Subscribe to our newsletters & stay updated
Did you ever wonder why you became a plumbing-heating-cooling technician and then a PHC contractor? The technician part of the question could be answered because you were more inclined to work physically than at a desk or counter looking at a computer.
It also could be because the trades were the only opportunity presented to you. Or maybe it’s what a relative did and you followed suit.
Whichever reason brought you to becoming a tech, those of you who decided to become contractors did it for one or more of several reasons. In no particular order, I will expound on those reasons and what you must consider when running a business.
Maybe your family was in the contracting business. In this instance, you just decided to go into the family business as you did when you became a tech for the same reason.
Another reason might be that you had the skills as a PHC tech and found yourself unemployed, for whatever reason. Contractors in your area were not hiring when you looked for a new employer, so you decided to become your own employer.
Then there is always the reason in the back of the minds of some techs — their employer is making all sorts of money on their skills and labor. And you wanted to reap the rewards your employer was getting from your contribution to the business for yourself.
Or maybe you were always destined to be an entrepreneur.
An owner’s business responsibilities
Whatever the reason for becoming a contractor, there is one common denominator. Business means business. When you take on being the head of your own business, many responsibilities fall upon your shoulders.
First and foremost are the operational costs for which employers are responsible. Even as a one-person entity, you have business expenses. You must constantly monitor those expenses in order to sell your services above your true cost to produce those services. If you don’t have that intent, you don’t belong in business since profit above costs is the only reason for-profit enterprises exist.
You must look at yourself as more than one person in a one-person business. You are the owner, the tech, the administrator, the bookkeeper, the receptionist, the dispatcher, the service manager, the inventory control person and the customer relations representative.
It’s a lot of hats to wear and a lot of hours you must put in. It would be wise to calculate your costs properly to receive compensation commensurate with the contribution you make to your business. If you don’t, you probably would be better off working for an employer who knows how to properly and efficiently take care of all those responsibilities.
Then you must consider the cost of your tools since you can’t get the job done without tools. Speaking of tools, you also need the administrative tools necessary to run a business, such as computers, printers, etc.
Even if you work out of your home, you have real estate expenses to consider so you can address the business of running a business.
Since consumers cannot bring their buildings to you, you need a service vehicle to get to your customers. Service vehicles come with a myriad of expenses such as insurances, registration and inspections, fuel, maintenance and repair and, eventually, replacement of the vehicle in totality.
Don’t forget the cost of the inventory you must keep on your service vehicle that never really gets sold because you need to be ready for the next job requiring the material.
When you get to the point of hiring others, you must know how to discern the assets that employment candidates have so you can wisely decide which candidate fits within your business to help it be successful.
Then there are salaries and salary-related expenses to consider, such as FICA matching funds, unemployment and disability insurance, workers’ compensation insurance, liability insurance pertaining to tech payroll, etc.
The list goes on and on. You will encounter expenses for completed operations and catastrophe insurances, lawyers, accountants, callbacks, bad debt, customer relations, breakage and loss, licenses, bank charges, and Murphy’s Law — whatever can happen will happen.
Once you properly identify and calculate your true cost, you must choose a profit margin to get you where you want to go. When you properly apply your desired profit margin to your true cost, you can arrive at properly profitable selling prices that will get you where you want to be.
Bad service is unacceptable
Once you set up your business properly, you must attract consumers to your business. That takes a good deal of creativity, time and money.
Then you must traverse the minefield of business economic times. Sometimes, you take on more work than you can handle — other times, no work at all. And more often than not, you have every economic time in the middle that is less than 100 percent and more than zero percent of hours sold.
This will make your true cost fluctuate, which is why you must continuously monitor your expenses.
Armed with what you need to take care of consumers successfully, you and your staff must put your best feet forward to sell the job. It requires confidence and style. Always be congenial., presentable, honest and sincere as you and your staff deliver excellence to consumers.
Just as you must monitor your costs, you must monitor the quality of service your techs render. They are a reflection of your business. You’ve heard the old saying, “One bad apple can spoil the whole bunch.” One bad employee can turn good employees bad. And that bad employee can cause you to lose repeat business opportunities due to shoddy workmanship.
I had a tech with an extremely bad attitude come into my office one day and place his receipts on my desk as he sarcastically said, “Here’s all the money I made for you today.” I guess he thought every penny went straight into my pocket.
When he said that, I pointed to the light above his head and asked, “Where does the money come from to pay for the light that you use? Where does the money come from for the energy the light uses? Where does the money come from for the truck you drive and the tools you use? And, where does the money come from to cover your paycheck each week?”
This tech’s attitude was so bad that I was forced, by him and his bad attitude, to terminate his employment. It is another responsibility the owner has to everyone else in the business.
If you are a tech considering becoming a contractor, take into consideration the responsibilities you will need to address.
If you are a contractor, make sure you are taking every opportunity to make your business successful. If you employ techs who think all the money they bring in goes into your pocket and you only sit back and live the good life, let them read this column.
Shakespeare’s Hamlet proposes the question, “To be or not to be,” referring to living or not living.
As a tech, you must decide whether to be or not to be a great tech. As a contractor, you must choose to be or not to be a successful contractor, one who can weather all the trials and tribulations that come with ultimate responsibility for your business.
© 2023 All Rights Reserved