# Secrets to Success



## OldSchool (Jan 30, 2010)

I noticed to a lot of members are new as buisness owners.

Here are a few tips to become successful

1. Build a relationship with your clients ( most of my clients become great freinds) these relationships will give you continued work and referrals.

2. Referrals are worth more. You can charge a higher rate on referrals than just cold calls. A referral has already gained your trust.

3. Dont be afraid to charge a high rate. Most people belive that the more they pay the better job they will get. And more than likely they will. You now have the money to take your time and do the job right.

4. Profit is not a dirty word. Your charge out rate should cover all your expenses, overhead and labour. Then you should still have a profit afterwards.
How much profit? Minimum pofit should be $ 20 to $ 30 above what went out.

5. Get a credit card or bank card processing machine and collect on the job when you have completed. ( most people will pay by credit card and not question your bill). We have wireless processor in all of our vans

6. Do not extend credit with your own money. If client does not have money find that out first. Always ask if some will be there to pay the bill.
Find finacincing for your clients in advance.

7. Diversify, Just dont do plumbing. Also do heating and other related jobs. The more branched out you are the busier you will be.

8. Advertise your buisness. Cheapest way is on your vans or cube trucks. 

9. The smallest job my have the biggest returns. Once in a home you should inform them of everthing you can do for them. Such as heating or other related jobs. ( some jobs we get on will expand to large jobs such as furnace, boiler change outs) Even though our Ad says plumbing and heating, they have to be reminded that we also do heating. 

10. Treat everyone with respect, be polite and know what you are talking about. This will keep you in buisness forever.

11. Most important, always clean up after yourself. The best of jobs done still look like hell if the job site is left dirty.

Good Luck to all the new buisness men out there

6.


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## AKdaplumba (Jan 12, 2010)

are you a business owner as well?


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## OldSchool (Jan 30, 2010)

We have had our plumbing and heating buisness for over 40 years. We have been busy from day one. Mostly repeat customers and referrals.


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## user2090 (Sep 26, 2009)

*Response and Question for OP*

Thanks for the good advice. I don't think it matters if it is a new business. I believe if many of the business owners around here understood what you wrote they would do much better.

I do have a question. Where on that list do you put something about employees? Around here there seems to be a very little effort to retain good help. As is demonstrated by a pissed off apprentice posted recently. As a person in a phase of learning about running a business, I often wonder why this area is so neglected. Isn't employee retention a good thing?


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## Protech (Sep 22, 2008)

That pretty much covers it. Were you born in miami? I might have a lost twin......



OldSchool said:


> I noticed to a lot of members are new as buisness owners.
> 
> Here are a few tips to become successful
> 
> ...


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## OldSchool (Jan 30, 2010)

As for employees they will come and go. I find plumbers jump ship more often than any trade. You cant go walking around on pins and needles just to kepp them happy. #1 do your job and the beniefts will flow from there. I always get my guys to start at the bottom of the ladder.... show what you can do then I will pay you what you are worth.

On a further note about employees .... in the long run they will do less and want more.
Best advice I can give you... start with a young person with incentive and train him from scratch.


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## DUNBAR PLUMBING (Sep 11, 2008)

#1, This is why I spent nearly 4 hours between two longstanding repeat customers of mine last week, enjoying some peanut butter pie and good convo last week. I think they appreciate me more as a businessman than just a good plumber.

#2, I don't agree with that at all, as I treat a referral as an extension of the first referrer, and those who come to me in that direction are an *extension of trust. *Now I've been in the situation where the cost escalated beyond my control because of a particular situation and I couldn't help it, but if you ever get caught throwing zingers by thinking you can jump higher rates because someone liked you enough to refer you, you're setting up the downfall of the 3rd referral and when second and first talk again, which they will, you'll be the opportunist in the form of a trust issue you just marred.

#3, high denotes exclusivity in many ways. Being high and being profitable are two different empires in the success of wealth. You're spouting high without the reality that your username isn't attached to your company name, like mine is. 

