The Complete Guide to Starting and Running a Plumbing & HVAC Business

Plumbing & HVAC as a Business Foreword 1) Transitioning From Technician to Business Owner a) The difference between being a good technician and running a successful plumbing & HVAC business. b) What type of work would you like to focus on? c) How large would you like to grow and how fast would you like to get there? d) Can the geographic area of your operations support the type of business you want to establish? e) Do you have enough capital to start a business and support it (and yourself) while its growing? f) Getting around the Contractors Dead Zone.

2) Getting Started a) Legal Requirements, Licenses b) Incorporating, L.L.C., Sole Proprietorship and the Main differences between these entities and their distinct Advantages and Disadvantages c) Accounting d) Insurances 1) Can insurance be a selling point? 2) If you work as a subcontractor, do general contractors have minimum insurance requirements and can not having enough insurance hurt your chances of getting a profitable job?

3) Business Plan a) What is a business plan? b) Do you have one and why do you need one? c) Contractors Business Plan 1) A Description of your business 2) Where do you see your business in 1, 2, 5, 10,..years 3) Analysis of the Market and your Competition 4) What are your Strategies to compete in the Current Market? 5) More detailed description of your Services and Products 6) Marketing and Advertising Strategies 7) Describe your Operations 8) Your Financial Plan 9) Business Plan Software

4) Initial Capital a) Making a realistic assessment of your finances and your available funds and do you have enough? b) Building your business structure or customer base first? c) Sources of capital: 1) Bridge loans versus Longer term loans. 2) Small Business Administration and their loan requirements, Sample 3 Year Comparative Balance Sheet Column Chart of Comparative Balance Sheet Chart analysis

3) Credit cards as temporary sources of revenue 4) Partners and Investors 5) Friends and relatives (remember the old adage Never go into business with friends and relatives?)

5) Locating and Setting Up your Business a) Local Zoning b) Does it make sense to work out of your home and save the money you would have otherwise spent on rent? c) Will the type of business or specialty area you choose dictate where and how you need to operate? d) Does having a P.O.Box as a business address affect the types of jobs you get? e) Will you have employees working out of your house? 1) Safety Issues 2) Privacy Concerns 3) Personal liabilities and general coverage f) How much of a difference does having a live person answer the phone actually make? g) Can you attract good employees by working out of your home?

6) Hiring Employees Sample Organizational Chart for a Plumbing & HVAC business a) When and where do you really need them? b) How much can you afford to pay and what is the going rate. c) More benefits versus more salary.

d) Means of finding employees 1) Placing Classified Ads Sample Classified Ads for Technicians e) Screening prospective employees over the phone. f) Interviews, Hiring and Probationary Periods Sample -Work Experience Questionnaire for a Technician Sample - Non-Compete Clause g) Negligent hiring and your liabilities.

7) How to be an Effective Manager a) Setting an example. b) Company Policies Sample of a Company Policy & Procedure form c) Scheduling Employer Employee meetings d) Make it your business to know where they are and what theyre doing e) Dont make your favorite employee obvious to everyone and try not to make exceptions to your own rules. f) Show your employees your appreciation, but dont overdo it! g) Know what and when to discuss with your employees regarding your business finances h) Avoid micro-managing. i) Give your employees incentives to work harder and better. j) Why your employees should be asked not to discuss their salary and benefits packages between each other. k) Disciplining employees and documenting it.

l) What to do when employees dont get along with each other. m) What to do when its time to fire an employee.

8) Procuring Vehicles - Equipment and Supplies a) Vehicles and Equipment - Buy, Rent or Lease? b) Tools c) Supplies d) Discounts

9) Estimating - Pricing Methods Contracts a) Residential Service and Light Commercial Work: 1) Time plus Materials Method Estimating Example #1: 2) Flat Rate Pricing Method 3) Custom Pricing Systems b) Commercial and Industrial Work 1) Architectural / Engineered Blueprints - Plan Take-offs 2) Electronic Estimating Qualifying your Bid List of common reasons to qualify your bid 10) Marketing Strategies - Advertising and Bids a) Do you know who your target customers are? b) What is your advertising budget?

Example # 1 c) Where to Advertise 1) Yellow Pages (local phone book) 2) Newspapers and Magazines Sample Newspaper Ads d) Assessing your Advertising Example # 1 e) Direct Mail Sample #1 Direct Mailing Letter of Introduction Sample #2 Direct Mailing Letter of Introduction f) Networking g) Web sites h) When can you start decreasing the amount of money spent on advertising? i) Should you join an online service that promises to find you new customers (or leads)? j) Home warranty companies and should you sign on? k) Bids and where to find them-(linked) Small Business Administration Central Contractor Registration Federal Business Opportunities Federal Acquisition Regulation Dun and Bradstreet l) Are you keeping an eye on your competition? m) Realistic Self Assessments and their Importance

11) Daily Operations and the Different types of Work and Customers a) The difference between going to work for someone else and opening up your own business. b) Unless you have a substantial initial capital, you are going to be wearing many hats. c) State Regulations and Permits Requirements d) Why taking out Permits and having the work inspected is so important e) Inspectors and how to deal with them f) Different types of Work and Customers and what you need to know. 1) Residential customers Sample Residential - Questionnaire 2) Commercial - Industrial customers 3) Municipal and Federal Contracts 4) Maintenance and Service Contracts 5) General Contractors and Sub-contracting 6) Aligning yourself with other Trades 7) Acting as a General Contractor 12) Profit Margins - Determining the Value of your Service, Getting Paid and Collections a) Profit Margins b) Real or Theoretical Value? 1) Youre in the business of selling value. Example # 1: Example # 2:

2) Perceived Value and Marketing c) Making the Sale d) Collecting your money 1) Payment policies 2) Collection Scenarios Sample Collection Letters Example #1 Example #2 Example #3 3) Small Claims Court 4) Collection Services Sample Credit Card Authorization Form (with a non-cancellation clause)

13) Project Management a) Planning - Scheduling the Work Gantt Charts Example #1 Sample Gantt Chart b) Estimating Work Time Accurately

14) Cash Flow Management Cash Flow / Business Software

15) Maintaining your Business

Retaining your customers Customer Service

16) Planning for the Future (exit strategies & selling your business) a) Determine the market value of the business b) Prepare a Profit-and-Loss Statement Example #1 Sample 3 Year Comparative Income (Profit and Loss) Statement Column Chart for Comparative Income Statement c) Find a business broker d) Determine the terms of sale and financing options