Featuring Ed O’Connell
Intro: Welcome to Profiles In Prosperity with your host, David Heimer.
David Heimer: Hi, I’m David Heimer. Welcome to Profiles In Prosperity. Today, we’re speaking with Ed O’Connell. Ed is the founder of O’Connell Plumbing, which in my opinion, has the best tagline ever, “The only plumbing company, highly recommended by my mother.” It is both hilarious and clever, which is typical for Ed O’Connell. A little bit about Ed, he founded, grew, and ran O’Connell Plumbing. He built O’Connell Plumbing into a very successful residential plumbing company and sold it a few years ago. Among his long list of accomplishments, Ed was named the Service Roundtable “Contributor of the Year” and the Tom McCart “Consultant of the Year.” He is an industry consultant and he is a mentor to two Service Nation Alliance contractor advisory boards. So welcome Ed, thank you for agreeing to talk with me. One of the consistent problems we hear from business owners is that they can’t find good people.
Now, you developed a program that I was always really impressed with called Two to a Truck that parity trainee with a journeyman. You use this program yourself. You were very successful with it and now you’re teaching that program to other companies that you mentor at Service Nation Alliance. So, I was wondering if you could walk me through this program, explain how it worked, and what it did for you.
Ed O’Connell: Okay. What I’d like to do first is give you a little history. I basically got tired of trying to find new help, as long ago as 10 years ago, maybe even 15 years ago. I just couldn’t find good help at all. And that was “experienced” quote-unquote. I kept getting just a rash of folks that said they were this, that, and the other thing, and then when I put him to work, they didn’t prove worth anything. The main reason I decided Two to a Truck was to train somebody else; give them a chance for a heck of a great career and grow my own people; train the way I wanted them to be trained, and to have the kind of loyalty that you get for it. Folks who you give a chance to. And that’s how the Two to a Truck got started and that was the only reason. Along the way, this will come up as I describe in other great benefits that came about from this, and so I’ll start from there.
It’s just a great business model. It combines the ideas that I use to get me on a fast track to growth without hiring experienced plumbers. It was simple. One of the byproducts that was absolutely fantastic was, it made me more money. Once I understood billable efficiency, it really took off as far as more money goes. So basically, what it did for me was open the door to “recruit for attitude and train for aptitude” and we’ve all heard that before. So that’s how I got started.
I got started because I wanted to grow my own and then other things came along. To do this job though, to follow this model, you must be priced accordingly. You must understand that service work billable efficiency is based on four billable hours a day because of the travel time because of a million different reasons. You’re lucky if you get four billable hours a day from one guy in a truck. So, I had no idea when I put a helper in with a journeyperson that a lot of good things would happen, including more money. Performance Pay – I really like performance pay, became a fan of that after really fighting it for a long time and that really, really worked well.
David Heimer: So, is performance pay a requirement of this program, or is it just something that is kind of a benefit that would help you, it would be a little easier to implement if you had it in place?
Ed O’Connell: It’s not a necessity. I don’t think it would even help you that much. What it does help you with, however, is if you implement Two to a Truck. The performance pay becomes incredibly financially viable for your technician and that will, if nothing else, that’ll really wed him to your company because they’re making a lot of money, they can make a lot of money. My top two guys were making over $100,000 a year. So yes, it was really nice. And one of the things, and this blew me away again, and again, and again, I talk to people and they say, “Well, how did you pay two guys and make money?” And the fact of the matter is, all you really need to do is increase your billable efficiency by one hour to pay for a helper. That’s all you need to do and that will pay for a helper all day long if you’re priced right. So, the fact of the matter is because you have a helper now; if you can get five or six billable hours, my guys average six billable hours a day, which was two hours above the four-hour national average. Those extra two hours, which is pure gravy for me, I started to make so much more, that changed up my profitability from around 8,10 percent up to 15 to 18 percent. To be honest, I never did hit that magic 20, 22 percent that some other guys do, but I had very high labor rates where I was.