I don't go out and proudly brag I charge high prices under the name Dunbar Plumbing. I have pricing relative to the cost of operating a plumbing company I deem as responsible and worthy/justified to operating my company without an ongoing string of complaints for being overly expensive just because we can. 

There are plumbing companies folding/going under around me because of that "high" attitude. 

#4, Ever asked yourself why that drumroll has to be constantly spoken? You mentioned 20-30% margin which is the governing rule of most designs in business. 

You'd be surprised to know that banks constantly hover around the 4%, constantly on average when managing everyone's money, in the big picture.

#10, I believed in this attitude the first tenure of my years in dealing with John Q. Public. Reality and age changed all that and if you're worried about where your next dollar lands in your hand, then by all means, be a pushover and get walked on. 

I stress this a lot online because it's my only interaction with a large base of plumbing companies. I'll say it again: When you allow nonsense BS to continue with a customer berating you on price or time, you've set up the next time with another plumber or yourself to continue the pattern. This beat down just makes the worse get worser, and eventually a disconnect is on the horizon for this same customer to end the work relationship for you and find another one willing to beg for the dollar. 

If you pride yourself as a plumbing company as being that consistent smiling face and believe that counting years behind the date of origination means something, good. But good profitability and being recognized in your community for being the "no-frills" plumbing company covets a standard that you won't get screwed, you'll pay for the talent, but you won't pull a fast one either thinking you added pennies to the penny bank on my professionalism. 

There's ways to save them using our services and it's in the competency that arrives at that front door down to the years of experience that emboldens the workmanship. That's how I've beat this down economy in my area. 

No freebies, no discounts, estimates are not in my vocabulary for free, practically 0 advertising from the yellow pages because people just don't use that book anymore. 

My wave on the ocean comes strong and steady, just because there's only one surfer doesn't mean we all don't reach that beach.


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## OldSchool (Jan 30, 2010)

Dunbar ... our customers are always giving us stuff... most of the time they want to serve us lunch...some give tips... most of the time its here keep the change. I got some customers they have jams and canned stuff the want to give us or even a bottle of wine. We take it even if we didn't want it. It would be an insult if we didn't.

As for a referral yes you should increase your prices not take them for a ride. At some point you have to start making a profit. What will you do for pension... at some point in your life you will no longer be able to work or just maybe you would like to retirer.

As for banks they make most of their money from charging fees to manage your money.

If you like I will tell you our company name and website address


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## TheMaster (Jun 12, 2009)

OldSchool said:


> Dunbar ... our customers are always giving us stuff... most of the time they want to serve us lunch...some give tips... most of the time its here keep the change. I got some customers they have jams and canned stuff the want to give us or even a bottle of wine. We take it even if we didn't want it. It would be an insult if we didn't.
> 
> As for a referral yes you should increase your prices not take them for a ride. At some point you have to start making a profit. What will you do for pension... at some point in your life you will no longer be able to work or just maybe you would like to retirer.
> 
> ...


The way you worded #2 in your keys to sucess sounds like your charging sombody more because they were refered to you by an existing client. If this is how you meant it,then I too do not think that's a key to sucess and will agree with Roast Duck aka Dunbar the barbarian


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## OldSchool (Jan 30, 2010)

TheMaster said:


> The way you worded #2 in your keys to sucess sounds like your charging sombody more because they were refered to you by an existing client. If this is how you meant it,then I too do not think that's a key to sucess and will agree with Roast Duck aka Dunbar the barbarian


To get this straight... here it is... On service everyone get charged the same period. On contract " NO" we also quote lump sum job. A lump sum is everthing included in one price. If we know we are ahead of the competion then yes our price will be higher than theirs.


