watched the television show Baywatch and wouldn't mind looking for some of those lifeguards. What I'm referring to is something much less sexy then that, the terrible fearful
task of finding a qualified and trustworthy plumber, a plumber who won't cause you to obtain a 3rd mortgage so you can replace your garbage disposal. Many think it would be easier to find a unicorn.
When you open your telephone directory you are confronted with a
barrage of fancy 1 and 2 page ads that promise everything but the quelling of death. They all basically contain the same statements; 24 hour service, emergency service, 7 days a week 365 days a year, we service and install xyz, licensed, bonded, insured, fast, friendly, and the list goes on and on.
Which one will deliver that which you require? You just want the water to stop flowing out of your light receptacle.
Economics 101
How much do those 1 and 2 page ads cost? Who pays for those ads?
These are 2 questions that need answering before you make that call.
The national average for a single page ad in any major metropolitan area is approximately $3500.00 per month, a double page ad runs about $5,000.00 per month. Let's massage some numbers here with a mythical plumbing company, let's call our company "Speedy Plumber".
At Speedy Plumber the average service truck can run approximately 3
service calls per 8 hour day when you stop to consider traffic and supply house stops and various other necessary stops. Those 3 service calls translate into about 5 billable hours. The national average wage for a Licensed service plumber is about $22.00 per hour plus benefits, so let's say for the sake of argument that Speedy Plumber's total labor burden which includes; hourly wage, taxes, workers comp, health insurance, vacation pay, sick pay, holiday pay and training is $38.00 per hour. OK now we have to add everything else it takes to run Speedy Plumber we'll call these things
overhead, we will calculate this overhead for 4 service trucks;
Owners Salary
Office Personnel
Rent
Vehicle expenses
Insurances
Utilities
Office expense
These things total up to an hourly figure of $107.59 so if we add our labor burden x4 technicians to our overhead cost we get $249.59 per hour to run a service van.
Let's catch our breath, phew that felt good.
We've covered a bunch here and we're almost home so stick with me
We have $249.59 per hour for this small shop which we have to
translate into billable hours because that is where Speedy Plumber makes its money. So to run the shop for a 9 hour day we have 9 x 249.59 which is $2246.31 per day to meet expenses. Speedy Plumbers has 4 service vehicles so that is $561.57 per vehicle per day to meet expenses. Each service vehicle can bill approximately 5 hours a day, so $561.57 divided by 5 equals $112.31 per billable hour that Speedy Plumber needs to generate to keep the doors open. Right now you may be saying "wow I had no idea", that's alright most people don't. a few more paragraphs.
The observant student by now will have noticed that we have omitted
a few things from our company's bottom line, we admit it was intentional. Missing from the hourly cost are advertising and a
modest profit for the company, after all that's why companies are in business isn't it?
Speedy Plumber needs to advertise so you can find them, a wise man once said, "If you don't advertise something terrible will happen,..... nothing". Speedy Plumber has 3 phone directories in his city so he figures that he needs to be in all 3, he also reasons that if he goes with the full page ad he'll attract more attention, so he does, this translates into $10,500.00 per month in advertising expenses. hour for advertising so we will ad that into our previous per hour amount and come up with $209.23 per hour. Well we haven't made the company any money yet so let's add in a modest 15% profit margin for a grand total of $246.15 per hour. Most of you reading this article will by now be saying things to offend me, that's OK, I know it's a shock but it is the truth. Please, if you don't believe me run the numbers for yourself, set up a mock company and run the numbers, you'll see.
We've come all this way to see that a company with full page ads has a very heavy burden on it just to make expenses. We haven't even touched upon the double page ads. Why would you want to pay for that not take notice of a company that is wise with your money and stays away from those money sucking large ads? A company that advertise more on the internet and with small telephone directory ads and relies on word of mouth referrals because they are dependable and do good work.
The time to look for any trade is now, not when you have an emergency. You don't want a company that spends money foolishly on "shotgun" marketing hoping to find someone in dire need who is not in a bargaining position, they have you over a barrel when you do that. Find a small company that has 3 to 7 trucks (1 man shops are usually good craftsman but not real good responders because they tend to get overloaded) so they will be able to respond to your needs when they arise. Find a company that takes a
more "Spartan" approach to running the business end of the plumbing
company, this will save you money in the long run. Make sure your
plumber is licensed. I'm not talking about the shop here, I'm speaking of the person that comes to your home to repair your problem, make sure he is licensed, it is a mark of professionalism. Make sure the company carries adequate liability insurance so your home is covered, make sure the company has workman's comp. insurance so you're covered. Most importantly talk to the plumber you find, them, invoke the golden rule and treat them as you would like to be treated and you will not have to worry about your plumbing system.
I hope this short article has helped clarify the method in choosing a plumber for your home.
Remember "The Plumber Protects the Health of the Nation"
Thanks for taking time to read this article and please watch for more articles in the future to help you keep your home and your wallet healthy.
This article is by: Ted Melko (Master Plumber) of The Plumbers Inc. visit us; www.theplumbersinc.com
About the Author
Currently residing in Atlanta GA
Involved in the plumbing industry for over 25 years.
Licensed Plumber in Chicago
Master Plumber Cleveland Oh
Master Plumber Unrestricted State of Georgia
Married for 24 years, 3 children
Owns The Plumbers Incorporated in Atlanta GA.
Currently on the Board of directors for the Georgia Plumbing and Mechanical Association
Member of the Plumbing Heating and Cooling Contactors
Member of the Quality Service Co
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