So you can have two to a truck and increase your profitability. I think I should take a little bit of time to emphasize this point. You are paying one person for eight hours and they are only giving you four hours of billable time. Now, that should be enough to pay for everything in your company, all your overhead, your salaries, your take, whatever, and still leave you some profit. If you can increase that four hours to five or six hours, you don’t need to raise your rates at all. It doesn’t need to be built in because you can actually lower your rate if you want.
David Heimer: So, what you’re saying is, at your existing flat rate, doesn’t mean that you’ve priced it all right and you’re assuming a billable efficiency of four hours a day. The fact is, the helper is going to make you more efficient, and you’re going to easily pay for him at the existing billable rate because you’re going to get more work done.
Ed O’Connell: Exactly. David, that’s so important because the people I talk to, that’s the hardest concept for them to get. How can I pay two guys and not raise my rates? It really is that easy. My lead plumbers got so spoiled with a helper that if the helper didn’t show up for a day, they were whining all day long. One of the hardest things for our lead technicians to do is do the work; set up the work; do the work; take down the work, and do all the other minor selling jobs that we ask them to do or giving options. It takes so much time. But if our lead tech can be doing most of the work and our helper can be doing to set up; the takedown; the running to the truck for this, that, or the other thing; the cleaning of the truck; the gassing of the truck. All this stuff that our guys just don’t like to do, it makes the morale of your lead tech just amazing. And if the lead tech can turn around and motivate the helper by showing him what a great career they’re getting into, then everybody wins. Everybody just wins right off the bat. So the morale aspect of it is incredible. We give our single or lead techs a job, we send them out to the field and then we just forget about them. They’re out there all alone by themselves and it can lead to lax work ethic and stuff like that. But with Two to a Truck, these guys are really motivated and really moving along.
David Heimer: Better focused. I mean having two people work together, I think increases your focus, doesn’t it?
Ed O’Connell: Absolutely. That’s a good way to put it.
David Heimer: And so, after a period of time, I would think that a motivated helper can assist with more sophisticated tasks and frees up the plumber to do other stuff like a whole house inspection and things like that. Is that right?
Ed O’Connell: Absolutely. There are just no two ways about it. That’s the second benefit, time saved for the lead plumber by simply not having to do all the chop wood, carry water tasks. It’s an amazing thing and it’s such a morale improver. Like I say, after a while, I had technicians from other companies wanting to come to work for me just because they knew they were going to get a helper to be with them all day long. So, it just really worked out. One of the biggest things that work for me and one of the biggest benefits, I’m not held hostage by a trained journeyman who says, “If you don’t give me an extra buck I’m quitting.” I always had someone in the pipeline. I said, “Go ahead, you quit. In another six months, Joe’s going to turn out and he’ll just take your place. I don’t care.” And that attitude on my part helps me be one of that. I love being the boss again. Not nastily at all, but just being the boss. I was no longer held hostage.
David Heimer: It’s one of those problems where you have a really high skilled labor base and there’s just not enough of them. It is possible to be held hostage by your skilled technicians.
Ed O’Connell: You read about it all the time on our forums, all the time. When I say held hostage, I have guys telling me, “I’m not working overtime. I’m not going to pull a weekend shift” and in the old days I had to say, “Okay, well, there’s nothing I can do about it” and try to bluff my way through. Now I could say, “Well, good, guy up the street’s hiring, go see him.” So, I really love that aspect. Another great aspect of this is evaluating and training your future journeyman. Your guys can actually be making money for you now, especially if you start them off. I like to start my guys off in sewer and drain work, within a couple months I can have them in a truck on their own if I needed it occasionally to do certain drain work for me. But as you said, doing all the peripheral stuff and then after two or three months, I could have a guy go out on the water heater job, each has a tank water heater. I’d say, a good 50 to 80 percent of the job could be done by the helper while the main tech was in doing the rest of the selling.
