There’s a reason so many business owners offer both HVAC and plumbing services. The truth is, it can be incredibly profitable to provide customers with both. Many organizations start by offering both of these services from scratch, while others begin with one or the other, then expand at a later time. While it can be a great move, there are naturally some pitfalls to avoid. Let’s explore some of the biggest benefits – along with the most common traps – of running both an HVAC and a plumbing business.
It’s in the Numbers: Diversifying Businesses is Profitable
The logic is simple: add more services, and you’ll attract more business. Many business owners achieve this kind of expansion by simply growing services and adding new revenue streams related to their present industry. But for plumbing or HVAC businesses, adding the other service is also an incredibly lucrative option. Combined HVAC and plumbing contractors represent a $170 billion dollar market, and the market is still growing, meaning it’s a great time to expand.
Despite the draws of expansion, it is still important to understand that you can’t just add services without doing thorough research on the market, business best practices, and industry trends. These two service industries have many similarities, but they’re certainly not identical.
Avoid Catastrophe by Learning the Pitfalls
It’s unfortunately very easy to run a successful business into the ground by adding more services (or even acquiring a brand new company) without understanding how to integrate those new services into your existing business model.
One difference between the two industries is the profit margins. Plumbers and HVAC technicians need to be paid using different structures – simply copying and pasting payroll from one to the other is going to wreak havoc on your finances. Doing so will either seriously overpay your HVAC technicians (leading to an unsustainable business) or underpay your plumbers (meaning you’re going to find it hard to keep good plumbers around). Even for plumbers who are also HVAC techs or vice-versa, the pricing and payroll structures will need to be different depending on the service call.
Expansion Benefits Both Your Company and Your Clients
Not only does expansion to both HVAC and plumbing offer many new and lucrative revenue streams, it makes your company all the more attractive as a one-stop-service-shop for clients. In fact, lots of clients are getting used to HVAC and plumbing services offered by one company, which means that it’s a good move to stay afloat in today’s highly-competitive market.
If you’re already in business in either HVAC or plumbing and are considering expansion (or are considering starting a new business in addition to your current one) one great option is a franchise opportunity. For those already in business, franchisors are experts at helping business owners navigate the changes associated with expansion including business modeling and restructuring, marketing, payroll support, and more. For those looking to start fresh, franchisors equally help new business owners navigate the landscape of this powerful service combo to support your success.