Be a Master of Your Business
I am not saying that you cannot have more than one trade in your business. In fact many businesses, like plumbing and HVAC, complement each other as long as you don’t try to use plumbers to service heat pumps or HVAC technicians to rough in a new bathroom. Where I see the problem is when small businesses try to do too much within the same trade. It’s easy to see; look in the phone book for listings that say “Residential, Commercial, and Industrial.” I have even seen it go one step farther and include “New Construction and Replacement” and then “Service.” There can be as many as nine different disciplines within one trade. I know there are people out there thinking I am nuts. After all it’s the same trade, right? Not really. “New Construction” is radically different from “Replacement” regardless of the trade. “Residential” and “Commercial” are similar but completely different from “Industrial.” Pick an area and master it.
If you are just starting out or relatively small I recommend that you focus on “Residential” work. This is not to say that you won’t do some “Commercial” work but your focus should be on residential. Within “Residential” I recommend that you focus on “Service” and “Replacement” and avoid “New Construction.” I know all the arguments about how much revenue you can generate through “New Construction.” I also know how low the profit is on this type of work and a lot of companies go bankrupt waiting on their next draw. Besides, “New Construction” is tied closely to the economy. It’s great when things are good, but when the economy stalls, it’s brutal. On the other hand, if a furnace or water heater fails in someone’s home, regardless of the economy, they are going to repair or replace it.
Be a master of your business. You will also be a master of your profits.