Plumbing Companies Listen Up. M.A.P. Vs P.A.M. Helps Avoid Massive Grief!

Plumbing companies
I'll be this guy has a big heart.

This Article Will Focus On the two methods used by all Plumbing Contractors to start and operate their Plumbing Companies.

Most Plumbing Companies Are Started By Plumbers With Technical Skills

They Wanted More Than A J.O.B. (Just Over Broke) – And they had dreams of working fewer hours and earning more money with long vacations and lots of toys!

All Too Often Their Reality Check Bounces – and they end up worse off financially than they would have been if the kept their job.

Plumbing Companies
The Bouncing Reality Check

In most cases the destruction of their Plumbing Company dream occurred over a course of time and what happened were little leaks under $20 each that snowballed and took them down.

The Little Leaks Sink The Ship – Not the big gaping holes. The big gaping holes get the Plumbing Contractors attention and are fixed.


Technical Know-How Is Every Plumbing Contractor’s Enemy #1

“In construction, the real money is made in the office; not in the field” – Randalism

All Highly Skilled Construction Tradespeople – Possess a higher than average intellect and very adept problem solving skills because they operate in a constantly changing environment. Every day brings new challenges. In some ways it is more difficult than being a doctor since doctors have one make and two models, male and female.

The Skills That Make A Great Plumber – Are primarily technical; however, the skills that make a great Plumbing Company are strategic. To borrow from several authors who have written extensively on the subject “If the Grand Strategy is Correct – The enterprise will prove successful; however, efficient operations cannot overcome bad strategy” – Paraphrased from Sun Tzu.

For Example A backhoe takes longer to mobilize and demobilize on and off a job site than a shovel, and it takes more skill. Tactics means using a shovel for all earth moving projects. Strategy means knowing when to use a backhoe and when to use a shovel.

Most Popular Easiest Method

Production, Accounting, Marketing (P.A.M.)

Production = P

This Is The Most Popular – And least profitable way to start and operate a Plumbing Company. Plumbing Contractors have a paradigm of “how things are done” which mirrors exactly what they did while working for somebody else. Install pipe, valves and fixtures!

When They Are Awarded A Project – From a friend or relative they do what they have always done….put on their tool-belt and get to work installing pipes, valves and fixtures!

They Perceive – Having little or no overhead and since they want to make a name for themselves they work cheap, I mean real cheap.

Some New Plumbing Contractors – Feel adding a markup on materials or sub-contractor invoices is wrong if not illegal and in some cases due to ingrained religious teachings they fear putting their immortal Soul in danger or maybe they simply want to save their customers some money. If the Plumbing Contractor invests time, effort and expertise they deserve to be compensated fairly.

Plumbing Companies
I’ll bet this guy has a big heart.

Some Big Hearted – Good natured Plumbing Contractors are under the illusion that if they work real hard and keep their prices low their Plumbing Company will magically prosper. The reality is they own something less than a J.O.B. which is costing them money and it offers little or no health insurance, no retirement fund and no benefits!

Accounting = A

When Tax Forms – Nasty letters, assorted mail and phone calls from the local, city, county and state tax agencies and the IRS 940 and 941 notices pile is when the Plumbing Contractor starts thinking about their contractors bookkeeping services problem. All too often they go on the hunt looking for a cheap bookkeeper and really get hurt

Plumbing Companies
Everyone in business knows what this is!


“If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur.” – Red Adair

(world renowned contractor who was extremely skilled at extinguishing and capping blazing, erupting oil well blowouts on land and offshore.)


Next They Start Bouncing Checks – Paying bank fees and returned check fees to the stores. Go to another bank and repeat the process at least twice more.

The Bookkeeping Path – Do-It-Yourself / Get Stuck / Take QuickBooks Class / Still Stuck / Hire Cheap Bookkeeper / Lose Sleep / Get Aggravated / Repeat Entire Process Several Times / Outsource To A Contractors Bookkeeping Service And Stop The Insanity!

Marketing = M

When The Low Hanging Fruit – Friends and relatives with “honey-Do-Projects” are done they wait for referrals to come rolling in and yet for some unknown reason the phone hardly ever rings.

When The Phone Rings – Is it a “Customer” or a “Client”. There is a HUGE difference between them. A “Customer” is looking for an “honest contractor” also known as someone who works for less than dirt wages and will throw in lots of extras at NO CHARGE! A client is looking for a Professional Plumbing Contractor who will solve their problems!

Business Cards And Webpages – Are generated with words like Quality / Best Services / Low Prices / No Job to Big or Small / which means nothing because quality and speed are standard operating procedure now. The question is what makes this Plumbing Company different from all the other contractors?  What is their USP (Unique Selling Proposition)?

Game Over!

They Eventually Go Out Of Business And Into The Seven Stages Of Grief:

  1. Shock & Denial

    Plumbing Companies
    The Game is Over
  2. Pain & Guilt
  3. Anger & Bargaining
  4. Depression
  5. The Upward Turn
  6. Reconstruction
  7. Acceptance

Least Popular Hardest Method

Marketing, Accounting, Production (M.A.P.)

This Is The Least Popular – and yet the most profitable way to operate a construction company. Contractors who think and act like a business person.

