Expanding Your Income Stream

How do you make your money these days? Are you a service shop? Are you a commercial, residential or industrial contractor? How about a retrofitter or a remodeler? While it is difficult to pigeon-hole what we all do into one of these groups, it is also true that many companies categorize themselves in this way. 

If service work is your primary source of income then you consider yourself a service shop, even though you probably do the occasional remodel, custom home or small commercial job (like a tenant improvement for a strip center). Likewise, if your shop does large municipal, commercial or industrial projects, you still probably do small service repair work, alterations and retrofitting for your clients, even if you don’t actively solicit this type of work.

If you make money from these jobs, even though they may only be a small or ancillary part of your operation, you are diversifying. In the jargon of today, you are creating “income streams.”

If you already have as much work as you can handle (few do these days), or want, then work outside of your primary niche can be considered a nuisance, but how many of you out there can say that you truly are so swamped that you’d turn down the opportunity to make a few bucks just because the work is outside of the normal course of your business? Cultivating these smaller niches could turn something that is a bother into another reliable income stream. Of course, moving in that direction can be costly up front, but if there is a light at the end of that tunnel it could be rewarding too!

New technologies, new ideas, new opportunities

Beefing up your efforts to increase marginal income from work that is not a usual part of your day-to-day operations is but one way to diversify your income streams. The advent of new technologies as well as the current “green” agenda has opened the door to many, many more opportunities to fatten your bottom line.

On the technology front, digital equipment has taken the “art” out of some of the most basic work both plumbing and HVAC contractors do and turned it into high tech child’s play. Balancing duct systems used to require a lot of manual labor and experience to accomplish quickly and well. New hand-held digital meters that register air flow and temperature remotely now make such work a snap. Sewer cleaning and rodding was a task that required a modicum of experience to do correctly. While almost anyone can run a drain cleaning machine, it takes experience to adequately determine the type, and distance, of the stoppage and not lose a head or snap a cable in the line.

Today, we have digital video cameras that can not only show a picture of the stoppage, but can record the distance from the clean-out and give a real-time view of the condition of the entire line. These are only two examples of how technology has increased the opportunity to make money within your already existing business. Investing in this type of technology can allow you to offer services that you could not, economically, offer before.

The “green” agenda has also opened up new fields, which an astute and savvy businessman can take advantage of. Energy audits have become almost mandatory in municipal and commercial settings. Starting with high SEER rated HVAC equipment, better duct sealing and insulating, as well as low-flow toilets, shower heads and flow restricting aerators, touchless faucets... the list goes on.  

Local, state and federal governmental entities have created a gold mine for the trades. I recognize that it is difficult to remember that your task was to drain the swamp when you are up to your butt in alligators, but let’s be real here, the government has created its own monster, in both specification and payment. Once you learn the ways of said monster you can make a good dollar by making it your pet. Truly, the convoluted nature of government work makes anyone who understands it an invaluable asset to a bureaucrat.

And another thing... 

Retrofitting old style fixtures and systems, especially when mandated by the federal government can move your company into an entirely new area while your investment in both equipment and personnel can be negligible. After all is said and done, you are already in the business. You have the education, material, personnel and equipment to do this type of work. Contacting local, state and/or federal governmental agencies about energy audits should set off all sorts of bells among the department heads. There is nothing a bureaucrat likes more than to make themselves look good on the public’s dime.

Following on the heels of energy audits, the new buzzwords “energy management” makes everyone smile. What those two words mean to you as a contractor depends on how much effort you want to put out to get new business. As with energy audits (which focused on identifying and then maximizing efficiency and minimizing waste of resources such as water, heat, electricity, etc.), energy management means taking the audit to the next step and making the program ongoing.

Going after it...

As an example, let’s say that Tiny Town, USA has half dozen buildings that they want to have audited for waste and efficiency because Uncle Sam has mandated it, and also dangled the carrot of grant money if the town complies. ABC Plumbing and Heating contacts the mayor’s office (or whatever the local head of government is called) and offers to do the audit for X number of dollars (income stream #1). The town then agrees to affect the repairs recommended by ABC Plumbing and Heating and to have them do the job (income stream #2). After the repairs have been made, ABC Plumbing & Heating solicits the ongoing maintenance and upgrading contract for the buildings as part of the energy management program (income stream #3).

This same scenario can be extrapolated through commercial, industrial and to a lesser extent residential work. The potential for increasing your company’s bottom line is limited only by your imagination and willingness to go after the business.

With our economy on the ropes after COVID and the political tinkering that has been done of late, any increase in income is welcome, I am sure. Having the ability to go after these suggested income streams is something that most businessmen can do easily. So why not?

The Brooklyn, NY-born author is a retired third-generation master plumber. He founded Sunflower Plumbing & Heating in Shirley, N.Y., in 1975 and A Professional Commercial Plumbing Inc. in Phoenix in 1980. He holds residential, commercial, industrial and solar plumbing licenses and is certified in welding, clean rooms, polypropylene gas fusion and medical gas piping. He can be reached at [email protected].