Contractors

When Plumbers Eat Their Own

Being a plumbing contractor is lonely. Sure, there are people around, but not peers. The people around you, whether they are your plumbers, office staff, or suppliers are employees. They do not understand the challenges, responsibilities, and burdens of meeting the payroll of a plumbing company. This is where contractor groups can help. Broadly, there are three types. One or more should be right for you.

Associations

The oldest type of contractor group is a trade association, such as the Plumbing Heating Cooling Contractors. Trade associations began forming generations ago when plumbers needed to band together to counter the growing influence of trade unions, of utilities, and of government. Trade associations also try to influence codes, standards, and take on an education role.

Associations exist at the local, state, and national levels. Local associations, which are often chapters of state or national groups, offer the advantage of local meetings. The ability to meet with other plumbers face-to-face at regular meetings is one of the greatest benefits of association membership. The most successful plumbing contractors are the ones most likely to share their experience and insight with others, even if they are competitors. They know that helping other contractors helps everyone and that competitive advantage is gained by execution. Knowing what to do is not the same thing as doing it.

There are other business associations contractors might consider. These include the local chamber of commerce, local general business associations, networking groups, service clubs, and national organizations like the National Federation of Independent Business.

Even when they join local associations, plumbers often struggle to find the time to attend meetings. They should make time. Business is built on relationships and all of these foster the growth of relationships.

Independent Contractor Groups

Because contractor needs vary, independent groups have formed to help contractors address a specialty area, such as hydronics and radiant heat, or to help contractors with business practices in general. Required investments in these groups ranges from nominal amounts like the Service Roundtable’s $50 monthly membership to more than $50,000 a year for some of the best practice groups. When evaluating these groups, it is not the investment that matters, but the return. A $10,000 investment may seem like a lot, but not if it returns far more than $10,000 in gross profit.

One of the biggest advantages contractors find of independent contractor groups is the ability to associate with the industry’s most successful contractors. Success is contagious. Entrepreneur, turned motivational speaker, Jim Rohn said, “You are the average of the five people you spend the most time with.”

The independent groups are known for business training. Whether it is understanding your financials or sales training for field service people, these groups focus on helping plumbers become better business people. Many will also provide recommended best practices and business processes that can be modified and applied to fit any plumbing company.

While not the primary focus, independent contractor groups usually feature a buying group. Plumbers who shift their purchases to a group’s preferred partners will often find the savings and rebates are more than sufficient to cover the investment in membership. Moreover, plumbers often find some of the new innovations in products and services among a group’s preferred partners because the groups have reputations for moving the needle and are thus, approached first by companies seeking to break into the market.

Each contractor group has its own personality. It is important to evaluate the group for personal fit as much as for the offering. All of the groups offer good training and material, but not all of the groups are a good fit for every contractor’s business philosophy.

Franchises

Finally, there are the franchises. Franchises are expensive, requiring an upfront investment and ongoing payment, typically as a percent of sales. However, with a franchise, many of the decisions facing a plumbing contractor are already made, such as branding, truck wraps, forms, literature, and so on. Franchises also offer more tightly defined processes.

For a plumbing company just starting, a franchise can provide an excellent boost to advance farther, faster. Established companies must weigh the benefits of replacing their existing brand with the franchise’s brand. Plumbers should also understand that any investments they make into local brand equity for the franchise is theirs only as long as they continue to pay their franchise fees. Typically, they will be locked in for a ten-year period. Of course, franchise fees are partially offset by the franchise’s buying group.

Like contractor groups, the franchises each have their own personalities. Fit is incredibly important due to the contractual obligations. If joining an association is like dating and joining an independent contractor group is going steady, then joining a franchise is like marriage. A bad marriage is miserable and divorce is messy and expensive.

Get started by joining a local association and then, the Service Roundtable. Visit www.ServiceRoundtable.com or call 877/262-3341 to learn more.

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