Marketing = M

Plan Your Work Then Work Your Plan – Do what successful wealthy business people do on a sustained basis. Develop and maintain a well-defined and DOCUMENTED BUSINESS PLAN (not “It’s all in my head”)

Business Plans Come In Three Flavors:

  1. Good = In the Plumbing Contractors head
  2. Better = Quick and dirty to get a loan or performance bond and ignored
  3. Best = Document regularly updated, referenced used for strategic planning

We Have Helped A Number Of Contractors – Put together documented business plans and every one of them who actually finished it and use it have the same general comments:

  1. “At first I thought you were just wasting my time and money!”
  2. “That was the hardest work I ever did”
  3. “I thought it would never end”
  4. “I got sick of hearing Randal talk about “Processes, Systems and Dr. Deming”
  5. “Now I understand what Randal means when he says “Success is a foregone conclusion”
  6. “I wish I would have listened to Randal and done it a long time ago”

The 80-20 Rule Applied To Plumbing Contractors

  • 20% of your customers normally generate 80% of your net profit

    Plumbing Companies
    A Universal Truth 80/20 Rule
  • 20% of the goods or services you sell contribute 80% of your revenue
  • 20% or 2 out of 10 of your staff create 80% of the value for your clients

The Frightening Consequence – For most Plumbing Contractors is that 8 out of 10 hours drives almost no value to the bottom line and the biggest drain is trying to save money doing their own contractor bookkeeping services instead of reviewing the Key Performance Indicator (KPI) Reports put together and maintained by their Contractors Bookkeeping Services Provider.

The Real Value – Good contractors bookkeeping services can bring your construction company is an understanding of where your 20% most profitable clients are and they are rarely who you think they are. They are found inside the job costing reports including the job profitability reports.

Reviewing Your Key Performance Indicators (KPI) – Every business day you help you know exactly who your best customers, jobs, services, or products are and you could end up refocusing your efforts on doing more Plumbing projects that pay better for each of the standard Job Profitability metrics that are tracked and managed by most successful Plumbing Contractors like gross revenue per hour by Journeyman, apprentice, laborer, heavy equipment and the corresponding net revenues.

Use The Information – Presented above and write a story to describe the people you enjoy working for because they are your “Prime Customers” and they are your target market. Then document the demographic and psychographic profiles of the people you enjoy working for and why.

Develop Your Plumbing Company Business Plan – And pay close attention to the marketing section because that is where you will decide what niche of the construction market you will dominate. Know that in time your Plumbing Company can become legendary to such a degree you clients will be raving fans and referrals and a critical part of your marketing strategy. Nordstrom has been very successful at this and it would be wise to learn from the leaders.

Accounting = A

Outsource Your Contractors Accounting Services – To a firm that specializes in Construction Bookkeeping and Accounting Services because it is a chore for you and in most cases we can do the job for much less than an in-house bookkeeper because we have a construction accounting system.  If you need help call Sharie 206-361-3950 or email her

Learn To Read Your Financial Reports – We can guide you on which reports to pay attention too and why certain reports can make you more money than other ones.

Production = P

This Is The Final Stage – To launching your successful Plumbing Contractor firm. This is where all your hard work pays time and effort should pay off. If you have a DOCUMENTED BUSINESS PLAN (not just a dream, wish or idea) you will have developed basic operation manuals for your field and office employees. These documents answer the questions you will be asked 100’s of times automatically. It is the “Wikipedia” of your company. “Who We Are And How Things Are Done Here”.

You Have – A road map to help you achieve financial and personal success in your Plumbing Company and all you have left is to assemble the tools, equipment, employees and setup your trucks and/or vans and go to work! I strongly advise you put together your Board of Advisors, because you will need them and they will be of great value to you!

About The Author:

Randal DeHart, PMP, QPA is the co-founder of Business Consulting And Accounting in Lynnwood Washington, www.FastEasyAccounting.Com  He is the leading expert in outsourced construction bookkeeping and accounting services for small construction companies across the USA. He is experienced as a Plumbing Contractor, General Contractor, Project Management Professional, Construction Accountant, Intuit ProAdvisor, QuickBooks For Contractors Expert and Xero Accounting Specialist and Bill.Com Guru.

I leave you with this heartfelt blessing – “You have a lot of support on this website including the owners, editors, contributors and readers and all of us truly care about you. In addition you have your own personal network of friends, relatives and mentors cheering you on to achieve your definition of success in your plumbing or whatever Construction Company or related industry. You do not need to go it alone, read, share, comment, agree or disagree it is O.K. because as it is written “Iron sharpens Iron”. You have a voice and together we grow stronger. As the rising tide raises all ships we lift each other up with our words, thoughts and deeds.”

Warm Regards,

Randal L. DeHart, PMP, QPA

By Randal DeHart

Randal DeHart, PMP, QPA is the co-founder of Business Consulting And Accounting in Lynnwood Washington. He is the leading expert in outsourced construction bookkeeping and accounting services for small construction companies across the USA. He is experienced as a Contractor, Project Management Professional, Construction Accountant, Intuit ProAdvisor and QuickBooks For Contractors Expert. This combination of experience and skill sets provides a unique perspective which allows him to see the world through the eyes of a contractor, Project Manager, Accountant and construction accountant. This quadruple understanding is what sets him apart from other Intuit ProAdvisors and accountants to the benefit of all of the construction contractors he serves across the USA. Visit to learn more. Randal DeHart - Is a Certified PMP (Project Management Professional) with several years of construction project management experience. His expertise is construction accounting systems engineering and process development. His exhaustive study of several leading experts including the work of Dr. W. Edward Deming, Michael Gerber, Walter A. Shewhart, James Lewis and dozens of others was the foundation upon which our Construction Bookkeeping System is based and continues to evolve and improve.

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