Scott Spencer didn’t have to look far when he set out to purchase a plumbing business. He had been the general manager of Roto-Rooter in the Seattle area for 12 years and knew that long-standing Jim Dandy Sewer & Plumbing was for sale. The challenge was modernizing and expanding a company so steeped in tradition.

He decided to take the challenge, purchasing the company in December 2012 and immediately implementing changes. One of the first orders of business was extending shop hours from five to six days a week and moving to an hourly pay scale rather than commission. He also invested more than $200,000 in new equipment in order to better serve his customers.

The changes paid immediate dividends. By the end of 2013, the company had seen a 40 percent growth in sales.

Moving to six days a week produced varied reactions among his technicians, but when he explained his vision, and the options he was offering, things fell into place. Four of his technicians decided they would be happy with Sunday and Monday as their days off. Two excavation crews (two men each) also became part of the Saturday staff. Two other crews switched to four 10-hour days per week, and the new six-day schedule has worked out quite well for everyone. Service is also available on evenings and Sundays on a standby basis.

“I believed I could increase my business by 15 to 20 percent with that one move, and it has been successful for us,” Spencer says. “On Saturday there is always a regular dispatcher ready to answer calls from the customer.”

Another big part of the company’s success has been the employees, Spencer says, noting they are the company’s most valuable resource. 

“Human resources were probably the highest priority,” he says. “I also had my business plan, and I stayed right on target with that.”

By the hour

Operating as an hourly shop has set this company apart in many ways. Spencer believes that an employee paid by the hour is much more concerned with the customer than one who’s paid on commission. This goes along with the concept that customer service is top priority.

“I know in the industry that the hourly shop is sacrilegious, however, I believe that this practice will provide a long-term value for the customer,” Spencer says. “It’s not what I get today or tomorrow. It’s what I will get from them over the next 30 years.”

Customers are charged a $49 service fee – which goes to the technician on after-hours and Sunday calls – and $158 an hour for time spent on the job. The whole staff is trained to explain that while the competition may be offering “free estimates,” there will be a charge for the actual service they ultimately provide. Spencer contends that his pricing is a better value – a more straightforward way of taking care of customer needs as opposed to a menu of prices.

“I don’t mind telling people up front that it costs money to run a business. This is what I have to do, but I offer the best value in town. That is the way I run my business, by being up front on the phone. It costs money to send someone to the door, costs money in fuel costs, in equipment and to pay my guys an hourly rate.”

In 2013, Spencer’s equipment purchases included new excavation trucks, plus an additional pipe bursting machine, and he added relining equipment and new cameras.

In another bold move, Spencer went paperless at the beginning of this year. His technicians now use a system from Smart Service, which interacts with an iPad.

“This allows the individual to close out the job through the iPad. There is no need for calls back and forth with the dispatcher. This program maps it all out for them. The technician can take pictures that attach permanently to the invoice,” Spencer explains. “So if there was previous damage, this allows us to have equal footing with the customer if issues arise. This allows the tech to interface with the manager of the job. If the technician runs into something he has never seen before, they can actually have face time with the manager by sending pictures with what they have in real time.

“We email the invoice to the customer and everything is downloaded instantaneously. Payments can be processed electronically.”

Firm foundation

Spencer’s corporate structure includes General Manager Larry Bellach, who has been with Jim Dandy 17 years; excavation manager Ted Toft, who has been with the company four years; and sales manager Bob Kerr. Mel Irons runs the office, and Spencer’s wife, Honey, takes care of the books.

There are 36 employees, up from six service people when Spencer purchased Jim Dandy, and they all report to work on a 1-acre site with a 10,000-square-foot warehouse and separate office.

The growing stable of equipment includes a 1986 Vactor on an International chassis with a 2,000 psi/65 gpm jetter, 1,000-gallon freshwater tank and a 6-yard debris tank. Jetters include a 1995 Lely GemJet (1,600 psi/15 gpm) and a custom-built machine with a 200 hp Saab engine and 300-gallon storage tank, producing 3,000 psi/17 gpm.

There are eight excavators with varying capacities, six large utility trucks and six full-sized service vans that are all equipped for CCTV inspection – the team uses RIDGID SeeSnake cameras with 200-foot reels and CS10 monitors.

The responsibility for taking care of all this equipment falls on the people who use it.    

“We encourage our technicians to care for their equipment, and one thing that helps is feedback from our mechanics,” Spencer says. “My rule is that whoever takes the best care of equipment gets the new equipment. It doesn’t matter if I gave a guy the new equipment three months ago, five months ago, if I do an inspection it is the person who takes the best care of equipment who gets the new stuff. I go down the line. It is amazing how much people care. I have guys washing their truck down every night and taking care of equipment.”

While everyone is responsible for taking care of the equipment, specific work duties within each service are kept separate, mainly for safety issues.

“Some of my competitors might have plumbers doing excavation work because of a commission offered on large jobs,” Spencer says. “Those people might not understand soil conditions, shoring issues and safety equipment. With an hourly shop there is no incentive for a plumber to know how to pipe burst or reline. My technicians are all specialists. My plumbers are specialists.

“That is important because one of my major responsibilities is to make sure everyone who goes out in the morning comes back safely in the evening.”

Drawing lines

Jim Dandy crews most often work on tile and concrete lines. Spencer says the tile lines in the area have held their integrity, while concrete lines are often in pretty bad shape. Ground settling and movement are common problems, and an earthquake some years back caused significant shifting.

“We see a lot of offsets,” he says. “That’s why we’ll often go to pipe bursting. We push that a little more than relining. Fortunately, the City of Seattle allows all procedures. The homeowner is responsible for the lateral line to the mainline.

“Seattle is an older community and there is a lot of rehabilitation needed. We find many customers like to have their line maintained, so we offer the camera for that. They can look at it, and participate, and they want to explore options, and we give them the cost to replace or repair. We have the three services: excavation, pipe bursting or relining.”

Open-cut line replacement is often the best solution, unless the customer is concerned about having to dig down 12 feet and disturb the yard. Then it might be a trenchless solution.

Spencer says that, personally, his choice would be a new line.

Jim Dandy Sewer & Plumbing was well-entrenched in excavation prior to Spencer’s ownership, the mix being 60 percent excavation or pipe bursting to 40 percent other services.  

“We’re doing more like 70 percent line repair and replacement and 30 percent service now,” he says. “We’ll have 20 excavation jobs on my board at any time. We’ve not had a down day since the purchase, and we grew from four to six crews on that side. We went from $3.2 million in sales to $4.5 million in 2013, attributed to expanding hours and line repair and replacement. In 2014, we expect to see a continued growth at 20 percent, or about $5.4 million for the year. ”

Into the next century

In less than two years, Spencer has added services, grown his staff and increased revenue substantially.

Spencer has brought innovation and has broken from some of the traditional ways of running a plumbing and drain cleaning business. Behind it all is the new owner’s simple, steadfast and long-standing rule: The customer is always right.

“There is nothing like goodwill,” he says. “If you do the right thing in business, good things will come about in return.”

More Information

Lely Manufacturing, Inc. - 800/334-2763 - www.lelyus.com

RIDGID - 800/769-7743 - www.ridgid.com

Vactor Manufacturing - 800/627-3171 - www.vactor.com