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## Miguel (Aug 10, 2009)

TheMaster said:


> The way you worded #2 in your keys to sucess sounds like your charging sombody more because they were refered to you by an existing client. If this is how you meant it,then I too do not think that's a key to sucess and will agree with Roast Duck aka Dunbar the barbarian


Yeah, I have to chime in, too.
Oldschool, your post makes oodles of good sense but the "_charge more_" connotation from rule #2 does seem a bit greasy and underhanded for a plumbing co. that thrives on it's good name. P'raps you'd like to clarify that statement a bit.
On the one hand I can see that maybe client #A gets a better deal for whatever reason doesn't mean that referal client #B should get the same molly-coddling. Regular rates; same fine work. Period. Maybe over time they'll fit into the same classification as the referrer and be subject to better rates.
Yet on the other hand I see no reason to gouge the referred client. Your post makes it seem as if it's a good opportunity to suddenly widen your profit margin just because you have them on the "trust" and "confidence" level already.
My rates are my rates based on what I need to earn in order to provide for myself and my family, and whether I'm driving up to the home of the single Mom on social assistance or the Doctor with the gated drive and the intercom to gain admittance, my rates remain the same.

Just my 2cents.


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## OldSchool (Jan 30, 2010)

Miguel said:


> Yeah, I have to chime in, too.
> Oldschool, your post makes oodles of good sense but the "_charge more_" connotation from rule #2 does seem a bit greasy and underhanded for a plumbing co. that thrives on it's good name. P'raps you'd like to clarify that statement a bit.
> On the one hand I can see that maybe client #A gets a better deal for whatever reason doesn't mean that referal client #B should get the same molly-coddling. Regular rates; same fine work. Period. Maybe over time they'll fit into the same classification as the referrer and be subject to better rates.
> Yet on the other hand I see no reason to gouge the referred client. Your post makes it seem as if it's a good opportunity to suddenly widen your profit margin just because you have them on the "trust" and "confidence" level already.
> ...


Rule #2 doesn't mean take them to the cleaners. LMAO It does mean you can charge more. This however doesn't apply to service work. Lets say you just did the plumbing in a new house for client A under contract and client A referrs you to client B. Yes you can and should charge more Client B knows you can do the work. He is better off paying you more than trying to find a plumber that is cheaper and possibly going to screw things up.


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## TheMaster (Jun 12, 2009)

OldSchool said:


> Rule #2 doesn't mean take them to the cleaners. LMAO It does mean you can charge more. This however doesn't apply to service work. Lets say you just did the plumbing in a new house for client A under contract and client A referrs you to client B. Yes you can and should charge more Client B knows you can do the work. He is better off paying you more than trying to find a plumber that is cheaper and possibly going to screw things up.


 What if client A refers you to client B and then client B refers you to C and so on and on......when you you quit raising the price??? When one of them laughs in your face and tells ya to go F yourself?


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## Phat Cat (Apr 1, 2009)

I don't want to put words in OldSchool's mouth, but I didn't read his post the way some of you are interpreting it. What I read was that your value and worth go up when you are referred to someone.  Customer's will pay more for a company that has a proven track record and a long list of satisfied customers. They are paying more for peace of mind and reputation. The pressure to drop prices or negotiate becomes non-existent. 

The only thing to do to secure the job is to work out the scope, schedule, and budget. Trust is established, therefore, pricing is not the number one factor in whether a job moves forward.


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## TheMaster (Jun 12, 2009)

PlumbCrazy said:


> I don't want to put words in OldSchool's mouth, but I didn't read his post the way some of you are interpreting it. What I read was that your value and worth go up when you are referred to someone. Customer's will pay more for a company that has a proven track record and a long list of satisfied customers. They are paying more for peace of mind and reputation. The pressure to drop prices or negotiate becomes non-existent.
> 
> The only thing to do to secure the job is to work out the scope, schedule, and budget. Trust is established, therefore, pricing is not the number one factor in whether a job moves forward.


I think the post meant this. "Now that I have a cheerleader telling you how good I am....I'm going to charge you top dollar". That means the customer paid more because he mentioned sombody referred him and everybody elses prices are cheaper if they dont mention it. its almost like he's charging for a finders fee but then doesn't give the person that gave the referral a kickback.......dayum thats dity dirty IMO to charge more because I heard you did a good job.


