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How to start a plumbing business from scratch

A man leaning on a shelf of water pipes in a store looking into the camera.

Starting a plumbing business from scratch isn’t easy. But if you have the skills and drive to make it, the sky’s the limit for your success and profitability.

However, it takes more than being an experienced plumber to succeed. Knowing how to start a plumbing business requires: 

  • A good plumbing business plan.
  • Financial backup.
  • The development of a customer base.

Whether you’re a professional plumber with an established business or a new entrepreneur, this guide outlines the essential steps you need to learn how to start a plumbing business from scratch.

Steps to starting a successful plumbing business

There are many steps to consider when learning how to start a plumbing business. Careful planning using the following points will help you create a successful business model and solid financial plan.

1. Get your licenses and required training

Whether you’re going solo or have staff, it’s important to make sure everyone working on jobs has the correct training and licensing requirements.

Different countries and states have different requirements, so you’ll need to check your local licensing board.

There are also differences between commercial service and residential plumbing certifications, and specializing as a licensed plumber in a particular area can give you a competitive advantage.

2. Research your target audience

Knowing your target demographic helps you understand how to:

  • Market your business.
  • Have parts and plumbing tools for common problems.
  • Set yourself apart from the competition.

If you’re a residential plumber, being able to take credit cards on-site helps you get paid faster.

With this information, you can tailor your services to the customers you want to reach.

3. Create a business plan

A solid business plan outlines the target goals you need to hit to be successful. Because it sets a strong foundation for your business, it’s a crucial step when learning how to start a plumbing business. 

When you consider future expenses, earnings, and how you’ll run your business, you get a better idea of your goals and what you need to do to achieve them.

What to include in your business plan

Your business plan describes your:

4. Get financing (if needed) for equipment

The plumbing industry requires many specialized tools that shoot up your startup costs.

If you don’t have the capital to invest in plumbing equipment upfront, consider business loans or leasing options. Make a detailed list of necessary equipment and factor in any loans or financing in your business structure.

Apart from essential plumbing tools and materials, plumbing software also helps you run your business more efficiently and effectively — especially if you manage a team of plumbers.

After putting it to the test, using plumbing software to calculate the fastest route planning solution between jobs and managing your customer information saves enough time to add another job to your workday! Being able to work faster and with fewer bottlenecks means more money in your pocket.

5. Register your business and get insurance

When registering your business, you’ll need to choose a company structure. This can include:

  • Sole proprietorship.
  • Partnership.
  • LLC.
  • Corporation.

Research the differences and choose the one that best fits your business plan, then register your business with your local services office. 

Next, contact an insurance company for liability insurance and workers’ compensation insurance. Business insurance protects your business and any employees against problems that happen on a plumbing job, such as property damage and injury.

6. Price your plumbing services

A large part of knowing how to start a plumbing business is knowing how much to charge for your work.

How you price plumbing services depends on your:

  • Local area: See what competitors charge for the same services and price yours accordingly. You can tweak this figure higher or lower depending on the demand for plumbers in your region.
  • Expenses: Calculate overhead costs, such as vehicle maintenance and gas. Do you need to rent specialized equipment? Add up your expenses and include them in how much you charge.
  • Profit margin: This is how much you get to pocket after the job is done. On average, this can be anywhere from 20–35% of your total charge.
  • Value to customers: If you have a master plumber license, are experienced in a niche field, or provide high-quality plumbing services, make sure to charge more for your additional value.
  • Taxes: Research how much money you’ll need to put aside to pay your taxes. A good rule of thumb is 35% of your income.

Remember that you may be able to expense costs related to running your business. Keep track of things like vehicle mileage, gas, and equipment maintenance costs to claim money back at the end of the tax season.

7. Get leads

If you’re starting a plumbing company from scratch, you’ll need to build a customer base.

Popular sales strategies to accomplish this include:

  • Networking with local contractors and realtors.
  • Attending industry conferences.
  • Cold calling and door-to-door advertising.
  • Creating a website with a search engine optimization (SEO) strategy.
  • Advertising online, in local ads, or even using company vehicle branding.
  • Posting to social media accounts.
  • Offering promotions or gift cards to new customers.

Having an online presence is an effective strategy for success, as it lets potential customers find out more about your business before they contact you for a service. As a result, you get a higher volume and quality of leads.

8. Manage and grow your customer list

Generating positive reviews is a good way to build new customer relationships and give leads confidence to choose you over a competitor. Leaving business cards when finishing plumbing projects leads to a more positive customer experience.

Make an account on review sites and a Google Business Profile so people can leave customer reviews after you complete a service for them. At the same time, new customers will know how to contact you for plumbing work.

Remember that even negative reviews can still be helpful to gain information about valuable customer expectations.

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Benefits of starting a plumbing business

Knowing how to start a plumbing business comes with a wide range of benefits. With your new independence, you can 

  • Personalize your services to the customer demographic you prefer.
  • Have control over business decisions.
  • Gain a higher earning potential.

Plus, there’s also the sense of professional growth and personal satisfaction you have over running your own business.

Flexibility and financial freedom

Perhaps the largest benefits of knowing how to start a plumbing business are the flexibility and financial freedom you gain.

As a plumbing business owner, your income has no external cap. What you earn directly relates to how much work you can take on and the pricing strategy you use.

Plus, you never need to request days off. If you need to take a day for your kids, plan a trip, or are feeling sick, you set your own schedule.

Earn more at your pace

As you continue to grow your reputation and customer base, you can adjust your rates to take on more complex, higher-paying jobs. As the owner, you take on exactly as many jobs as you want.

As your business grows, you can choose to hire technicians to take over some of your workload. This gives you more free time to focus on other tasks while you can still oversee operations.

How much money do you need to start a plumbing business?

You’ll need to know how much money to start a plumbing business is required before you start handing out flyers. Your cost breakdown depends on a number of things:

  • If you need to purchase equipment.
  • Whether you require loans or financing.
  • The size of your operation, including number of employees.
  • The cost of a plumbing license and other legal requirements.

That said, our research indicates that the average cost of starting a plumbing company is $19,000. This number can be higher or lower depending on the factors listed above.

Wrap-up: How to start a plumbing business

Knowing how to start a plumbing business requires: 

  • A strong operational plan.
  • Networking skills.
  • A lot of elbow grease. 

Not everyone can make the cut. In fact, our findings show that 50% of plumbing businesses fail in the first five years.

But the payoff to being your own boss is the flexibility to grow your business the way you want, with total control over its operations.

By following the strategies outlined above, you can achieve financial independence and the satisfaction of owning and growing your own plumbing business.

Start building your plumbing business today with your free plumbing estimate template!

Image credit: rh2010 via Adobe Stock

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