My personal role in the company was changing. I was making the transition from owner/plumber to businessman/marketer. This new approach to market penetration was starting to snowball. The referrals were growing. Since my costs had dropped so dramatically, I was able to lower my prices and actually increase the profit.

A large portion of the money a company collects from its customer's is used to pay for the expenses it incurs. If we can lower our costs legitimately we can charge less and still make the same money and usually more. Making a sale becomes easier. You will capture more of those potential customers if you can lessen your overhead. I would rather sell something for $200 to net $50 than sell that same product or service for $300 to net that same $50. It's that simple.

Another nice advantage of working a tight area is that you don't need as many people. No more trucks lingering idly in distant locations "just in case somebody calls." There is a loud cry right now in our industry for qualified service people. You see, by keeping your employees working a regular schedule and minimizing their windshield time, they make a better living. They make more money because they're not always rowing the boat to get to the next job. You as an owner/manager increase the dollar flow through enhanced productivity and more billable work per employee. Employee retention goes up while hiring expenses, (want ads, interview time, etc.,) goes down. Your organization transforms itself into a leaner money machine.

In three short years, we quadrupled our customer base. My income went up by a factor of five. My trucks lasted longer. This is the way of the future — maximum market penetration over a manageable and profitable geographic area. Then one day, I decided to sell that company to one of my employees. Guess what? — this new approach had increased the value of my company, several fold. Why? — because I could demonstrate a higher return per dollar expended than other companies. There is no mystery here. We all know that reducing costs increases income and profit. The trick is in how do you do it. I have always said, "Give me ten hand-picked people in a tight geographical area with a "rifle" approach to marketing and I will make more money than a shop three times my size who uses the "shotgun" method.

Here's a hot tip for you that I learned a few years later when I was a manager for a megashop. That shop spent $30,000 monthly in yellow page promotion, had 50 trucks and 60 technicians. They tried to cover 1500 square miles from that one location. The bulk of their business was generated within 5 miles of their shop — that's a fact.