Fixing the Money Drain

CPC PLUMBING

While plumber Darren Clark knows his trade well, he was encountering major problems in running his business, including losing money, working with the ‘wrong’ types of clients, experiencing a high staff turnover, and working long hours. Darren realised it was a sink-or-swim situation, and that he needed help fast if he were going to figure out how to operate better.

Listen to the case study interview:

THE CHALLENGES

The main challenges facing the business were poor targeting and decision-making, inadequate understanding of money issues, and working long hours for minimum return.

BACKGROUND

CPC Plumbing has been operating in the Sydney Hills District since the mid-1990s. The business offers services in everything from burst pipes and blocked toilets to emergency plumbing and gas installations.

At around the 18-year mark, the company was in trouble. Owner Darren Clark describes it as being in “a mess” – much more so than he’d previously realised. The business had lost its way and was losing money, but Darren was not sure how or where profits were being eroded, or how to fix the problem.

1. Poor Targeting and Decision Making

The team was taking on whatever work it could get, but the work was also spasmodic. This meant that when there was no work coming in, everyone was often sitting around waiting for the phone to ring.
The main problem here was that they were not able to identify or target who they wanted to work with. For example, they would often work with older builders who were not the “best fit” for the business. Allowing themselves to be influenced by negativity leading to bad decision making.

Solution:Working with a Maxmyprofit Business Excelerator helped Darren and his team identify who they wanted to and should work with, and where to look for more work. This has helped them improve their targeting, and to only take jobs that are beneficial to the business.

2. Money Loss Issues

While Darren knew the business was losing money, he was not sure how, where or why this was happening. This led to not only poor business growth, but also to being unable to meet family needs as well as hoped.

Solution:The business’s finances needed to be reined in and tracked better – which he was able to do using Maxmyprofit Exceleration Hub tools and resources for financial tasks such as forecasting and setting budgets. He also became better at identifying areas of profitability and loss, and by the 12-month mark, was seeing improvements in his return on investment.

3.Inefficient Use of Time and Resources

Darren was working long hours, and the business was also experiencing a high turnover of staff – indicating time inefficiencies and poor decisions around recruitment.

Solution: The Business Exceleration Program helped Darren re-do his budget with a new experienced trade person in costs. As a result, they appointed the tradesperson and in less than 3 months, he had paid himself.

OUTCOMES

Darren says that Maxmyprofit has enabled him to better see where he wants to take the business in the future, and to plan to make it happen. For instance, the company’s forward plan now includes adding a new tradesperson, apprentice and truck to the business each year for the next four years, and to build the business to a point where he can continue to cut back his involvement on the shop floor, and work more on strategic direction.

Tangible benefits from working with Maxmyprofit include:

  • Sales have grown by 50-60%, and profitability is up by 80%.
  • Darren and his team are now more aware of where sales and profits are coming from, and the types of customers they want to work with – which enables them to know where to look for more work.
  • After years of using the same vehicles, the business has been able to acquire some new trucks.
  • While Darren is working around the same number of hours, he now splits his time 50/50 between operations and strategy.
  • The work is now less up-and-down and more steady than before.
  • After two years of working with an Excelerator, the business has taken on two apprentices, and an operations manager who is also a senior tradesperson.

Darren reports enjoying the Quarterly Exceleration Workshops, where he and other members can share their highs and lows, and know that they’re not alone.

When asked what he would say to a business owner considering wotking with Maxmyprofit, Darren recommends doing it.

“You can develop bad habits without it, and I just wish we’d had the help of Maxmyprofit earlier than we did. We’ve had to unlearn a lot before learning it again.”