How to Start a Plumbing Business: A Step-by-Step Guide to Set You up for Success
Thinking about starting a plumbing business? Before you dive in, here’s what you need to know.
Plumbing is a rewarding and in-demand career in 2019. The industry has grown to $107 billion in total revenue, and there are over 600,000 projected jobs in the United States alone. If you want a slice of that profitable pie, starting your own plumbing business is the way to go.
Being a plumbing business owner gives you more freedom and the ability to shape your future versus working for someone else.
But, “nobody starts a business and thinks let’s just see how it goes,” says Paige Grover, who built an award-winning plumbing business from scratch in under 3 years.
If you want to really reap the rewards of being a business owner, you need a strategy, a purpose, and a clear path to success.
This guide to starting a plumbing business the right way includes extensive research and interviews with established plumbers, all compiled in one easy place. Bookmark your favourite sections and refer to them as you begin your journey.
Ready? Here’s what you need to know:
How much money do you need to start a plumbing business?
The costs required to start your plumbing business are moderate compared to other businesses. You can start with low overhead: one truck, one plumber, and a home office. That being said, you will need some capital to get started.
The first major expense will be a van or truck to get you from job to job. If you don’t already have one, you can get one used. You’ll also need plumbing tools (costing up to $5,000), a uniform ($300), business cards ($100), a business license, and plumbing business insurance, which can cost from $600-2,000 a year.
Assuming you have a vehicle and your plumbing license already, you should have access to at least $10,000 in capital to start your plumbing business.
It’s possible to start your plumbing business for less money, and we’ll show you how. The best way to save money is to set your business up right from the start to prevent early mistakes that will cost you dearly down the line.
How much does a plumber make per hour?
Here’s the good news: owning a plumbing business is a lucrative career. A plumbing contractor working in residential and commercial settings can expect to make $55,000 as an average annual salary, or roughly $30 an hour. Master plumbers and business owners can make $60,000-$90,000 or more, depending on demand, experience, specialty skills and equipment.
Is plumbing a good career?
Plumbing is a skilled trade and is always in demand, making it an exciting and rewarding career. Our homes, workplaces, cities, and entire civilization depend on clean water and sanitation. In addition to working with their hands and with a variety of tools, plumbers often use math, creativity, design, and problem-solving skills, especially as they take on larger and more complex jobs.
Thanks to advances in materials and technology, plumbing is an ever-changing industry that will keep you engaged if you’re willing to keep up.
Plumbers can earn a good living either as contractors or business owners. They generally have flexible hours. However, they often have to work evenings, weekends, and holidays to respond to emergency plumbing calls. Great people skills are crucial since you will be entering people’s homes and must make them feel comfortable.
A plumbing career is a great fit for someone who is personable, likes to work with their hands, enjoys learning new tools and technology, and takes pride in a job well-done.
- Henry Sanchez, Valor Plumbing
I love what I do. As long as you have a good attitude and are willing to talk to people and learn, you’ll go a long way.
Now that you know what to expect, follow these steps to start your own plumbing business:
How to Start a Plumbing Business
- Earn your state-required certification and plumbing license
- Create a business and pricing plan
- Invest in the right equipment
- Register and insure your plumbing business
- Set up your business administration and backend
- Build your online and offline presence to attract customers
- Stay up to date with plumbing education and technology
1. Earn your State-required Certification and Plumbing License
The very first step to starting a plumbing business is to earn your required certifications and licences. You cannot legally run a plumbing company without proper licensing, and it can take two to six years to become a licensed plumber.
Each state or region has specific requirements. To find yours, Google “plumbing license requirements + [your state/province name]” and only rely on information from trusted government resources.
If you’re just starting out, you’ll need to follow these steps to become a licensed plumber:
A. Get Certified: If you have a high school diploma or GED, you can register for a trade school or certification program at your local college. Courses are generally two years long and will focus on math, design of water and waste systems, building codes, piping methods, trade documentation, welding skills and safety techniques.
B. Be an Apprentice: A plumbing apprenticeship is paid on-the-job training under a master or licensed plumber. It helps you build your network, gain experience, and prepare for life on the job. Apprenticeships can last from two to five years and are a mandatory aspect of becoming a plumber.
