7 Lessons I Learned Running a Plumbing & Heating Business for 10 Years

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Today we’re going to be talking about seven lessons I learned whilst running a plumbing and heating business for 10 years.

To give you a bit of background, I ran a plumbing and heating business with my partner for 10 years. And during that 10 years, we experienced the whole range of problems that I’m sure lots of other businesses experience, everything from financial difficulties to trying to make a profit to customer service issues, to finding the right staff, keeping the staff and dealing with the fallout when they leave after they get their qualifications. We also have things like leaks, and also the occasional dog bite to throw in as well. So I learned a lot from that 10 years of business, and I wanted to share that with you.

1. Use the Profit First System

The Profit First method encourages you to prioritise your profit and pay yourself first and only work with the money that’s left for your expenses. In practical terms, you take the money that’s coming into your business, and you put it into predetermined percentage pots for each of the big costs.

For example, you take 15% of your revenue, and you put that into your profit pot first, and you take 25% for tax, and you divvy it up so that you have all of your money put aside in pots, and then whatever is left is for your overheads. This means that you always work to what you have left and you’re never overspending. It also means that when you have a big bill that comes in, you have the money put aside already to pay for it.

The benefit here is the peace of mind that you get from knowing that you can pay all of your bills on time, and you’re going to be getting the profit that you deserve from your business.

2. Choose a modern bank

If I was to set up another plumbing business in the future, then I would set it up with perhaps a starling, Monzo, or tide bank account – basically any one of these challenger accounts that allows you to set up pots within a single account.

This means that your bookkeeper is going to love you because you only have one account, but you’re still able to follow that profit first methodology – and that’s really important for simple accounting. But at the same time, you’re only looking at the money that you have leftover on a daily basis and you’re not looking at your total account sum. So that’s really important for being able to focus on the money that you have left.

3. Plan properly for big fixed costs

I would plan properly for big costs. So if I were to do this all over again, I would sit down and do some proper risk planning and make sure that we had an emergency fund.

I would ask myself questions like how many months can we survive with no or less revenue coming in? What are we going to do if one of our key members of staff leaves or gets taken ill? so that we would be better prepared for that kind of eventuality.

4. Set boundaries

I didn’t really understand the concept of boundaries when we started the plumbing and heating business. But basically, it’s the idea of deciding what you’re happy with, and what you’re not happy with.

I’d recommend that you decide in advance what hours you’re going to work and the hours you’re not going to work, the work that you want to do, and the types of work that you definitely do not want to do.

Also think about things like how and when you’re going to take holidays and time off.

The next thing you have to think about then is how to protect these boundaries. You can do that in a number of ways –  By communicating your hours clearly; Communicating the services that you offer; Making sure you’ve got little things like having a separate work phone.

5. Invest in a separate work phone

Have a separate work phone from day one.  The primary reason for that is because you don’t want to have to put your personal phone number all over the internet, plus you also don’t want it saved in your customer’s phones, because that can be really difficult to change.

The other benefit of having a separate work phone is that you can more easily protect your boundaries. For example, you can put it on to voicemail after hours, or you can send it off to a call answering service, and not interfere with phone calls from your friends and family.

6. Tips for working with a partner

Now this partner might be a romantic partner, or a friend, or some other person that you’ve met through the industry.

I think the rules are all the same for whatever type of partner it is you’re working with.

Having spoken to a lot of other business owners about this, I believe that the best way to manage working with a partner is making sure that you have clear responsibilities and basically separate departments. This means that each one of you can play to your strengths, and work to a clear division of responsibilities and take ownership for that.

The other thing that you can do when you’re working with a partner, is to decide in advance how you’re going to communicate your progress. Are you going to have regular meetings? Are you going to talk to each other weekly or monthly about the things that are going on in your area or your department or about the decisions that need to be made?

The other thing that you can do is you can decide what you’re going to do when you can’t make a decision. What happens when you just can’t agree? What decision-making framework will you use? How will you solve these disagreements? By deciding that in advance, coming to terms with the idea that there are going to be times where you don’t see eye to eye, and having a plan for how you’re going to tackle that, you’ll have a much easier ride.

7. Create a knowledge base

This is something else I wish we’d done from day one.

For my second business – my Job Management and Business consultancy, I now have a database of basically all of the tasks that I do in my business, and how I do them. This is mainly just a list of lists –  It’s a set of bullet points for each thing that I do in my business and how I do it.

This means that you’re basically building a list of instructions as to how your business is run. By getting into the habit of doing this from day one, it means that it doesn’t feel like a big deal. And you don’t have a whole ton of instructions to write when you’re ready to expand.  This can be everything from the script that you use when you speak to your customers, to specific plumbing jobs and how you do them, to how to quote for a job to any of the admin tasks.

The benefit of doing this is that once you’ve got these things written down, you can start to optimise those processes, you can add time-saving options, you can put all of your equipment in one place so it’s easier to get hold of next time… you can get an extra bit of equipment or maybe create a template or write another email that goes to customers.

The other major benefit is that it means that when you’re ready to expand your business, you can easily delegate those tasks to other people, because you’ve got a list of instructions as to how to do every part of the business.