Diversifying for profit
In the almost 20 years that I have been doing this magazine it always amazes me, when talking to contractors, that they are into so many things. Every business is somewhat different as every owner finds different things to offer depending on community needs and the different skill sets of their employees.
Early in my days with the magazine I remember talking to a plumbing contractor about his van, which was a particularly heavy-duty model. When I asked why he needed such big heavy van he said, “Well, I carry drywall a lot.” It turned out he was offering a complete bath and kitchen design and renovation service. He had taken his business far beyond the plumbing. As time went on, I learned that was not all that unusual.
Heating contractors do air conditioning, of course, and many also install fireplaces, barbecues and any other gas appliance. Never mind all the different forms of heating.
If you’re in a high tech trade like commercial refrigeration, it may make sense to specialize. If you’re in residential, perhaps in a smaller community, then you want to offer the widest variety of services possible.
We talked about the changes in tools last month. Those changes along with new materials and practices – different pipe joining methods for example – have made it easier to move into a new area because the required skill level is not so high. Obviously, you still need the necessary trade licenses. I think most contractors, when hiring, do try to cover all the bases.
The most important thing is just always keeping your eye open for new opportunities. A customer may call with a problem that’s a little outside your area of expertise, but it may make sense to branch out into that line of work rather than passing it along to a competitor. Maybe you don’t do drain cleaning, for example, but it could be a lucrative new service.
Trade shows are always good for picking up new ideas about products and practices to expand your offering.
One of the struggles today is for the contractor to keep ahead of the customer in an age where everyone has the Internet. You need to be the expert so that you can offer options to your customers. Product training and knowledge takes time, but it pays off in the end with a more informed sales approach.
Knowing what’s out there along with the ability to quickly adjust to new trends and needs for your customers will ultimately result in more business. And that’s always a good thing!