C. Pass your license exam: After completing an apprenticeship, you can take your exam. Exam requirements and lengths will depend on your region, and some regions require you to periodically renew your license. After earning your license, you can begin to work as a journeyman plumber within a company, or on your own.
D. Become a Master Plumber (Optional): In some states, you must advance to Master Plumber to start your own business. Earning your Master Plumber License can take up to five more years of on-the-job training and certifications. If you choose to go this route don’t be discouraged! Becoming a Master Plumber can be highly rewarding, both personally and financially.
2. Create a Business and Pricing Plan
A business plan is a simple document that outlines your business objectives and strategies for achieving them. It’s an important document for guiding your business vision, holding yourself accountable, and securing funding or new team members down the road.
To create your business plan, get a blank document and answer these questions:
- What area will you serve? Do a quick analysis to ensure there is a need for plumbers, what types of plumbing are needed, and who your competitors are.
- Who will you serve? Quickly assess the demographics (age, lifestyle, average income, building type) of your area. You’ll likely uncover some good business insights.
- What is your unique selling point (USP)? What services will you offer, what will your specialty be, and how will you set your plumbing business apart from the competition? Use this information in your marketing and sales materials so customers know why they should choose you over anyone else.
- What is your pricing formula? An important question for plumbers is to determine whether they will charge a flat-rate or charge for time and materials (T&M). For a simple formula to get you started, check out our guide to pricing a plumbing job.
- What are your business goals? If you want your plumbing business to last, you need a goal. Do you want to hire a team and expand your operations to new regions? Do you want to specialize in a higher-grossing specialty, such as relining or new construction projects? Do you want to remain independent and have more freedom to take a vacation when you want? Think about these goals carefully, put them on paper, and hold yourself accountable.
- Paige Grover, Modern Plumbing and Heating
When we started the business, it wasn’t just about helping people, it was also about having a little bit of freedom down the road. To reap the benefits of being a business owner, you have to grow. That’s where Jobber came into play for us: it lets us work smarter, not harder.
3. Invest in the Right Equipment
There are a few essential plumbing tools you’ll need to get your operations off the ground. But don’t be intimidated or throw all of your capital into shiny new equipment. Start with the basics, buy used if you can, and only purchase equipment for specialty jobs if you have the license, skills, and customer demand.
In addition to your plumbing toolkit, here are a few additional items worth investing in:
- A professional uniform (order a few outfits to keep them clean)
- Business cards to start spreading the word
- A CRM, or client relationship manager, to begin properly documenting client information, parts and equipment, before and after photos, estimates, and payments due.
Pro tip: The earlier you invest in a CRM, the easier your business operations will be and the faster you’ll be able to grow. You’ll have a lot of data to track, and if you’re using pen and paper or spreadsheets, you’re more likely to let important information fall through the cracks, upset customers, and make costly errors that could seriously damage your business’ finances and reputation. Choose a program that’s purpose built for service businesses, such as Jobber’s field service CRM.
- Paige Grover, Modern Plumbing
Making sure we input all of the information accurately, with the least amount of back and forth, is vital to us. When you have software that lets you literally track everything on the job, you’re not going to miss a thing.
4. Register and Insure your Plumbing Business
Your plumbing business must comply with state and local laws. To protect yourself from financial and legal trouble, you’ll want to research the following:
- Required licenses and permits in your specific area
- How to establish an LLC (to protect your personal assets)
- How to file business taxes
- Plumbing insurance and bonds
Kiya has been running Valor Plumbing’s business in Los Angeles for over 5 years. Her top business advice? “Don’t try to start alone or figure things out by yourself. Ask for help. That could include hiring a professional accountant or business advisor.”
“So many people start a business and don’t understand what they need to be doing legally,” she adds. “It’s your responsibility as a business owner to find out from the start rather than waiting five years and being penalized because you weren’t doing it right. That’s where having a business advisor comes in handy if it’s too much to research on your own. ”
How much is insurance for a plumbing company?
Plumbers have a lot of liability on their hands, and in many states, you cannot start your business without proper insurance. The cost will depend on your business’ size and claims history, and can run from $600-$,2000 per month. The types of insurance most plumbing businesses need include:
- General Liability Insurance
- Commercial Automobile Insurance
- Inland Marine Insurance
- Workers compensation (in certain regions if you have a specific number employees)
Plumbing insurance will protect you, your workers, your business, and your clients in the event of accidents, injuries, damages, or property loss. Many customers will not work with plumbers who aren’t bonded and insured, so consider insurance an important way to secure sales, too.
