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In this month’s business advice column, Aaron McLeish discusses the seasonal nature of the industry and suggests some strategies to ensure you have a steady flow of work all year long.
Trade for a plumbing and heating business tends to fluctuate with the seasons. In the colder months, the phone keeps ringing with breakdowns, installations, repair works etc. As we move into the summer months when people use their boilers less, the breakdown calls tend to tail off, therefore, decreasing the workload.
But it doesn’t have to be this way…
There are many ways to effectively deal with seasonality. I’m going to share four with you but brainstorming with your team on what would work best for your business could be a good place to start.
Drumming up new business with your existing client base is a great way to get started. People who have been through the know-like-and-trust process* (see top tip below) are more likely to be interested in working together again.
It is so much cheaper to look after your existing client base than it is to acquire new customers through advertising and promotions.
Commencing April 2022 the government announced some VAT changes. If you search for VAT Notice 708/6 you’ll see information on energy-saving materials and heating equipment. Providing certain conditions are met on the works you are supplying and installing, you will be able to apply the reduced rated or zero-rated VAT to certain works.
You can use this to your advantage to iron out the decreasing trade in the summer months, e.g. if you were to supply and install new TRVs or heating controls this would attract the zero-rated VAT saving the client 20% of the cost (for domestic customers). That’s attractive to a lot of people, especially in current times when we’re seeing a high rate of inflation and extortionate fuel bills.
If your clients aren’t aware that they can benefit from not having to pay the VAT on certain works then tell them! Inform them through your advertising channels of the savings available to them. If you are scratching for works in the summer months why not contact your existing client base and inform them of the savings to be had!
Another idea to help out with seasonality is the annual routine service required to validate warranties and landlord certificates. The plumbing and heating industry is a great example of how repeat custom can benefit businesses. Year after year your clients will come back to have their boiler serviced, which means repeat business for you. Landlords must have an annual CP12, it is a legal requirement. That is a big benefit for the plumbing and heating industry, they benefit from repeat business by default.
You could change the month of the routine service by bringing it forward to the summer months. Try offering discounts in the summer to incentivise clients to have their services during your quieter months. In doing this you can iron out your workload throughout the year and free up your engineers for breakdown calls during the winter.
Introducing a policy where employees can’t have time off during the busiest periods of the year could be an effective way to manage seasonality and ensure your business runs smoothly during the winter months. It would be fair to offer some flexibility, but you could offer an incentive for holiday to be taken when it benefits the business. This way your engineers are on hand in the winter months and take holidays during the summer months. This could also reduce overtime payments in the winter and idol time in the warmer months.
Another way to help offset the effects of seasonality is to fluctuate your prices. Charging more during the busy months and less during the quieter months could help you even out trade throughout the year. This pricing strategy allows you to attract budget shopping customers during the slower months. Instead of changing your base price, you could try offering discounts and incentives during the summer to generate work and fill diaries? By fluctuating your prices, you can help to manage seasonality and keep your business running smoothly all year long.
Seasonality is a reality in the plumbing and heating industry. However, by following the simple advice given in this article, you can help ensure that you have a steady flow of manageable work throughout the year. Don’t be a victim of seasonality, get creative!
*Top tip – In any business relationship, the know, like, trust factor is essential. First, the potential customer needs to know who the business is and what they do. Then, they need to develop a rapport where they start to like you and build mutual trust. Once that trust is established, it forms the foundation for a strong and lasting relationship.