3 alarming trends affecting the plumbing industry

Being a plumber in todays economy can be hard, with competition and poor economic conditions finding work can be difficult. Here are three alarming trends and there solutions.

How Does A Plumber Survive in These Challenging Times?

If you're one of the 48,000 plumbers working in Australia these days you have to be asking yourself; "how am I going to make it through another year?" Don't worry, you're not alone.

Whether you are clearing clogged drains or installing high pressure steam pipes in an industrial setting, there is heavy competition from the other 48,000 plumbers searching for business.  If you're an independent plumber or one that runs a small business it's hard to imagine how you are going to stay afloat for another year. 

While the plumbing industry is vital to the future of our nation and economy, it appears that very little is done to help them. The truth is that small business success is vital to the economic recovery we all want so very badly yet it seems that every day there are more obstacles that get in the way of any good plumber trying to make a profit. Government claims they are trying to assist the small businessman yet the hoops and hurdles to get any kind of help from anyone make the support seems almost non-existent. 

Compliance with government standards is a continuous challenge. Building code changes for 2011 have made it increasingly difficult to make jobs profitable. Customers and clients have come to expect certain pricing yet holding those prices while working longer hours and using more equipment and resources make profitability a nearly unattainable goal.

Beyond this there are many other challenges that the Plumbing Industry faces. Here are three of them and some solutions.

3 Alarming Trends Affecting The Plumbing Industry

1 - Shortage of Skilled Tradesman

If you run a plumbing business and have ever had one of your key tradesmen leave for another company then you know how tough it can be to find well trained replacements. How many times have you heard the story of a plumbing professional taking on new staff and training and guiding them for years. Only to see them walk out the door for a minor pay increase at your competitor. Or even worse, a long term employee leaves after years of your support, only to start his own business and is now your competition, with knowledge of your customers, pricing and other vital details.

Now you are faced with running an ad for a new employee only to find the quality of replies is limited or non existent. Welcome to the 2012 skilled worker drought.

In 2008 there was over 200,000 unfilled job openings according to the Australia Employers Network. In the USA, the US Bureau of Labor statistics reports there were over 3 million unfilled job openings as of August 2011.  

More specifically within the plumbing industry there is an aging population of highly trained plumbers.  Many young adults that, in earlier years would have made perfect candidates for plumbing apprentices , have have chosen to other work categories to apply their efforts. Trade schools are less popular to high school students than universities and more and more students don't want enter the labor force as their fathers did before them.

Even existing plumbers are finding their knowledge can be less than adequate as Australian Government enacts environmental regulations which plumbers must learn about, retrain and adhere to.  Plumbers now must understand sustainability issues and adjust their skill set to incorporate energy and water saving measures to their projects. The end result is that professionals choose to leave the industry rather than continuously train themselves or their staff.

Despite these shortages of skilled young plumbers salaries and income levels have remained flat (or even declined when you consider the increased cost of living expenses).  Predictions are for higher wages and increases in the future but right now, that's just not happening.

Existing trade schools have also been slow to adopt the latest technologies and green environment techniques that continue to be in growing demand.

2 - Poor Economic Conditions

These past four years have seen some of the highest economic declines since statistics were recorded.  The Sydney Morning Herald reported during the midst of the global economic meltdown that the Australian Economy would shrink faster than the global average (in 2009).  

The result is that during the past few years the Australian economy has actually contracted by as much as 1.4%.  Even current National Treasurer Wayne Swan admitted "there had probably never been a more difficult time to put together a budget."

Yet despite this recession, raw materials continued to increase including the supplies that so many professional plumbers use.  Copper, steel, PVC pipe and everything in between continues to increase as well as daily operating costs such as gasoline, medical expenses and other business expenses.

This push and pull economy has put an unusually tough strain on plumbers who struggled to maintain profitability.  Most cut back where they could, including reducing or eliminating advertising and marketing expenses.  Yet this was probably the worst time to do that because it has made increasing profits much less likely.

3 - Abysmal Housing Market

While the overall economic downturn affected all of Australia there was a specific category that affected tradesmen. As a result of the worldwide economic recession Australia suffered a housing slump over the past few years that has significantly impacted the plumbing industry.   The global recession resonated through the housing market resulting in the lowest housing starts in decades and declining or flat home prices (according to government statistics).

With less homes being built, the demand for plumbers to install home plumbing and fixtures dropped dramatically since 2007.  Plumbers that had once focused on new home projects were forced to compete with plumbers that were currently doing existing home and business replacements and upgrades.  This increased capacity drove competitive pricing down and hurt the whole industry.

With so many plumbers fighting for limited work many got out of the business (see section 1 again) and those that remained were less than excited about the category yet had very few viable options for increasing business or decreasing expenses.

Further enhancing this situation is the poor financial condition of many people living in existing homes.  These people have been forced to put off many plumbing projects they want handled until better times come or they try and do-it-themselves which typically results in a less-than-satisfactory result.

