At C3, we hear a lot of stories about various business models. Rather than keep these ideas secret, we’re starting a new series called Business Corner. You’ll see these blogs pop up occasionally from myself, Jeremiah, and Brock. This is our first one in the series – and stems from a customer of ours who has just this year decided to stop working on irrigation systems and focus solely on backflow testing.
One of the difficulties in running an efficient irrigation business lies in the personnel. That is, keeping the good ones around. Many irrigation businesses lay off workers in the slower months. When September or October rolls around, these great workers are stuck looking for other seasonal work. If they find a good job, they might not return to your sprinkler business in March or April when the irrigation calls start rolling in.
But is there a way that could be reduced? A way that you could hold on to these great employees year-round?
The answer may lie in backflow testing. Full-time. Instead of using backflow testing as a supplement to income, maybe now is the time to weigh the pros and cons of only doing backflow tests.
When is the time right to consider backflow testing as the one thing your company does?
Let’s take a look at whether this a good time to consider solely backflow testing.
Digging ditches isn’t something that is sustainable forever. And most small business owners are active in the field work of their business. That means if you have a well-running small business, with no desire to expand, you might still be digging ditches at 60. Does this sound tru to you? I promise you, you’re not digging them as fast as when you were 25. So at some point, maybe you need to give that up for your own health, and backflow testing is a lot easier on your body. If you’re tired of working like a dog during the hot months, and sitting idly by in December, this might be a good time to start thinking about how increasing your backflow testing portion of your business could impact you and your company.
Another reason to consider switching to backflow-testing only is when it makes sense to have more financial balance, rather than the ups of summer irrigation work and the downs of, well, minimal work in the middle of January when it’s 30 degrees out.
A common misconception is that backflow testers test devices for the 4 or 5 months in late Spring and Summer. That’s typically true if you’re only doing tests on irrigation systems and occasional commercial testing. It’s easy to forget that high-hazard and fire line backflow prevention devices are required to be tested as often as quarterly. This depends on your municipality, but devices in high-hazard environments are usually tested twice yearly. If you schedule your customers efficiently, you could maintain steady business instead of deal with ebb and flow.
What should you consider before sending Dear John letters to all your sprinkler customers?
Before you burn all your shovels, there are some things to consider.
First, look into the average backflow testing price in your area. If you’re normally charging $45 but you find five other companies that charge $20 in the area, this is problematic. It’s likely you’re able to charge that amount to your customers because they may also rely on you for irrigation turn-on, winterization, and sprinkler maintenance. You’re also the guy they call to install new sprinkler systems, so it’s a no-brainer.
But this price difference is troublesome for a couple of reasons. The most obvious: you’re not going to be making enough money if suddenly your backflow price decreases by $25. You’d now need to do 2 tests before seeing the same income as one test. Having your employee do it is going to be making you less money than before.
Additionally, if you keep your price at $45 for the average residential or commercial backflow test, but don’t offer any other features, you’re not likely to obtain new customers. Instead, the customers who rely on you to install new sprinkler systems may just have the new guy do the test for them.
If you call a few companies and an average price for your neck-of-the-woods is fifty bucks and you’re charging $45, you’re in a good position to consider this avenue.
Take a look on yelp, or just google “Backflow testers” in your area. If there are several companies that come up with backflow actually in their name, you might have a tougher time only doing backflow tests. It’s simple. A person receives a slip in the mail from their water department letting them know they need to get their device tested. If they have a guy they normally call, they’ll email or call him up and get it scheduled. If they don’t, they’ll do a quick search, and try to get a hold of a couple companies with “Backflow” in their name. It’s just the most obvious thing to do from a consumer’s perspective. So it’s likely that those companies already have a large grasp on the market. Obtaining new customers in this scenario will be harder. Doesn’t mean it’s impossible, just tougher.
What else should you consider? Many jurisdications require backflow testers to be further licensed when testing non-residential devices. This is an obvious up-front cost, so you need to decide if you’re going to pay for your employee’s extra licensing or have him continue to only test irrigation devices. (Many testers want to have a year-round job, though. They most likely won’t scoff at getting further licensed if you reassure them you’re heading in that direction to test high-hazard devices.) Consider other up-front costs, like additional equipment you may not own currently.
You’ve decided it’s time to specialize. What now?
Okay, you’ve chosen to cut way back on irrigation work and focus primarily on cross connections. How do you stand out from the crowd of others already testing?
1. Advertise – gone are the days that people look at the yellow pages. Consider google Adwords. Send out direct mailers that have been spell-checked. Have an ACTIVE social media including Facebook and twitter that links appropriately to a WORKING website. Not good at social media? Hire your kid to do it for two hours a week. Which leads me to ….
2. Have a functional website that directly states you focus on backflow testing.
3. On that said website, note your email and your phone number. (Better yet, use our customer portal – but that’s not the point I’m trying to make right now.) Do not make it hard for consumers to contact you. Don’t list your cell phone number that goes to a personal voicemail. List a business phone number (with stated hours on a voicemail) so a potential customer can easily get a hold of you. I can’t tell you how many times I’ve gone with someone’s competitor simply because they returned my call before someone else.
4. Offering a coupon or packages as a promotion is a great way to catch new customers.
5. And number five, I’m going to return back to follow through. Return emails that day. Return phone calls as soon as you can. Provide phenomenal customer service. From the moment the customer picks up your mailed coupon, to after you’ve provided the customer with his backflow report, provide the type of service that makes the customer use you again next year.