At Affinitas, we’re good at plumbing.
We can’t fix a blocked drain or install a water reticulation system – but we are very experienced when it comes to the understanding the accounting and business planning needs of the plumbing industry.
It is this experience and knowledge that has allowed us to build some of our most successful client relationships with plumbers. In coming weeks, we are going to further discuss some of these knowledge areas and profile some of the different plumbing businesses that are part of the Affinitas family of clients.
These knowledge areas will include:
Digging Into The Detail
Plumbing businesses are NOT all the same.
Some focus on home repairs, some on home building and others on large commercial projects. The size and scale of plumbing businesses can vary greatly depending on these areas of specialisation – from a one person outfit with one or two apprentices, to a large scale operation with admin staff and a team of sub-contractors. Some are generational family businesses and others involve a partnership/co-ownership arrangement. Taking the time to understand the current set up and the plans for the future can make sure the best decisions are made around your business structure and resources.
Building Solid Foundations
Whether you are starting a business or buying a business, business planning and understanding the needs of your market is an important starting point. The tax structure of the business (sole trader, company, trust or partnership) must suit the type of business being run, the number of owners, plus the potential cashflow and profitability. Then accounting and bookkeeping systems need to be installed that suit the size and scale of the operation. If you are a good plumber, you should not be trying to turn yourself into a bookkeeper.
Instead, you should be outsourcing and focusing on the skills that make you money.
Drawing In Business
Plumbers, like any other business, must advertise and sell their services to those who may need them. But, like many tradespeople, plumbers are often much more comfortable fixing a blocked S-bend than putting together a marketing plan. But understanding your potential customers, where they source information and how they make decisions is vital. Getting your marketing mix right can be a key to success. Getting it wrong can see a lot of money head down the drain.
Pushing the Button On Technology
Even for a very small set-up, employing smart technology can drive efficiencies that will save you time and money. Portable EFTPOS payment options on your phone or tablet can allow clients to pay immediately, for example. There are also all sorts of apps that help you track expenses, monitor mileage and even efficiently schedule your jobs. Modern bookkeeping systems can be attached to your business bank accounts too.
These can provide a daily snapshot of your business financials and facilitate an efficient and effective working relationship with your admin staff and external accountants.
Not Letting Money Leak Away
Pay attention to cashflow planning, air-tight quoting, efficient invoicing and prompt debt recovery. Plan for capital equipment upgrades and payment of staff wages, superannuation and tax obligations. Knowing what to do in these areas will make sure you are properly pricing your jobs to produce the right gross margin and net profit.
No point in winning work that isn’t profitable.
Nailing The Big Picture
When you go into business, you need to start at the end. Why are you in business and what do you wish to achieve for yourself and for your family? Write this down and always revisit your business progress in light of these goals. This is what business planning is all about. If you are not making progress towards your goals, then you need to question whether the business is healthy. Or whether your goals remain relevant?
In coming weeks, we’ll dig into further detail on these subjects. Plus, we’ll talk to some our plumbing clients working at the coalface. Stay tuned.