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Running a plumbing and heating business is hard. Together We Count are fortunate to look after the accounting function for plumbing and heating businesses of all shapes and sizes.

Over the years they have identified a few key traits that really help business owners take their trade to the next level. This blog is here to provide you with exactly what these key traits are.

1. Have solid terms and conditions in place.

It’s one of those things that you normally realise in hindsight; after a client has complained or pointed the finger. It’s important that you have your terms and conditions in place before that happens. Together We Count can give clients’ access to Markel Law Hub where you can download standard templates for terms and conditions.

2. Agree on a price upfront.

Most businesses base what they charge on price of materials, markup, plus an hourly rate. They’ll go to a property, diagnose a fault, repair the fault and then give the client the bill. The problem with that is the client hasn’t already agreed to the figure that you’re presenting them with. It is advisable to provide your customer with an estimate prior to doing any work.

For example: ‘That’s going to take me three hours and the part’s going to cost me £50. I’m going to charge £75 for the part, therefore, I know this job is going to be charged at X amount plus VAT.’

Once the quote is agreed the work can start, this way the chance of a price disagreement occurring is greatly reduced.

3. Give your client options.

Give options with different prices. The golden rule on this is to always give three options: a bronze, silver, and gold package. If you give customers one option, then that one option can be quite restrictive, two options aren’t enough for a comparison and four options can be too confusing.

By providing three options, your customer will find the buying process a lot easier. Research has found that 70% of the time they’ll go for the middle option.

Let’s say a distressed customer calls you because their boiler has packed in, in the middle of a harsh winter and they need a quote ASAP. An example of the different quotes and their variations you could provide are as follows:

Example 1

A repair to the boiler
A like-for-like replacement of the boiler
Uprade to the boiler and heating system

Example 2

New boiler with no extra service
New boiler with standard aftercare
New boiler with top-notch aftercare

Example 3

Low-range boiler
Mid-range boiler
Premium-range boiler.

You should never assume what a customer is willing to pay or what option they want to go for. Preconceived ideas can often be completely wrong and you’ll frequently being surprised.

If you don’t offer a customer a premium service or boiler, then they can be left blind-sighted as to what you can do for them, this means that money is left on the table. Don’t leave money on the table!

4. Get deposits

As a general rule, if you’re doing work over the value of £500 it would be a sensible idea to request a deposit from a customer, especially if this your first time doing business with them. Going back to the previous point of agreeing a price upfront, they would have already selected and agreed on a price package. You now have the power to resume control of the relationship financially, by obtaining a deposit to secure the installation date of the work. The deposit amount can be entirely up to you and can just cover materials if need be. Together We Count have found that plumbing and heating businesses who obtain deposits have much better cashflow than those that don’t.

For some customers parting with deposits can be daunting because they’re paying upfront for something that hasn’t been completed yet. In order to alleviate that worry in your customers’ eyes, it’s very important that you offer promises and guarantees.

5. Promises and guarantees

You can have simple promises like a ‘turn up promise’; “I promise I will turn up to your property to do the work on the agreed date”.

You can also guarantee your work. “We guarantee the work that we have undertaken for X number of months/years”

This reassures people that they can rely on your word and promise, which will help you stand out from the crowd. Clearly communicate your promises and show people that your business is upstanding.

6. Do a f**king good job!

It’s very important as a trade business that you do a good job, deliver on your promises and turn up when you say you will. It’s also key to be respectful of people’s homes, their pets, their family and their life. Use dust sheets, clear up after yourself and make sure your shoes are clean or wear shoe protectors.

Think of future business; by doing a good job the customer will return. When you go to a customer’s house, think about how can you can conduct yourself to ensure that you’ll be invited back for future work.

This way of thinking could open your mind to wonderful ways of working that’ll ensure that you serve your customers better.

7. Save money for taxes and growth

Together We Count’s number one rule in business is “your money is not your money!” There’s always someone or something in business that needs paying; whether it’s a supplier, a tax bill, a marketing campaign or a brand new tool. So it goes without saying that you shouldn’t spend more money than you have. You need to save for taxes as you go. Often businesses get caught out and are unsure of how much to budget for taxes. The general rule is, if you’re taking money out of the business you need to save as and when you take money out.

If you’re taking money out of the business, you’re probably taking the profit out of the business. That profit is something you’ll later be taxed on and that is something that you’ll need to save for.

For personal earnings, known as drawings being withdrawn from your business, you will need to set aside 25% of what you are taking out. Here’s an example: Instead of paying yourself £1,000 you actually need to pay yourself £750 and transfer £250 into another savings account which is going to be saved for corporation tax and tax on dividends (if you are trading as a limited company). This is a general rule. Save as you go!

In regards to saving for VAT, set aside 10% of total bank receipts (this is for a standard domestic service and installation plumbing and heating business). Then put this money in a savings account and don’t think about it or touch it until your quarterly VAT bill comes along.

8. Don’t be afraid to reach out for help.

Business owners that are open to listening to their peers and execute the teachings from various mentors, see massive improvements in their operations. Don’t be afraid to listen to other people, especially those who have been there, done that and got the T-shirt! Ultimately, business is a constant journey where you’re learning new things. Some of the things that you learn might be relevant at difference stages of your business’s development.

Having a business mentor can be costly, but so can diving into something new, without thinking about all avenues or discussing ideas in an open environment. Would you rather spend money on advice or lose money on a sinking ship?

Surround yourself with a solid network of key persons of influence within your sector, have an open mind and block out time to work on your business.

9. Horses for courses

Stick to what you know. Do what you can do and don’t do what you can’t do. Utilise other people’s skills to ensure that you can hyper-focus on the areas of work which you’re great at and you can be highly paid for.

If you’re no good at doing the admin work, hire an admin assistant. Similarly if you’re no good with data, hire someone who can eat data for breakfast! Obviously, your business needs to be financially able to do this but even though you’re spending money, you’re saving by hiring someone else who can do it better, faster and more efficiently.

10. Systemise everything

Last but by no means least, have a system in place for everything. Embrace technology and adopt customer relationship management (CRM) and accounting software. Well written systems, processes, standard operating procedures (SOP’s), templates and guides will ultimately lead to a business that runs itself, not a business where you, the owner, tries to do everything and burns out rapidly.

Many of the key points mentioned in this blog are explored in greater detail in Aaron McLeish’s book: The Quote Handbook.

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10 bits of advice for any plumbing and heating business