The Real Y2K Problem
Dire things will indeed happen in the next millennium to many people in this industry. But it won’t be from the absence of two little digits in software code. Bigger worries stem from lumps on the old noggin that were inflicted way back in the 19th century and still linger. Such as —
Misidentifying the enemy. It’s not Home Depot, the utilities, the consolidators, wholetailers, “slugs” or anyone else who is after the same business you are. The real enemy is everyone outside the industry who is trying to grab disposable dollars that could otherwise be spent on plumbing-heating products and services.
Within the industry, there’s enough business for everyone. All you need to do is find a suitable niche where you can outperform Home Depot, the utilities, et al. The real way to prosper is not to fight over pieces of pie, but to increase the size of the pie or bake some more.
- Avoiding God’s grace. The Good Book tells us that the Lord helps those who help themselves. Yet, a loud chorus persists in blaming lousy business fortunes on manufacturers and wholesalers who fail to “protect” the downtrodden from market forces.
Ever since the 1880s when the industry as we know it coalesced, plumbing and heating contractors have complained about vendors and suppliers selling around them. The forerunners of PHCC and MCAA were formed at that time primarily over the issue of “trade protection.” They beat on that drum until forced by antitrust legislation and the FTC to stop it. Yet, here we are at the dawn of a new millennium and you still hear the wailing and gnashing of contractors obsessed with who sells what to whom. Worse, most of the complainers fail to support the handful of companies that do market exclusively through trade channels. Sheesh.
- Identity crisis. Repeat as many times as necessary till it takes hold:
“Although plumbing is an honorable profession, I am not a plumber. Plumbers work for me. I am a plumbing contractor. As a businessman or woman, it is not my job to turn wrenches. My job is to drum up work for those on my payroll who do turn the wrenches, and to operate profitably so that all of us may prosper.”
- Self-esteem crisis. After you memorize the previous oath, tackle this one.
“While I may sometimes out of habit slip and refer to myself as a ‘plumber,’ I will never, ever again tell anyone that I am ‘just a plumber,’ as I and so many of my counterparts are wont to do.”
- Upside down world view. In virtually every other industry in the free world, the majority of proprietors reserve their greatest scorn for counterparts who undercut the market with lowball pricing. They appreciate high-priced competitors who actually give them a chance to compete on the basis of price.
In this industry, anyone who dwells outside of the “going rate” ghetto gets blasted as a ripoff. As the century turns, it may be time to take a closer look at those competitors who run successful businesses while charging much more than you do for comparable services.
Maybe they know something you don’t. Maybe they’re right and you’re wrong.
- The manpower crisis has a solution. Good people are hard to find, but not nearly as hard for those who pay top wages and benefits. Who offer challenging jobs with advancement opportunity. Who follow the Golden Rule and treat employees the way they’d like to be treated. Try this, and get ready for the best and brightest to bang at your door.
But they won’t come knocking for a measly $32,000 a year, which is the average pay for nonunion PHC journeyman and service technicians. They’ve got better things to do with their lives, and who can blame them.
- Independents cannot be independent anymore. Industry consolidation does NOT mean the death of the independent contractor. But it does spell the end for the lone wolf.
Single-location contractors will be able to survive and thrive in the 21st century marketplace, but only if they join forces in trade associations and marketing/buying co-ops that enable them to compete on a level playing field with the big boys.
So-called affinity groups are starting to make headway in the HVAC field. As the century turns, you will hear more about them in plumbing as well. Trade groups cannot be just social clubs anymore.