Expanding a contracting business into a new state provides challenges and opportunities for plumbers and hydronic heating professionals. These unfamiliar markets could lead to larger customer pools and increased revenue.
While the circumstances could be favorable, business expansion could also be overwhelming. How should contractors approach the next phase of their business development?
Here are seven smart strategies for operating in a new state.
1. Research the Market
Before drawing a business plan, contractors must research their target markets. This phase will reveal the area’s demand for plumbing and hydronic heating services. The new city may need more companies to serve its population within the metropolitan area, thus allowing another plumbing and hydronic heating professional to bring their services. The research will unveil the various gaps contractors can fill with business expansion.
Market research will also assist in financial strategies. The accumulated information will reveal how other contractors charge customers for their services. Knowing this data gives plumbing and hydronic heating professionals an idea of their pricing structure and whether competitive costs are attainable.
Contractors can be more flexible on their charges if there is little to no competition. They’ll also gain information about marketing and labor costs during this phase.
2. Establish Relationships
Expanding into new states means establishing relationships with suppliers and industry partners and leveraging existing relationships to ease the transition. The local chamber of commerce is an excellent resource for finding the most relevant industry professionals to help a contracting business. Plumbing and hydronic heating contractors should locate construction companies, HVAC professionals and electricians to build a network in the new area.
Building a network can involve contacting businesses and establishing partnerships. Another effective strategy involves joining local trade associations and attending industry events.
These organizations are networking hubs, letting plumbing and hydronic heating professionals meet key community members and take advantage of resources. For instance, the Georgia Plumbers Trade Association (GPTA) provides continuing education classes and updates on code changes.
3. Learn From the Competition
Meeting industry professionals provides insight into their strategies for marketing, pricing, project management and subcontractor relationships. While emulating their approach can be helpful, new businesses can successfully expand their operations by finding the gaps in another company’s business plan. For example, the company could grow with HVAC services to create a one-stop shop for customers and their contracting needs.
Advertising is another area to take advantage of. A contractor’s marketing campaign could target a specific medium, such as radio or local TV. Plumbing and hydronic heating professionals entering the area should consider a different approach, such as the internet.
Online marketing should be a priority because it has a solid return on investment (ROI) and is typically less expensive than radio, television or print.
4. Recruit Local Talent
Expanding operations involves hiring new employees to provide services for the community. While some talent can come from existing locations, hiring local professionals who are familiar with area practices and can provide personalized services is best.
One example of critical knowledge local employees can provide is of local building codes. For example, a licensed plumber in New York City knows drains must be 36 inches below the finished grade where the septic tank connects.
Local talent also has advantages in navigating the city’s nuances. For example, a licensed plumber in the area will be more accustomed to the government’s permit requirements. With this knowledge, they could file their paperwork more efficiently or have connections to make the process easier. These professionals can also connect new businesses to inspectors, HVAC contractors and other valuable contacts.
5. Leverage Social Media
Finding local plumbing and hydronic heating professionals can involve job postings and connecting with trade associations. How can contractors take the next step in their hiring? Leveraging social media lets a business adapt to modern practices by expanding its online presence. Facebook is an excellent platform to start because of its broad reach within communities. Instagram could be another strategy to target younger professionals.
A sound social media strategy helps companies reach local customers and build brand awareness. Locally-focused social media helps small businesses compete with larger companies by distinguishing them from competitors. A strong social media presence accompanied by search engine optimization (SEO) will mean customers are more likely to see a smaller company in the search results before a national agency like Roto-Rooter. Google Business Profile is an excellent starting point for new operations.
6. Manage Transportation Needs
Contractors typically bring their services to the customer, necessitating transportation solutions. A company’s fleet size depends on its operations and budget priorities. Tighter finances could mean leasing vans, thus alleviating concerns about maintenance costs. Owning offers more control but could bring liabilities. For instance, worn parts could lead to expensive repairs if there is insufficient maintenance.
7. Prioritize Online Reviews
One aspect some contractors miss out on is the power of online reviews. Plumbing and hydronic heating professionals perform services for individual customers and businesses, so the quality of work and friendliness are integral to satisfied clients. Positive reviews can significantly impact a new company’s reputation and online presence. Businesses should ask customers to leave good feedback to ensure others in the community see their excellent work.
How essential are online reviews? Experts say they can make a difference when customers decide which contractor to hire. A 2024 survey finds that reviews impact 91% of consumers and their perceptions of brands. While negative reviews are unwanted, contractors can improve their reputation by politely replying to these comments. The survey finds that 88% of people would patronize a business responding to reviews, whereas only 47% would use one that doesn’t reply.
Plan for Success
A new state presents opportunities for plumbing and hydronic heating professionals. The expansion requires careful planning, including a new business plan, market research and talent hires. That said, smart outlining can bring success after the transition.
Contractors should prioritize finding gaps in existing local businesses and leveraging new technologies to stand out. Social media helps contractors find talent and develop a cost-effective marketing strategy. They can then confidently enter a new state and welcome the influx of customers.
Oscar Collins is the Editor-in-Chief at Modded. Follow him on Twitter @TModded for frequent updates on his work.