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## Protech (Sep 22, 2008)

I don't know about that one. I've found that when I go into a hot repipe hood and do a job for X amount. All the rest want X amount cuz they have basically the same house with the same floor plan. You'll never get them to sign for more than there neighbor paid just because of pride. They will never accept that there neighbor paid less than them for the same amount of work. I've come back to a hood 3 years later and they still want the same price from 3 years ago. They don't care that some commodities have gone up, they aren't paying a penny more than Jim did.



OldSchool said:


> Rule #2 doesn't mean take them to the cleaners. LMAO It does mean you can charge more. This however doesn't apply to service work. Lets say you just did the plumbing in a new house for client A under contract and client A referrs you to client B. Yes you can and should charge more Client B knows you can do the work. He is better off paying you more than trying to find a plumber that is cheaper and possibly going to screw things up.


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## Protech (Sep 22, 2008)

If you aren't raising your prices every year you are doomed. There are several companies in my area hovering on the brink of closing because the owner just can't take on a set of balls and raise prices. There is a guy here charging $45/hr because that's what he charged 30 years ago and he doesn't want to piss off his cheapo customers.



TheMaster said:


> I think the post meant this. "Now that I have a cheerleader telling you how good I am....I'm going to charge you top dollar". That means the customer paid more because he mentioned sombody referred him and everybody elses prices are cheaper if they dont mention it. its almost like he's charging for a finders fee but then doesn't give the person that gave the referral a kickback.......dayum thats dity dirty IMO to charge more because I heard you did a good job.


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## TheMaster (Jun 12, 2009)

Protech said:


> If you aren't raising your prices every year you are doomed. There are several companies in my area hovering on the brink of closing because the owner just can't take on a set of balls and raise prices. There is a guy here charging $45/hr because that's what he charged 30 years ago and he doesn't want to piss off his cheapo customers.


This has nothing to do with a yearly or a typical rate hike......its a referral. Sure things go up but not because sombody referred you.....atleast i dont do business that way. I would want to thank the person that refered me by treating the business they sent my way fair. I wouldn't hike the price up because i think i can get away with it,thats a good way to loose two customers at once.


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## OldSchool (Jan 30, 2010)

Typically you do have to keep raising your prices. Your employees expect to get a raise every year. The bottom line is you are in it for a profit not just a wage. If you wanted a wage I am sure you could go work for some other plumbing company and close your doors. You are doing nobody in this industry a favour by low balling your prices. That includes your employees and yourself. Profit will cover future expense that most companies don't see coming. Expense like down time when your truck breaks down and you are paying your employee to stand around waiting to get the van back on the road from the mechanic. What happens if your van needs major repairs. All this money has to come from somewhere. I guess most guys are taking it out of their own pocket to cover these unexpected expenses.


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## OldSchool (Jan 30, 2010)

PlumbCrazy said:


> I don't want to put words in OldSchool's mouth, but I didn't read his post the way some of you are interpreting it. What I read was that your value and worth go up when you are referred to someone. Customer's will pay more for a company that has a proven track record and a long list of satisfied customers. They are paying more for peace of mind and reputation. The pressure to drop prices or negotiate becomes non-existent.
> 
> The only thing to do to secure the job is to work out the scope, schedule, and budget. Trust is established, therefore, pricing is not the number one factor in whether a job moves forward.


I am glad somebody could see what I am saying. Dont read into it that I am saying go rip people off. What I am saying most mistakes new buisness owners don't realize that you build up your buisness by refferal. Once you reach this point yes by all means you are worth more. Charge accordinly. A small increase in price in justified.


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## OldSchool (Jan 30, 2010)

TheMaster said:


> What if client A refers you to client B and then client B refers you to C and so on and on......when you you quit raising the price??? When one of them laughs in your face and tells ya to go F yourself?


What ever the market will bear would be the cut off point. I can see what you are saying but dam you dont have to increase every referal until you price yourself out of work. You can do it a little slower than A to B to C


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## TheMaster (Jun 12, 2009)

OldSchool said:


> What ever the market will bear would be the cut off point. I can see what you are saying but dam you dont have to increase every referal until you price yourself out of work. You can do it a little slower than A to B to C


:laughing: Ok I'll accept that.:thumbsup:


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