5 Tips for Effective Job Management

No matter how big or small the job, many elements go into effective job management. Two business coaches from Quality Service Contractors (QSC), an enhanced service group of the Plumbing-Heating-Cooling Contractors (PHCC), National Association offer plumbers these tips for better managing jobs.

1. Be selective. Don’t take every job, warns John O’Connor, business management coach with QSC and former long-time plumbing contractor in Charlotte, N.C. “Look at it and determine if it’s something that fits into your business model. Don’t get into it if you’re not familiar with it. If it’s something you want to expand into, strive to get the training and job exposure you need to take on the new line of business.” Before venturing into unchartered waters, he recommends joining trade associations and developing a mentor relationship with someone who is competent in that niche.

2. Plan it first. The best, most profitable jobs are planned and prepared for in advance, says Lawrence Snow, a QSC business coach in Lehi, Utah. Proper planning allows you to order all necessary parts in advance of the job. “Even on small jobs, plan the job and look at cost-savings items,” Snow says. He gives the example of using inexpensive hangers that hang pipes. “You don’t have to use an industrial-strength hanger when a standard, ordinary hanger will do the same job.”

Snow recommends you shop around for plumbing supplies and even consider buying supplies out of state to get the best price. “Label materials in advance or have crews measure and cut materials from the building plans at the job site as necessary,” he says.

Having materials ready is a big time-saver and essential to ensuring profits, O’Connor adds. “Pull all material for each job in advance so that technicians can come and don’t have to wait for them.”

3. Examine your pricing. "Many contractors have poor pricing strategies. Typically, they don’t price high enough to support direct costs, overhead costs or build in adequate profit margins to maintain and grow their business,” O’Connor says. As a result, he cautions contractors to avoid setting their price based on their competition. “Every business has unique costs. You need to have accurate financial information in order to price your services properly.”

To this end, O’Connor reminds contractors to properly set up their income statement. “They need to set up their chart of accounts so that costs associated with completing the job, such as permits, wages and materials, are allocated to direct costs, known as cost of goods sold, on the income statement.” Remaining fixed and variable overhead expenses like insurance, rent and advertising, then fall below the gross profit line.

4. Examine productivity. Managing the productivity of technicians and others working on the job ensures profit. “What gets measured gets managed is true when it comes to tracking technicians’ productivity. Tracking your technicians’ billable and non-billable hours and communicating these results on a consistent basis will pay you big dividends,” O’Connor says.

Communication is also critical to avoid profit loss. “Poor communications between the salesman, foreman, technicians, office personnel and customers can contribute significantly to lost productivity. Communication breakdowns are generally caused from haphazard or improperly managed systems,” O’Connor says. Establish specific systems that detail who does what and when, ensuring that all job details are communicated from the bidding process through job completion.

5. Issue change orders. Encourage your staff—whether the job superintendent, foreman or technician—to write up change orders. “So often the client changes the job and the foreman says ‘okay, we’ll just go ahead and do that for you,’” Snow says, noting on-site staff should not perform significant work changes without notifying management. One tactic is to give foremen bonuses for change issues, such as five percent of labor costs on the new labor that results. “Have them write them up, leaving it up to management whether to bill for it,” Snow concludes.