Consultants
I have seen many changes in the industry over the years, most do NOT benefit the customer. Lately plumbers have been bombarded by calls from “consultants.” They think they know my business better than I do and tell me, among other things, that I am not charging enough.
As a business owner my first thought is always about you, my customers, and how I can make it better for you.
Old School Pricing
The old school way is to look at your business over a year, take all your expenses and break them down to what they cost you per hour. These are your direct labor (your plumber’s), your indirect labor (your office personnel, your delivery drivers, your shop guy) - you get it. Then all the other stuff - like the trucks, fuel, insurance, phones, advertising, accounting, legal licenses, education - the list goes on. Then you try to make a fair profit so you can grow a little or replace some equipment. Fair in most cases is about a 30% margin, if you make 15% you should be doing okay.
Hourly or Flat Rate
Most small plumbing shops are hourly with some flat rate items with a small service call fee to cover vehicle and fuel expenses. It is typically easy to figure things out. The plumber is paid by the hour, and they are focused on fixing the problem at hand. It has been my experience that small business plumbers are better trained in the repair aspect and the owners are more in tune with the customers. The plumber is paid a good living wage and the customer is charged an affordable rate. If the owner truly cares, he prioritizes his workers and customers. It's not just about the money. They make a fair profit without gouging customers.
New School Pricing
New school takes in the same expenses, but the profit margins are crazy, 50 to 100%. I don’t know about you but it’s a hard pill for me to swallow and I also like to sleep at night. So, for this reason hang on as I reveal the twist and turns of the plumbing service industry and what to think about before you call your next plumber.
Flat Rate
Most larger plumbing companies are going flat rate. In my opinion, they feel they need to be a monetarily driven business where it’s all about the money. They feel they have to get every call done the same day that it comes in. So they run every call like it’s an emergency call. This takes huge amounts of manpower, thus driving their overhead through the roof. To fill these positions they do not always get the most skilled plumbers. They also don’t train them in fixing the problem, or the skills needed to do so. They usually pay them a lower hourly wage and commission or an industry term spiff. A lot of the time you feel like you’re getting a better deal from a high-pressure salesperson than you are. That’s where a lot of these companies concentrate on training their plumbers. They try to teach them to sell everything they can because they won’t be coming back. Then when you ask them to break down the bill most will not... they will say "it’s all inclusive".
The Customer is Still King at Bee!
I want to take this opportunity to thank you for your patronage and loyalty. I want you to know you can always count on Bee Plumbing to provide quality work at a fair price, the Old School way!
Thank you!
-Scott Swanson
