Advertising VS. Word of Mouth

[gear junkie]

Don't own a business (yet) so I need to learn the business side. I'm curious Rick, so don't get offended. You've been in business for awhile but what did you do when you started out? How did you get jobs? What do the rest of you guys do to keep money rolling? During the slow season for example. We need to have more business related discussions. Thanks in advance.

Ben

[PLUMBER RICK]

easy, i started at age 12 1/2 with my uncle. at this time i was learning and at age 13 i had my first snake. a milwaukee hand held snake, similar to the k-39 with chuck. at 18 i started in the union as an apprentice working for a new construction shop. this lasted for 15 years. i was also able to moonlight after hours and weekends.

when i decided i had enough of new construction. i took my contractors test and went to work for myself. so my moonlighting jobs, turned into full time jobs. i was now available during regular hours.

one of the strangest things about moonlighting was the time i got called to high schools principals office a customers water service had broken and they contacted the school to track me down

now being completely on my own for 10 years, i get all my work from referrals and other plumbing contractors. i do jobs that they don't do. most of them in the specialty field. i keep busy enough to turn jobs away and only travel 500 miles a month.

today i had a new referral from an existing customer. turns out that she is related to the owner of the next job i was going to. but that was not the person who referred me

in the last 6 years that i can look up on the computer, i have worked for over 1100 different people and companies. some of course only 1 time as it was for a 1 time job from another plumber. but the majority are repeat customers. in fact some have used me since i was with my uncle at age 12.

the real issue with the yellow pages here is that the companies are banking on their 1 and 2 page ads to lure in business. all claiming to be available within 1 hour and an up front price. there's a reason they can make it in an hour, they are not busy

my buddy, who some have met has 20 guys in the field. he doesn't advertise and if you don't call first thing in the morning, you don't get same day service.

it works for me and it works for him.

rick.

[Crappy days]

Rick, Just to make it clear, I am not disagreeing with moonlighting or any of the advice/story on how you started. But last time I read the union agreement my Friends had to sign it was very clear on no cross competition with the union. This included receiving your own c-36 license or moon lighting in any way. Granted most do not or cannot enforce this. How ever if some one wants to be ethical and start a business how would you recommend that without advertising.

[Crappy days]

Gear junkie, I did moonlighting throughout my career working for others. If they did not permit it I quit and found someone that did. The last employer I worked for knew I was licensed. I also told him I would only be willing to work for him 1 year. We had a gentleman's agreement that I would not solicit his customers while working for him. Because he was a fair man I also honored the agreement for two years afterward. Leading up to my departure date I hit the pavement. When I left I had two large property management company's that swallowed all of my time. I also payed a flier delivery service and advertised in some local small publications.

Lately I have started running adds in the yellow pages and some other print/mailer media. Throughout my career working for others or myself I have learned you cannot depend solely on advertising. Advertising is great when done smart. Most advertisements you do not make a profit on. If you can break even or make a profit then it is OK. Where you make your money is in return service. It does no good to spend money on advertisements if you cannot keep the customer.

[DuckButter]

Gear Junky, Rick & Crappy..
Let me toss this into the mix...I'm right where Rick basically was in his mid 30's.
Crappy...I'll take your word on the results from yellow page advertising, but I have to be honest...right now I'm busy and this is s'posed to be slow season.
I get more and more referrals and repeat buz as time passes...I almost feel like I'm cheating with the ad budget.

Gear Junky...I'm doing almost the exact same thing Rick just said (minus the union part).
I have had severe nail-biting times when I was unsure if I should pack it in before the reserve got too low and look for a new job...then the phone rings.
Here's MY suggestion:
Make sure you have enough reserve cash to cover 6 months overhead BEFORE quitting the "day job".
Make sure you sample all means of pulling in more work BEFORE you decide to take the leap. (Local newspaper, contractors...you might make less per hour on one site, but it's consistant work if you "get in" with a busy GC)
KNOW your pricing (lowballing on the basis that you're at least making more money than you used to will cost your shirt in the longrun)

[PLUMBER RICK]

funny you mention the union. some of the work i do is for union shops. i'm no longer in the union. but at the same time i get hired to go to union jobs and do specialty work. never had an issue.

just like any one else starting out. you can't expect to open up shop and have business come in. if i moved out of my local area, i too would struggle for work. all of my contacts would be to far away.

