How to start a plumbing franchise
Demand for plumbers is very high, why not plug a hole in the market?
It's as true now as it was when the ancient Babylonians were walking the earth – we just can't do without plumbers.
This is good news for you if you are thinking of making a living out of plumbing – unlike some businesses you can be certain that there is a demand for the services that you are providing.
In fact, demand for plumbers is very high at the moment and is likely to grow for some time to come. The Institute of Plumbing and Heating Engineering describes the skills shortage in the industry as ‘massive' and complains that not enough attention has been given to establishing training schemes.
They predict a shortfall of 27,000 plumbers by 2007. While this is bad news for anyone with a broken pipe it's good news for anyone hoping to make some money fixing them.
There have been a rash of stories in the news recently of plumbers commanding huge salaries as a result of the skills shortage in the industry.
It is simple supply and demand economics – and you will be in demand.
Who is suited to a plumbing franchise?
The stereotype of a plumber held by many people is of a stocky middle-aged working class man in grubby clothes. However, don't let this narrow image put you off.
Plumbing now employs people from a diverse range of backgrounds and ages and there is nothing stopping you from entering the trade because you are female. The most important thing is to decide if you want to do it and if you are likely to enjoy the work.
David Powell, who runs a Reactfast plumbing franchise in Dudley, took on a female plumber as his first employee and says that he has been very lucky to have her on board. However, he admits that female plumbers are a ‘rarity'. The industry is constantly changing as new and innovative products and methods come into use. Plumbers need a good grasp of maths and will be open to new ideas for the entirety of their careers.
Some of the problems you will be solving are going to be very complex and will require some ingenuity so don't think that this is a trade of brawn over brains.
Although it is a rewarding business, plumbing is also tough trade to pursue. It is physically demanding, involving heavy lifting, clambering up and down stairs and into peoples' lofts and the use of spanners, wrenches and other hand-operated tools.
It can also involve working in cramped and uncomfortable conditions and sometimes involves working at heights. So if you suffer from claustrophobia or vertigo you should get first-hand experience of the plumbing trade to see if you will be able to cope doing it every day.
Needless to say it can also be a dirty job as you will be involved in ensuring sanitation is working properly, meaning you will deal with sewage and toilets. So if you are too squeamish and don't like getting your hands dirty then this might not be the trade for you.
However, plumbing franchisees generally aim to employ plumbers to do such jobs while they manage the business. Gary Wroe took out a Drain Doctor franchise in Glasgow. He decided to get some experience in the trade before he did so and worked for a few months for a plumber for free, although this wasn't a requirement to getting the franchise. “Franchisees aren't expected to do the plumbing as you employ plumbers but you end up getting involved,” says Wroe. Wroe says that running the business is very hard work both physically and mentally.
“It is very hard. The hardest that I have ever worked in my life,” Wroe says. “It is a 24 hour business and the phone can ring at any time.”
David Powell agrees: “The hardest thing I found was the commitment in terms of hours. I work 81 hours a week. Not all of this is necessarily working time, but you are always on call.”
How does a plumbing franchise work?
Plumbing franchisees buy the license to a territory where they will be the exclusive operator for the business. You will have the right to trade under their name, use their logo and benefit from the company's training and support. They will introduce you to their ‘business model', which ought to cover everything from pricing to taking on staff to handling customers and actually doing the job.
Some plumbing franchises, such as Plumblocal or Reactfast, provide training to the new franchisees and so you don't actually need to be a qualified plumber in order to do the job.
David Powell received six weeks plumbing training and one week learning how to run the franchise. He says: “The training is a bit like to learning to drive. You do everything but just because you have got a license it doesn't mean that you are an experience plumber.
“In the classroom all of the nuts come off first time and all of the measurements are metric – it's not like that in real life. “It's a start, but you really learn through experience.”
Others franchises, such as Drain Doctor, just train you to run the franchise rather than to actually be a plumber.Their one-week course involves learning how to run the business. The franchisors are instrumental in making sure that you have plenty of work to do. Many run call centres 24/7 and hand all the work in your area over to you. They also provide advertising, marketing and promotion to ensure those lines are busy.
Some franchisors also provide services such as financial administration and credit control and as with most franchises there is usually some support services to help you when you are encountering problems. In short, they will run the core centre of the business and you take on one of the offices and handle the work as it comes through.
