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There seems to be a prevailing notion in the trades that as a small service company grows, so too must its geographical coverage. If your goal is expanding your business's territory, there's a right way and wrong way to do it. Even the largest, multi-shop organizations can't afford to drive farther and farther to service their customers.

It reminds me of the fisherman, who rows his boat to the far end of the lake, passing by scores of potential catches because he believes that's what he has to do to be successful that day. Rowing and not fishing consume most of his day. By the end of the day, he has expended a great deal of energy for his quarry. I would rather be the fisherman who fishes from the pier and learns all of the methods and techniques that give me a greater yield from a single location. By the end of the day, I will harvest more fish (profits) with less rowing (time and costs).

As your shop's territory grows, expenses such as fuel, truck maintenance and driving time increase. You are less efficient. Customers inevitably wait longer for service. If you pay your people on commission, it is frustrating for them to dedicate the extra driving time for the same money — they become less efficient and less enthusiastic. Hourly personnel become more costly overall and those additional costs get reflected back into your pricing schedule — making you less competitive. Longer hours for the same income becomes the rule and not the exception.

There are those who say, " I live in a rural area, my customers are all spread out. We don't have any choice!" My reply is, "How many potential customers do you drive by to get to the customer who called you?"

Let me tell you a little secret. Before I worked for the big boys, I was a very small shop for fifteen years. Yes, I ran yellow page ads in numerous areas at great expense, only to find myself driving long distances to reap a few measly bottom-line dollars. I had to overload my trucks with supplies to save time chasing parts in unfamiliar areas. I was spending $500 per truck for monthly fuel. My mechanic loved me. I was always replacing brakes, tires, suspensions, oil, transmissions — you name it. I would burn a new truck in three years or less. I was always dragging myself and my home life was terrible. It just wasn't working for me, I didn't want to do it then, let alone submit to the idea that this was my future as well. It was time to make a few critical decisions.

I decided to put all of my advertising and marketing efforts into a small geographical area — a five-mile radius around my shop —, which translates into about eighty square miles of coverage. The idea was to make my office centrally located in my service area — never being more than a short drive to my shop. Need a jackhammer or a trailer from the stockroom? — no problem. My main supply house was within easy reach. Since everything and everyone was nearby I could hit more stops per day, while spending more time with each client in the same amount of time. My customers never had to wait too long. Estimates were easier to get to than before.

The efficiency was dramatically enhanced because my non-profit-bearing driving time was converted to billable time. I changed my company name to "The Neighborhood Plumber" and my slogan was, "Help is just around the corner" — and it really was too. I would always ask customers how they had heard of me so I could track the effectiveness of my advertising. Many times the response was, "Because you're in the neighborhood!" My per/truck fuel bill dropped from $20/day to $20/week — reducing my gasoline bill by 85%. My mechanic thought I'd moved because he hardly saw me anymore. Less traffic, less wasted time, less hassles and less costs. More family time, happier employees, and considerably more income. I had created my own fishing hole.

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Peter Morici - [Intro] | [Articles] | [Email] | [Website]

The views expressed in this article are those of the individual author and do not necessarily reflect the views of the management or staff of MasterPlumbers.com


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