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Case Study – Working capital financing for Plumbers

 In Case Study, small business financing, Working Capital financing, zip capital group

Zip Capital Group provides working capital financing for plumbers and plumbing companies to grow their businesses

Zip Capital Group provides working capital financing to small businesses of all types and size.  In this case study, our client is a smaller residential and commercial plumbing company located in a mid-size inland California City.  We document their experience growing their plumbing company using working capital funding from Zip Capital Group.

Background

Tom learned the plumbing trade working alongside his father growing up in Southern California in the late 90’s and early 2000’s.  This was in contrast to his older brother Alan who opted instead for the sand, surf and fun of the beach.

As the brothers transitioned into adulthood, Alan chose to go to college while Tom decided on a career in the trades.  Starting as a plumber’s apprentice in a mid-size mom and pop plumbing shop in Southern California, Tom learned the in and outs of the trade while Alan earned a college degree in marketing.

In 2009, Tom met his future wife through a friend of a friend.  The two hit it off immediately and chose to make their relationship permanent in the fall of 2011.  

Two year’s later, Tom’s young family was to grow adding a third member in the form of a baby boy.  Not one to disappoint the love of his life, Tom agreed to move to Central California where his wife was born to raise his son amongst family. A second benefit was that homes in Central California was sufficiently cheaper that he and his wife could actually afford to be homeowners.  

Because of the network that Tom’s wife family had built in Central California, Tom was able to find a great plumbing job at the business of a family friend.  Unfortunately, within three months of buying his new home and starting his new job, the owner of the plumbing business that hired Tom died of a heart attack.

Because of the relationship between Tom’s wife’s family and that of his employer, Tom was offered the business at a price he could not refuse.  Within a year of his relocation to Central California, not only was Tom a new homeowner, he was a business owner as well.

A quick transition to growth

Tom had always been a hard worker.  As a result, it was not difficult to transition his new business into a growth phase.  He leveraged his wife’s family’s extensive network to get new clients including a few commercial accounts.  By 2015, Tom had sufficient business to add a new plumber to the payroll.

In early 2016 Alan, Tom’s older brother lost his marketing job when his employer was acquired by a larger competitor.  Open to the slower lifestyle away from Southern California, Alan and Tom began talking about the possibility of working together to grow the business.  That would necessitate relocating to Central California but Alan and his family were open to the idea at that point in their life.

Alan joins the company

Two months after Alan and Tom first entertained the idea of working together, Alan relocated his family to Central California to help grow the business.  Once the brothers defined their growth initiatives, they set about looking for financing.

At the urging of another friend of the family, Tom reached out the Zip Capital Group to discuss options for his business.  Tom called Zip Capital Group at (800) 739-xxxx and spoke with Eric, a small business specialist.

After a 30 minute conversation with Eric, Tom determined that a Zip Capital Group working capital loan was just what he needed.  He applied online completing the application process is 35 minutes and within a matter of hours, Tom received official notification that his application had been approved.

The business was approved for a $45,000 cash advance but Tom opted to only take $35,000.  Once the paperwork was completed online, Tom’s cash advance was funded within 36 hours.

Capital as a catalyst for growth

With funding for the business, Tom spent about $15,000 for new equipment and inventory for his plumbers to keep in their trucks.  This enabled them to offer their plumbing clients added services during their residential or commercial repairs leading to bigger repair bills.

Another $15,000 of the funding received was spent on marketing activities.  Alan was able to build a new website and put together a digital marketing campaign.  He was also able to clean up all of the business’ marketing channels resulting in more leads coming in.  

The remaining $5,000 was put into the savings accounts of the business for life’s unexpected emergencies.

Zip Capital Group’s working capital funding had its desired effect.  Tom was able to increase the average repair bill for his service by $25 by stocking his trucks.  A coordinated marketing message resulted in more leads coming in and sales training under Alan’s leadership, resulted in a more bookings leading the more sales.  

The result from the working capital funding provided by Zip Capital Group was an increase of sales of close to 18% in the following months.  So good in fact that Tom took sought out additional funding once Zip Capital Group was repaid in order to further increase operations.

About ZIP CAPITAL GROUP

Zip Capital Group is a leading small and medium-sized business lender working with companies in a wide range of industries. In addition to equipment loans, we can help your business with:

  1. Working capital loans
  2. Equipment loans
  3. Merchant account advance
  4. Referral programs

Contact us or call (800) 795-3919 to talk to a medical company funding specialist.

 

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