Kiya, Valor Plumbing
Don’t try to start alone or figure things out by yourself. Ask for help. That could include hiring a professional accountant or business advisor.
5. Set up Your Business Administration and Backend
The backend of your business will determine your success. If it’s messy and inefficient, you’ll end up losing more money than you’re making. On the flip side, a smooth operation will impress customers and have you cash flow positive in no time.
First, you need a centralized place to take calls, store your client information, receive and schedule jobs, create and send invoices, and collect payment.
Traditionally, this would all be done from an office. But renting office space and hiring additional administration staff can be pricey. You can keep costs low by running your entire plumbing business online using plumbing management software, like Jobber.
In a nutshell, using field service software like Jobber lets you:
- Make appointment bookings easy
- Schedule jobs into your calendar
- Automate client emails and follow-up
- Create estimates and invoices
- Collect payments and track who owes you
- Manage your business from a desktop, tablet, or smartphone
- Make your small plumbing business look bigger and more professional, so you’ll attract and retain more clients.
- Kiya, Valor Plumbing
You can go out there and use QuickBooks but it’s not the same, this is very tailored to our industry. Jobber helps to reflect our level of professionalism. When somebody sees automated texts when you’re on the way, it looks like you’re running a serious operation, even if you’re running out of your home. We’ve had customers comment on that, especially the younger ones. The more professional you appear the more people will be inclined to want to use your service and want to refer you.
6. Build Your Online and Offline Presence to Attract Customers
With everything in place, it’s time to go to market and start getting your first customers. Since you’re in the early stages of your plumbing business, you don’t need to spend a lot of money on advertising or marketing agencies.
Both Modern Plumbers and Valor Plumbing confirm that reviews and referrals account for at least 90% of their customer base.
To get reviews and referrals, ensure that you’re providing the best possible customer service, following-up after jobs are completed, and building your network through a positive, professional attitude.
“Always be ready to build your network,” says Henry. “You never know who you are going to run into out and about. The person could own a couple properties and you’d never know it.” He started his business by printing business cards and taking them to apartment managers.
Eventually, he was able to form a relationship with a building manager. That one building led to several referrals that have formed the backbone of his business.
Even with referrals, you need a solid online presence so people can easily find you and get in touch. Check out these plumbing website examples for inspiration.
Want to take your marketing to the next level? Read our guide to plumbing for marketers to learn about online marketing and how to be found on Google.
- Paige Grover, Modern Plumbing and Heating
We started out just making sure we have our branding in place: an eye catching logo and tagline. Then it was making sure that people know how to get a hold of us and where to read our reviews. Those were the most important things to me.
7. Stay Up to Date with Plumbing Education and Technology
Your plumbing business is registered and insured, you’re handling work orders and invoicing like a pro, and the positive reviews are starting to pile in!
There’s just one final step to ensuring a lasting, profitable plumbing business: you need to stay up to date with plumbing industry trends.
“The plumbing industry is always changing. They are always coming out with new equipment, new materials,” says Henry. Learning about PEX, cameras, hydro jetting, and flex shaft is part of his day-to-day.
Try to choose jobs and specialties that actually excite you to keep your motivation high. Sign up for extra courses from distributors, read plumbing articles and resources, and stay connected to other plumbers and city officials to exchange stories, advice, and tips.
“It boils down to having a good attitude. If you talk to people, they’ll share their knowledge with you and vice versa.”
- Henry Sanchez, Valor Plumbing
The plumbing industry is always changing. They are always coming out with new equipment, new materials. If you talk to people, they’ll share their knowledge with you and vice versa.
Onwards and Upwards
With these solid foundations, your plumbing business will be set up to thrive.
Best of all, there are so many opportunities to continue growing: hiring more technicians, expanding to new regions, specializing in new processes, and partnering with construction companies or related trades businesses.
This is just the beginning of what we hope is your long journey as a plumbing business owner.
Do you have any additional tips or advice for starting a plumbing business? Let us know in the comments below!
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Photo courtesy of Valor Plumbing.