This 26 year-old plumbing and water treatment business has developed a reputation for service trucks that are large enough to be called “a complete store on wheels.” Located in an interior suburb of a major Midwestern metropolitan area, this business is divided between 70% water treatment/softening, 20% plumbing and 10% furnace/air conditioning. The water treatment portion of the business is particularly profitable and represents a fantastic opportunity for a new owner to enjoy margins that would otherwise make other entrepreneurs of different businesses quite envious.
The owner experimented as a young man with forays in both construction and auto glass prior to pursuing plumbing and water treatment based on his growing interest in becoming a Master Plumber. In the early days, the company relied on telemarketing strategies to grow the business and the company grew very quickly—particularly in the water treatment area. It was fast discovered that many plumbers did not like the water treatment work and would happily refer this work to this company. As an added bonus, the water treatment business was very profitable on a margin basis when compared to other divisions of the company. The business differentiated itself with large “a complete store on wheels” service trucks that created an opportunity to offer quicker response times and make one trip to a customer rather than as many as three trips with a smaller vehicle. This created additional efficiencies for the company and greatly enhanced customer satisfaction.
Plumbing, water treatment and furnace/air conditioning needs will likely grow in 2021 as more and more people are forced to work from home as a result of the COVID-19 pandemic. Unable to escape to a comfortable office and, in many cases, watching children learning from home (rather than school) will amplify the need to make sure the home is in proper working order. Repairs that could have been put off prior to the pandemic will likely be moved to a more urgent status as everyone is home for the foreseeable future. Certainly, robust competition exists in this segment, however, the “a complete store on wheels” service truck differentiator for this company puts it at a distinct advantage to competitors who may be larger, but rely on smaller service trucks necessitating multiple trips to a single customer account. Efficiency and nimbleness has it's rewards.