Anne Timpany, Director at On Tap Plumbers, explains how plumbing businesses are in an advantageous position to weather the storm of an economic downturn.
I firmly believe that, no matter what the economy is doing, plumbing is one of the few professions that is recession-proof. No matter what, people will still get leaks, boilers will still break down, and drains will still get blocked.
Manual trades cannot be replaced by robots, and plumbers have a clearly defined purpose and, unlike most white collar workers, they control the delivery of their service from start to finish. However, that doesn’t give plumbers an excuse not to keep on top of their game. Just like a house, a business needs solid foundations and regular maintenance to survive and thrive.
Although plumbing is an industry that can weather an economic storm, there is still a high rate of insolvencies during an economic downturn, which we are experiencing at the moment due to the Brexit vote.
In April 2019, the Insolvency Service released a report showing that in the first three months of 2019, company insolvencies in the UK were the highest they’ve been since 2014. The construction sector has the highest level of insolvencies and was up 0.6% from the 12 months ending Q4 2018.
The Federation of Small Businesses found that small businesses are spending approximately 15% more on expenditures than they were six years ago, partly due to rising employment costs, high business rates, and taxes.
On top of these, you also have rising material costs due to Sterling dropping in value, a trend which is expected to continue. With the government’s ambitious carbon targets, plumbers also have higher taxes on uneconomical vehicles to consider.
There are some benefits to plumbers during periods of economic uncertainty. Since the Brexit referendum, homeowners have decided not to move to larger properties, especially in expensive areas such as London, instead choosing to renovate and extend their existing properties. Although there is a decline in construction works, maintenance and repair services will remain steady.
In such uncertain times, it’s important to run plumbing businesses professionally and offer customers excellent service and value for money. Raff and I started On Tap Plumbers in the middle of the last recession in 2009 and we grew rapidly, nearly doubling our turnover each year.
We were determined to set our business up with customer service as the main focus. Our mission throughout our 10-year history has been about raising the standards of the industry and growing a brand that people trust. By not only declaring this but also delivering on our promise, it propelled the growth of the business.
Now more than ever it is a time to start thinking strategically about your plumbing business. On Tap Plumbers started as a 24/7 all singing, all dancing service, but it didn’t take us long to realise that by being strategic and targeting plumbing work in growing areas we would be more successful.
We opted to take our business down the commercial construction route and away from the domestic market as we saw the opportunities with the London landscape changing and multiplying in line with the need for more homes.
The plumbing businesses that will weather this economic storm are the ones that are professional, deliver excellent customer service, and think strategically. The current economic climate can be viewed as a negative or, if you start to look at the opportunities it gives, then you will be a step ahead of the rest.