Tommy-Lee Zmuda, installer and founder of The Boiler Business, explains why it’s important to prepare the groundwork fully before thinking about expanding your business.
Building any successful plumbing business is a long and often complicated process, with thousands of different factors unique to that business. The type of services to offer, the location, the experience, the financial situation, and home life of the people within the business.
Like in any complicated situation, it is best to try and break things down into specific topics, then group together to create a structure that is easier to understand. When discussing business development for plumbing and heating engineers, we often point out that, in its purest form, there are two main sides to your business. That is marketing and systems.
Regardless of how good your marketing is, with no supporting systems, your business can only get so far. Equally, a company with fantastic systems will struggle to grow without marketing and finding new clients, while also retaining its existing customers.
Most people jump into marketing as the only route to business growth, then finding they need to improve their systems to cope with the higher demand that comes. You will hear many times a phrase similar to this: ‘From the outside, it looked solid to others, but on the inside cracks started to appear’.
Growing your business too quickly without robust systems in place, built on solid foundations, could lead to an unforeseen event toppling it over. Think the Leaning Tower of Pisa!
Systems, systems, systems
As you build your plumbing business, you will be creating new systems all the way through it. The way you provide quotations, order stock, organise the teams, take payments, file paperwork, and follow through to customers with future service offers. There are so many systems it is hard to keep track that everything is being done all of the time.
Most sole traders will keep all these systems in their head. As a result, when the business grows, and the team expands, productivity is restricted as every decision must go via the business owner. Writing down your systems or recording quick videos for others to learn is the first step towards a business that can run without you.
So, let’s break systems down into three core subjects:
The customer journey
What are all the front-facing systems that the customer sees and notices? Try to imagine every point your customer has contact with you from the initial phone call to the signing off and final invoice. This is the stuff that they care the most about and should be the first system that you put in place or improve.
Many will be thinking that your website falls under the marketing side of your business. Yes, a website’s primary focus is generally for marketing purposes. Still, a well-planned website will also integrate into the business systems.
Plug-ins that allow customers to fill in contact forms have been around for years, but customers booking their service slot is becoming more and more common practice. This is an automated system that will save business owners time while improving the customer journey and perception of that business.
The days of a mobile phone number and your @hotmail.com email address are over. With the advancement of technology, it is quick and cheap as chips to get your own 0800, 0330, 01234 Geo number routed to your mobile with a professionally recorded greeting voice. You can buy a domain hosting for peanuts. Set up your own name@mybusiness.com in 20 minutes and then use email platforms, such as MailChimp, to remind your customers to book their annual boiler service.
Improving your customer journey is customer service. Why not challenge yourself this weekend to improve your customer service by writing down some simple procedures. Starting with one page only describing the following: survey and quotations; the installation process, payments and registrations; and a complaints procedure.
Back-end systems
Back-end systems are those that your customer doesn’t really care about or realise even exist. They can be simple as a van checklist, or as detailed and complex as your Customer Relationship Management (CRM) system. Often back-end systems will connect to each other, such as your CRM with your Quickbooks accounting system. Or perhaps your website is hooking up with your Google Calendar which notifies your phone when a customer books a service online.
The thing about systems is that there seem to be no boundaries to what is possible if we can identify the areas to improve. But, to get started developing your systems, we would advise using the pre-existing setups that others in the industry are using. It might be to improve the way team members communicate on job progress. Or, perhaps, log your test/survey results in a particular way so that the office has no need to call the engineers for clarification.
Systems could take five minutes to set up, or six months of development. Other than the simple van checklist and the essential CRM, consider how a sales pipeline could work. What about collecting marketing and sales data?
It is all about saving a small amount of time on every task that you must do regularly. The compound effect of these modest gains will create a stronger and more profitable business.
Team and network
This is the last piece of the puzzle. Rushing to grow your team, rather than building your business first, is the most common mistake in the trade industries. If the other jigsaw pieces are not in place first, you may well find yourself in the expansion trap.
A business taking on staff too early as they think this is the only way to grow their empire could be wasting years of time and vast amount of money.
How does this happen? Why so drastic? Simple, staff are the most expensive overhead you will have. They are far more expensive than the tools, the vans and that new all-singing, all-dancing website that links seamlessly with your fancy CRM system.
Remember with more staff, come more volume, more quotes, more work, and more risk. Although another engineer may help bring in another £250k in turnover, that is just half of the equation. VAT, materials, wages, pensions, taxes, tools, vans, and other costs all have to be calculated. Without a ‘systemised’ business, you may find that what cash is left over as net profit after tax, is not worth the added effort that you must put in.
Finally, when you have built and developed your foundations, marketing and systems to a sufficient level, it is time to take on more staff – knowing that your numbers are tight, your marketing is predictable, and that the people that operate your business systems execute your plan as you designed it.
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