The benefit of this is that franchises are usually a lot more stable and predictable than running your own independent business. However, the franchisor will take a percentage of your turnover. Although franchisees still say that in general you can make a very good living, you will have to work hard for it.
Franchising offers tried and tested models but this is not necessarily the right option for an ‘original thinker' who wants to do it his or her way. Franchising is for people who want to benefit from the past ideas of others and are prepared to work hard to make some money out of them.
Compare this with the information in our guide on how to start a plumbing business from scratch.
How much can I earn?
In some ways this is like asking how long is a piece of string. As a franchisee you will be able to set your own salary so you can earn big cash if your business is running well.
Gary Wroe made £150,000 in his first year, although he hopes that he will make far more in the future. David Powell expects to make a similar amount by the end of his first year and likewise predicts upward growth.
Your success depends upon not only how hard you work but also how well you are able to run your business. Remember that by becoming a plumbing franchisee you are not just a plumber but also a business owner. You will have to be able to manage your staff and this can sometimes depend on luck as much as anything else.
If you are able to run one area successfully then you will be able to buy another territory and potentially double your takings.
Successful franchisees typically want to do this as it is the best way to gain real financial success. Further down the line you will be able to sell these territories at a higher premium to other vendors. Make sure this is the case before you buy.
As mentioned, you buy the license to work in a set territory. Costs vary as do the packages that are on offer, but an initial investment of £30,000 is quite common.
A Reactfast franchise costs £29,500 plus VAT and includes the territory, full plumbing training, marketing pack via an intensive eight-week training programme. You will also need to purchase a vehicle and tools and, according the British Franchise Association (BFA), minimum investment will be just under £43,000.
Plumblocal charge £12,000 plus VAT for the franchise fee and their offer includes a three-month training programme as well as the territory. The BFA says that minimum investment is £27,500 for this franchise.
Drain Doctors charge about £30,000 for the licence to the territory, however their training only lasts one week and is centred on running the business not plumbing.
They do, however, offer plumbing training while you are working although it is expected that you will employ staff to do most of the work for you. The BFA say that minimum investment will be £35,000.
There are other plumbing franchises out there and so it is best to research as much as possible to find the one that is right for you.
Do not make a decision based on cost alone, as it is far more important to find a business that you really want to run. If you enjoy running the business then you are far more likely to be successful at it and will quickly make back your investment.
Training courses can be attractive and getting a plumbing qualification is an advantage. However, you will not be working when you are doing this and not all the courses are available in your area. So additional rent will be another cost.
Many franchisees take out loans in order to buy their license. Banks are often more likely to put money into franchisee than they are a new business as they are deemed to be a lower risk. Also, many franchises have agreements with banks and so they will be able to advise you on where to go.
However, make sure you fully understand all the terms and conditions before signing an agreement with the franchisor.
Tips for success
Be prepared for hard work
Not only is plumbing physically demanding but the hours are very long, so don't expect to be sitting with your feet up.
Generate your own business
Although the franchisor runs call centres you will get a greater percentage of the bill if you generate your own business directly. So be prepared to do some advertising and get your name and number well known in the local area.
Learn to deal with staff
Good employees are crucial to your success and you need to hold on to them in the long-term if you are to expand. One franchisee always advertised for staff even when he didn't need them, as he could never predict when one might leave. Read around about management and talk to other people who you believe have good management skills and learn from them.
Get to know plumbers
As this is going to be your business then it is essential that you get to know people who work in the trade. You need to think ‘are these the type of people I can get along with, employ and manage?' Also, getting contacts in the industry can only be of benefit.
Listen to the franchisor
There is no point taking out a franchise unless you are prepared to take on board all that they say. The formulas for success devised by franchisors work and you will be in a position to benefit from these tried and tested formulas. In short, if you really just want to go your own way then this is not the right route for you.
Working from home
Initially this can be a great way to keep costs down and after your initial investment you will probably be very keen to get some money in the bank. So think about converting a bedroom into an office and a garage into a store-cum-workshop.
You will get better
This will involve a sharp learning curve so don't worry if you make a few mistakes in the first few months, as most people do. However, you will have the back-up of a strong franchising model behind you and you will be successful if you believe in it, work hard and are willing to learn from your mistakes.