You started a plumbing business because you wanted to work for yourself. And, you wanted your work to result in more income. But, profits are not what you expected. How can you make your plumbing business more profitable? Profit in any business depends on having a client base, generating a revenue stream, and converting that incoming revenue into steady profits. While you may be an excellent plumber, you need more to have a profitable plumbing business. You need to be able to manage the business side of operations as well as you do the plumbing. Here are three easy ways to make your plumbing business more profitable.
Plumbing is a local business. You are not going to travel to another city or across state lines to fix a leaky pipe. First and foremost, you need to get the attention of folks in your community. You need a website that lists your services and provides a way to contact you. And, you need to make sure that your site's SEO (search engine optimization) is such so that you get decent ranking in the search engines for folks who are looking for a plumber in your community. Then, you need to make sure that you show up for searches from folks in your community who enter the name of your community or one of its neighborhoods in their Google search. Today's plumbing customer is more likely to look on the internet for a plumber than consult the Yellow Pages or ask a friend. Make certain that your marketing is focused on being found on internet searches that specifically mention plumbing issues and your community or neighborhood. The most important part of this is to use "Google My Business." This is the listing that appears at the top of the Google search page when you enter "plumber" and the name of your community. You want to be on this list and as high on the list as possible.
There is nothing magic to getting high ranking on the Google My Business listing. According to Google, the most important part is to enter complete and accurate data when you set up your Google My Business account. And, keep your information up to date. This info includes your physical address, phone numbers, business category, and attributes of your business.
Make sure that your hours are always accurate including over holidays, which means learning how to edit your hours and always doing so when necessary.
In addition, Google's software tracks your presence on the internet. This is not only your website but reviews that users leave about your business. A continual stream of positive reviews indicates to Google that you are doing good work and deserve high ranking. Learn how to create a link on your site for customer reviews.
Photos are important when someone is choosing to come to your business. Google likes them as well, so include photos in your Google My Business listing.
And, when you publish more information about your business on directory sites, have lots of reviews, and get positive ratings, Google sees your business as being prominent and rewards that.
Too many small businesses, including plumbing businesses like yours, generate decent revenue with their work but don't end up with much profit to show for their efforts. Is that happening in your business? If so, what are the problems and how can you fix them. At Exigo Business Solutions in the Kansas City area we are not only the top accounting firm in the Kansas City area but also work with our clients to track down and solve troublesome business issues. We are Fix This Next coaches. Fix This Next is the efficient way to find basic business issues that are hurting your profits. The system starts by tracking down the core issues that are causing you trouble, fixes them, and sets up systems to track those problems so that they never return to drain your profits. While you are an expert at dealing with plumbing issues, you may need help with the intricacies of running a business. We are happy to work with you set up bookkeeping systems that track your finances and alert you to problems that need to be fixed as well as opportunities waiting to be exploited.
The real reason you do bookkeeping is not simply to keep track of the numbers. The reason for keeping your books is to understand exactly how your business is doing financially. At Exigo Business Solutions we use the Profit First method and make certain that our clients understand the difference between their income and their real revenue. By using this approach we can help you see the size and true scope of your operations which may not be clear when you simply look at your top line total income.
Your total income is the top line revenue in your business. It includes all sales. It does not include your costs of materials and subcontractors. That number is real revenue. when your plumbing business has material and subcontractor costs in excess of twenty percent you need to use real revenue as a measure of how well you are doing.
When you focus on incoming cash flow, which is your total income, you can be fooled into thinking that your business is bigger and more profitable than it really is. When you include a real revenue calculation, you get a better picture. And, then you can take a critical look at the jobs you are taking, what it costs you to do them and just how much profit you are seeing for your time and effort. We encourage our clients to use bookkeeping software like QuickBooks Desktop or QuickBooks online so that they can generate custom reports. We can help you set up these reports so that you can do better cost-accounting on individual plumbing jobs, gain more insights into your costs of materials and outsourced labor, and run the business side of your operations more efficiently.
Your bookkeeper may be tracking your gross profit which you may believe is telling you want you need to know. But, while gross profit includes the cost of goods sold it does not include the costs of materials, subcontractors, project-related travel, shipping, and other project-related overhead.
Because these are real expenses that you are paying, you need to know to what degree they are eating into your profits from any given project or from your whole operation. If these figures are not handled correctly in your bookkeeping, you can easily get fooled about the size and scope as well as the profitability of your plumbing business. This is a good example of how outsourcing your bookkeeping can pay for itself when you outsource to professionals like Exigo Business Solutions in the Kansas City area.
The Real Revenue calculation is this: total income minus subcontractors and materials. If you would like to explore this further and get a better handle on the profitability of your plumbing business, contact us at Exigo Business Solutions today.
Too many business owners get used to working hard and then wishing for profits at the end of the month. The problem is rarely that they are not working hard enough or that they don't know their trade. Rather, it comes from hidden business expenses that fly under the radar as you are focusing on the major theme of your business, doing excellent work on plumbing problems. An excellent way to fix the problem of wishing for profits is to make them a habit with a system called Profit First. The first thing that you will when you use Profit First is that you are banking a profit with each pay period. Then, you will use smart accounting software and tools like QuickBooks Custom Reports to track down hidden expenses and cut them out. The end result will be that you do a better job managing cash flow and budgeting and always have a profit to show for your efforts.
At Exigo Business Solutions we work to help our clients improve their business operations. The basis of this is good solid bookkeeping and accounting services. We can help you with these jobs either in-house or you can outsource your bookkeeping to us and the eventual savings very often allow you to save money in the process. The benefits to you from using systems like Fix This Next for sales or Profit First are such that they make your plumbing business more efficient and more profitable. We can apply our years of business expertise to help you improve yours. We call you when we need a plumber. Contact us when your profits are lagging.