Your plumbing business has plenty of work in new construction as well as a steady stream of leaks and clogged drains to fix on an emergency basis. This provides a steady income. But, what if you would like to increase your profits? Does it pay to specialize in your plumbing business? Can you find enough work in areas like installing natural gas lines, laying water lines, or fitting the lead shielding in a hospital radiology unit? The master plumber with extra certifications who does this work will command a higher salary than an apprentice or many journeyman plumbers. While doing plumbing is your business, helping make business decisions based on financial considerations is what we do at Exigo Business Solutions, the top accounting firm in the Kansas City area. Let us help you make sound business decisions that will maximize your profits. With greater profits in mind, two considerations to start with are to outsource your bookkeeping and to adopt a more profitable way to do the books as well.
The more common reason that a plumbing business will outsource its bookkeeping is to reduce costs. Unfortunately, cheap bookkeeping is often rather useless bookkeeping. Hopefully, your bookkeeper will get the numbers right but will they furnish you with the information in an understandable and usable form? In a competitive business world, you need to know how well you are being paid for each of your jobs, how well you are tracking and controlling expenses, and how productive your employees are. When you use a true professional, outsourcing your bookkeeping pays for itself in terms of better-paying jobs, lower expenses, and fewer financial headaches. With outsourced bookkeeping and the right tools, like QuickBooks bookkeeping software, you can get custom reports that will tell you the optimal mix of regular plumbing work and specialized work to aim for in order to see the best profits.
When you find the right mix of new construction, emergency repair work, and specialty plumbing, you should have good cash flow. But, will you have profits? At Exigo Business Solutions we will introduce you to a unique method of bookkeeping called Profit First. With the Profit First method, you will first of all start allocating profit to a bank account the first month that you use the system. Then you will learn and use fiscal discipline to bank not only profits, but also owner’s pay, taxes, and operating expenses each and every month. The key to the Profit First system is that you will not treat profit like something to hope for but rather a habit to get used to. With Profit First you will then take a hard look at expenses, using the bookkeeping professional you have outsourced for. With clear reports that you can act on you will improve your budgeting, cash flow management, and job selection. You will find exactly the right mix of specialty work that pays the best for your business in your area.
Getting back to our initial question, does it pay to specialize in your plumbing business? It certainly can, providing that you team up with a bookkeeper who will provide you with the insights you need to make the right choices of plumbing specialties to get into and the right jobs to take.
For help with business decisions that affect your bottom line, contact us today at Exigo Business Solutions in the Kansas City area.
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