Preparing for the Future

2 Easy Steps to Build Business and Change Your Own Economy

If you're plumber working their way through the conditions featured above then nothing that has been mentioned surprises you.  The explanations are useful but the conditions are the same regardless of the reasons.

To prosper in this continually evolving economy you have choices.   You can either give in to the problems that face you and everyone like you and close your business and take a job working at McDonalds.  Or, you can take matters into your own hands and create your own economic conditions.

One of the most critical steps for any successful plumbing business is proper marketing techniques.  The odd thing is, that proper marketing is rarely taught at any trade schools nor does any one business have a handle on the perfect marketing plan.

Unless you have your head in the sand for the last 15 years then you probably realize that correctly utilizing the internet for your marketing program is the way most growing businesses prosper.  If your customer is over 60 they may still may be going to the printed Yellow Pages or newspaper classified, but if your customer is any younger than that, you can be pretty much assured they are going to their laptop, tablet or smart phone to find the services they need to help them.  Of course this includes any trade related small businesses such as Plumbers!

Consider the following ideas as the cornerstone to any proper marketing plan for a plumbing business.

Step One: Start With A Listing on a Plumbing Website Directory

As the volume of websites increases into the millions many customers shopping for services find it difficult to use search engines for locating the type of providers they need. 

As an example, type "Queensland Plumber" into Google and see what you get.  The results include listings like "plumbing suppliers, plumbing unions, plumbing guidelines, how-to plumbing help" and more.  So for a homeowner looking for a few names of plumbers the task all the sudden becomes much more complicated.   Now they are sifting through over 20 pages and 300 entries which can be overwhelming when they just want a good neighborhood plumber.

From the plumbers side of the equation you may have spent hundreds or even thousands of dollars on a website that may or may not show up on the first few pages of your customer's search.  There are of course many methods to move your search engine listing further forward, but those techniques change by the month and are usually far beyond the comprehension of most plumbing contractors.  You can pay an internet marketing expert to do engine optimization for you but that is going to cost you even more money.

Consider "Directory Marketing" as a viable option for building your presence on the Internet.  Directories are typically one of the top search results when consumers explore service help.  Directory marketing allows you to appear within specific categories of  your expertise for a customer that is shopping. Consumers love directories because they can find a plumber in their area almost instantly.

The obvious downside of directory marketing is that you are listed along with your competitors.  However you can very often buy additional advertising options within the directory listing (see below) to make your business stand out, much like you could when the Yellow Pages was popular.

If you do have a website, you can usually link your directory ad to your website so when a customer wants to learn more about your business the information is a click away.  You may also have an option to set up a web page within the directory, should you not have a website of your own.

Even further, with directories you can promote your business within multiple categories.  So for example if you do steam fitting in addition to residential plumbing you may advertise that in the HVAC portion of a directory.  And if you also do thermo-heating plumbing that listing may appear in a different section of a directory as well.

All in all, directory advertising makes a lot of sense for plumbing contractors as it does for almost any business.  It's a low cost way to build your internet presence and increase sales and profits for your plumbing business.

Step Two: Expand Your Presence with a Graphic Directory Advertisement

If  you use the Internet with any regularity then you are keenly aware of the increasing volume of advertising featured on almost every web page.  This phenomenon is no accident but more of a process.  It's a result of the millions of dollars that used to be spent on newspaper ads, magazine ads, direct mailers, flyers and handouts that are now migrating to the Internet.

Directory advertising is probably the most useful web advertising available because people using directories typically have money in hand and are ready to make a purchase. They come to a directory to find a supplier and begin work.  Your ad makes your business stand out among the rest.  Web advertising in other locations is often wasted on casual browsers and unwanted visits.

Reach your target customers immediately.  Your company ad will only appear to people looking for plumbing support so nearly 100% of the views are useful.  Ads in other web locations such as Google search and generic websites can result in almost 80-90% waste.  The internet advertising system is great about promising numbers but it rarely delivers the kind of quality ad views you will see from directory advertising.

The advertising you place in directories results in some of the most easy business you will ever get, and best of all, with analytic software, you can measure the results and increase your directory ad program for even more sales.  Prices for local plumbing directory advertising are some of the most competitive available.

If you don't have a website, many directories will furnish a single page for you to create your own web presence.  In many cases if you provide the right information this is more than enough for people to call you and schedule service. 

What if you choose NOT to advertise or list in a directory?  Essentially to those customers that visit one, your business doesn't exist and you will loose sales to your competitors.

Another benefit of directory listings and advertisings is that many young apprentices use these as starting points for job applications.  Young plumbers want to work at a location they believe is successful and if you are not listed or advertising in the most popular directories they most likely will choose one of your competitors that IS there.

You Can Survive

Sure it's tough out there for plumbers, but the reality is that if you ask anyone in any other service industries you will find they face similar challenges.  So, it's never as simple as just jumping ship to some other profession.  You can survive if you run a good business and you know how to get the word out to potential customers.

It appears the economy is rebounding and housing starts are expected to increase in the coming year.  While no one is jumping for joy quite yet, this is a time to set yourself up to grow with these improvements.

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