Don’t be the cheapest backflow tester.
There’s a fantastic article in Plumbing + Hydronic Contractor Magazine this month, titled The 5 P’s of Success. Author Richard Ditoma outlines the problem with undercharging customers, “I tried to explain that work that costs him more money than that work brings in to his business is work that is worth losing. Contractors must fear losing money more than losing work.” This rings so true in the backflow testing industry.
Work Worth Losing
One backflow testing company that I’ve worked with directly chooses not to charge some of their customers, for a variety of reasons. I understand the value of trade: a backflow test or two is worth a free work truck alignment. What two backflow device tests are not worth is a plate of warm cookies to take home. This example happens every year to a company I’ve worked with. When I inquired with the owner why they didn’t charge for the tests his response was, “Oh, I don’t charge her because she bakes me cookies.” I get it. Cookies are delicious. But that is not a successful business. This cookie-scenario leads to two problems. The first, each time that the customer needs her backflow prevention devices tested, the company makes no money. Secondly, that the owner of the company has to be the one to test the devices, because an employee needs to be paid in money, not cookies. This cookie-exchange has gone on long enough that attempting to charge the home owner would create problems; this is work worth losing.
Put emphasis on real, paid work
This goes back to understanding the true cost of running a business. How much time is spent on any one given backflow device? How much travel time is associated with each device? Then, there are materials. Backflow devices fail, on average, 8% of the time and need repairs and materials. But that’s not all I am referencing. What about gauges, yearly calibration, and truck maintenance? Consider that those are materials to be accounted for. Suddenly, that customer that doesn’t pay isn’t just not making you money, it’s costing you real, paid work. If you’re a business man, you need to understand it’s no longer worth it to test the device.
I have a lot of these stories: testers not wanting to charge the full amount to an older woman, for instance, because she was elderly. While that’s a sympathetic approach, it’s naive and unnecessary. Look for work that is worth having. If you no longer test those home owner’s backflow devices, they will call someone else, and those people will charge them fairly.
Maintaining a business is fair
Charging fairly, by taking your expenses into consideration, is how to run and maintain a solid backflow testing business. Referencing Ditoma’s article again, take time to evaluate and properly prepare your business. One wonderful point Ditoma makes is to weigh “the value you add to society,” and I think this speaks to the business owner who wants to provide too-cheap of service.
The ultimate reason that the backflow technician mentioned above isn’t charging the home owner because she supplies him warm cookies isn’t because it’s a fair trade. It’s because he’s being nice. But there’s something more important at play; keeping drinking water clean from contaminants is more than nice. It’s an asset to society. Understanding your company’s worth is essential in having a financially sound backflow testing business.
Consider evaluating how and why you fluctuate in charges towards your customers. And make sure that the work you do is work worth having.