That really worked terrific. The sixth thing I came up with as far as benefits was, I had no anxiety about sending a guy out that wasn’t fully trained because my helpers were always under the supervision of the lead technician, and I love that. I could just rest and relax. Go, okay, I’m not going to call that someone’s house burned down, or there was a flood or something like that. So, I just loved it. I love that part of it. I could actually relax, take time off, and not worry about what was going on in my shop.
David Heimer: Isn’t there also an aspect of this that with two people working, there’s a little bit of each of them supervising the other to some extent, right? You sort of mentioned that with two people you tend to stay a little more focused. But I think it also keeps you possibly from a little of the other tomfoolery that might happen.
Ed O’Connell: Not only that David, but I found out in more than a few cases, my helpers were better managers than my field tech. In other words, if my field tech started to stray off base, the helper would say, “No, that’s what I’m supposed to be doing, you’re supposed to be doing this” and it was all mapped out because I have actually, checklists for experienced teams, and I have checklists for brand new teams, and it worked perfectly. And all you had to do was follow the checklist. I’m a big believer in managing systems and procedures, not managing people. So that really, really worked well like you said. And if presented right and communicated right from the helper to the technician, the technician didn’t mind being managed if it was done in a cool way with a system and a procedure because it made more money. That was a beautiful part of it.
David Heimer: That is good.
Ed O’Connell: I think that’s about it. It is a business model and there’s a huge gray area in between. For example, if you wanted to grow a little bit slow, you can have just maybe one helper that goes back and forth between journeymen. Although, I think that kind of makes things slow down a little bit too much for me. But you can hear this for any way you want to hear it, fast track growth, slow track growth, whatever you like.
David Heimer: A lot of times I hear people say things like, that might work where you are outside of San Francisco, the big city. This is a kind of thing that would work well. But it strikes me that this is something that would work anywhere. Is that true?
Ed O’Connell: It is absolutely true. One of the people that really helped me out to codify this whole thing was a fellow, he’s a member of the Service Roundtable named Troy Gardener, and he works for somebody else, but he and I worked on this together to get it refined. The actual codification of this is really well thought out and proven. If I can brag just a little bit here. I have one client. It just absolutely sticks out in my mind. He’s from the San Antonio area in Texas, and he has gone from just his own self with one truck to hiring a helper. Two years later in Texas, he turned them out as a helper that could go into a home, that’s Texas licensing law – and then three years later, he’s now got six trucks. I think he’s hitting his first million dollars a year and he has to stop his growth; he’s growing too fast because of using this method and he hasn’t hired an experienced guy in the last year.
David Heimer: So, part and parcel of this is, you had a plan, right? You had a training plan. It wasn’t just, hey, I’ll throw this helper into a truck and he’s going to be working with a journeyman, and eventually, he’ll learn what the journeyman has. You had a training plan set up for that guy and you had clear expectations of what he should be able to do three months down the road, six months down the road, nine months, 12 months, etcetera. Is that basically true?
Ed O’Connell: That’s absolutely true. I had what I called the progression plan. And here’s what you get paid, your first three months is what you get paid; your next three months, here’s what you get paid in a year; here’s what you get paid in two years; and after two years, the sky’s the limit with performance pay.
David Heimer: So, Ed O’Connell, thank you so much for spending this time with us today. This has been great information. I think this is a model that any service company could use for growth. I know there’s a lot more about this than we were able to cover. If our listeners wanted to learn more about this or wanted to download some of the documents associated with it, how would they be able to do that?
Ed O’Connell: Well, I am going to upload this stuff to the SRT download Center.
David Heimer: So, the Service Roundtable download Center. Okay.
Ed O’Connell: Right. And then, if anybody wants to get a hold of me, the best way is to drop me an email at Ed.OConnell@outlook.com.
David Heimer: So that’s Ed.OConnell and there’s no apostrophe in it, right?
Ed O’Connell: No.
David Heimer: Ed.O- C- O- N- N- E- L- L@outlook.com. Well, Ed, thanks so much, this has been fabulous. Thanks again and I know that the people who listen to our podcast are going to get a lot out of this.
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