a new business would have to take on work that others might not want. do it for less money to get the job. do the work with as little overhead as possible. you can't just open your door for business and expect the customers to come your way. you need to establish yourself, possibly work for another contractor until you can survive on your own.

i had an electrician friend that got married and moved to washington dc. with his wife. he commuted to los angeles for 1 week every month just to make ends meat. don't know what he does now. but that was almost 2 years ago.

fortunatly everyone needs a plumber sooner or later. work will come. also last time i checked, a contractor has to be finacially strong just to qualify for his license. hopefully anyone just starting out on their own has enough saved up to weather the slow time. it's not easy just starting out.

i personally don't use the yellow pages for anything more than looking up a supplier. i don't look for doctors, lawyers, auto mechanics, accountants, or other trades. i get referrals from other people if i need to. why go at it blind. a referral is a better guarantee of finding a qualified person, than an ad from someone you don't know.

hopefully people can understand that.

rick.

[Crappy days]

I would agree referrals are always best. When ever I can, I give referrals or use referrals. Yellow pages are one of many ways to advertise. I have had great success with mailers. The type that come with 50 other company's in them (window installers, kitchen remodels , plumber etc. ) glossy postcard size. There are a few company's in every area that do this.

[gear junkie]

This is big difference between plumbing and HVAC. With hvac; moonlighting is a big no no. Don't even think about it. Plumbing seems to be more tolerant on the issue. Since I do both (but w/ summer, hvac is taking more of my time) I'm torn between the issue. I've done it but try to limit the amount. I never look down on those who do. My boss is great and fully supports me and I try not to backdoor him. Don't make this a flat rate discussion but almost all hvac companies are flat rate. Just a couple observations I've noticed.

[ToUtahNow]

I too was fortunate in that I had some customers prior to starting my business. I also had done a few homes where my bathrooms were featured in Architectural Digest so I did quite a few custom homes. However, advertising is something you do from the day you start your business until the day you close the door. Advertising is not always about the Yellow Pages but sometimes they will help you get started. Where some people get hurt is when they first try to wean themselves off of the Yellow Pages and their customers think they went out of business because they can’t find your number in the book.

I kept a fairly modest Yellow Page ad for the first 5-years or so. After 5-years I was well enough known that I no longer needed a Yellow Page ad. While I was still building my business there were several times when things were slowing down between jobs and the Yellow Pages were not working. For about 10% of the cost of my Yellow Page ad I could run an ad in the local paper and pick up more work than I was getting from the Yellow Page ad. It did not take too many of those ads to make me see how much I could save without a Yellow Page ad.

Advertising is not always about the printed ad. Advertising is what you do every day while you are inter-acting with the community. I once had a customer at a retirement community complain to me they have to walk several hundred yards from the Bowling Greens to get to the Clubhouse restrooms. I ended up finding a few manufactures and supply houses to donate the materials and we helped them build a restroom at the Bowling Greens. Many of the residents were former Contractors so I supplied all of the plumbing and helped them with the rest. Soon afterwards I was told they needed a bathroom at the 9th hole so we did it all over again. Needless to say I was a Saint in their eyes and it did not take too long to recoup my cost and 25-years later my shop is still working in the retirement community.

In addition, I had my own radio show on the weekends called “Home Improvement” (pre Tim Allen) where homeowners would call in asking for plumbing advice. It was a lot of fun and I got a lot of exposure. A good part of being the new guy in our Valley was I was the only guy willing to work 24/7. Many of the old-time plumbers refer work to me so their guys did not have to go out at 2 AM to save someone. I never tried to take their customers but many of them started calling me direct after a while. One of the customers was a property management company which was good for a minimum of $10,000 per month in service and again 25-years later my shop is still doing their plumbing.

Mark

[ToUtahNow]

Originally Posted by Crappy days

Rick, Just to make it clear, I am not disagreeing with moonlighting or any of the advice/story on how you started. But last time I read the union agreement my Friends had to sign it was very clear on no cross competition with the union. This included receiving your own c-36 license or moon lighting in any way. Granted most do not or cannot enforce this. How ever if some one wants to be ethical and start a business how would you recommend that without advertising.

When I was in the HVAC Union we could not moonlight so I never tried. All of the Business Agents from all of the Unions would get together once a week and drive around town trying to catch people. Once I left the Union I really enjoyed kicking them off of my projects when they would show up looking for Union members.

Mark