How to Start a Plumbing Business

Updated on March 3, 2020


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Statistics are showing that while the need for corporate workers is decreasing, licensed trade skill workers and companies are in high demand. This is what makes plumbing such a lucrative business – regardless of how much everything changes, plumbing will remain a necessity, one that people will be willing to pay higher prices for if it means safeguarding their assets.

Nonetheless, starting your own plumbing business and letting it thrive is no easy task – with so many contractors and companies out there, proper business growth is the only way you can move forward. We’ll help you understand what you need to start and grow your very own plumbing business.  

What To Know Before Starting A Plumbing Business

Just like any other venture, starting a plumbing business can be intimidating and exciting at the same time. But if you’re willing to become your own boss and take up the challenge, you need to steadily plan your business journey and create a roadmap of its growth.

Study The Market

You need to do your homework by learning about the industry. If you’re a licensed plumber who chose the trade skill field, you understand the high demand for plumbing services. But at the same time, you should also understand that proper research is essential before starting your own business.

To begin with, you need to figure out whether you want to start a business from scratch or purchase a franchise for an existing business. Both approaches have their advantages. For instance, if you buy into a current business with a franchise, it will come with a reputation, brand, and equipment.

On the other hand, starting your own business means heading off with a lower budget because you don’t have to pay a franchise fee, which is often very high. Sure, you won’t get instant access to a wide range of equipment, but licensed plumbers already have most of the equipment they need, anyway.  If you ever need special equipment for a bigger project, you can rent the equipment instead, which saves costs on maintenance and inventory.

Develop A Business Plan

No business can grow without adequate financing, and if you’re going to get it you need to formulate a stellar business plan. We don’t mean just a practical example of what your plumbing company will be, but rather an effective plan in writing.

In most cases, business starters have to put together a variety of different components that makes up a plan. This includes an executive summary, which delivers a brief instruction of your business plan and what your goals will be. Moreover, give a company description so that lenders can understand how your business is different from the others in the market.

Your plan should also have a thorough market analysis that includes data about current competition and general business environment. List out the types and specific services you can offer and how your target customers can benefit from them. Make sure to discuss your financial projections as well.

Not to mention, you also need to prove that you’re knowledgeable of local plumbing codes and requirements for setting up a business. For instance, you’ll need to obtain a general business license. Most importantly, as a plumbing business, you need to buy liability coverage.

This will cover the costs of any work-related injuries you or your employees will suffer from, down the line. Customers feel more satisfied with the decision of hiring insured plumbers with adequate coverage.

Marketing Your Business

Since you’re bound to ask how you can start a plumbing business with close to little money, you should know that the ‘business location’ is one area where you can save money. If you’re looking to keep your budget low at the start, one way to do so is to consider setting up a home office. This will prevent excessive costs because all you need to set it up is a filing cabinet, desk, and telephone.

Setting Up A Good Location

In the long run, businesses rarely stay afloat with an adequate marketing strategy. Start by purchasing online ads that suit your budget. Creating a website and business listing on Google will have a positive impact on attracting customers. If you take help from marketing experts, they can enhance your website and listing so it gets more attention on search engines. 

Can I Start A Plumbing Business With No Money?

If you came here looking for advice on how you can start your plumbing business with no money, you’re at the wrong place. Although trade skill services businesses can start out with very minimal investments, you can’t start a business with no money at all. After all, you need to start somewhere.

Paying For Insurance And Licensing

For starters, you need adequate insurance and licensing because it’s not a good strategy to run your trade business without proper insurance and licensing. Not only does it dissuade potential customers from hiring you, but it can also get your company in trouble with regulatory authorities.

In most states, you need a trade license to practice your skill. These requirements can vary from one state to the other, and in some cases, even between cities, due to vast differences in plumbing codes and regulations.

Build Your Tool Inventory

Before you can start practicing, you need to get an inventory of your tools. If you’re starting a business with a limited budget, you shouldn’t purchase any extra tools – wait until you’ve earned some more money.

Knowing what tools you currently have will determine the type of work you can do now to start earning money. In the meantime, it’s best to make do with what you have by taking on low-risk and uncomplicated tasks. This will start a cash flow that you can use for new purchases.

Outline Your Business Plan

We mentioned how you need to create a proper business plan before moving forward. Even if you intend to do so without financing and investors, you still need one. Here are some of the points you need to highlight in your business plan.

  • Define your plumbing business in a sentence
  • What customer problem are you looking to solve?
  • What services can you provide to address the problem?
  • Describe the target customers you aim to provide services to
  • How is your target customer currently dealing with the issue (mention competitors)
  • What’s your plan to fix customer appointments and collect payments?
  • How do you plan on reaching out to customers?
  • What will your payment plan be? (flat rate, hourly, etc)
  • Define your biggest expenses when starting up and maintaining a business
  • Who will help you run the business?

Sure, you can give brief answers to the above questions, but it will help if you provide detailed responses. Putting everything on paper from the start will be beneficial for making decisions in the long run. When you have a document to refer back to, you’ll know what aspects to focus your attention towards. 

Give Your Business A Name

You should give your business a name based on your target customers. But regardless of your customers, make sure that it’s a descriptive name. Take a look at your business plan again – your answers to certain questions can impact what you want to name the business.

One way to go about it is to consider your target customers. If they are residential, having a catchy and easy to remember name will help. On the other hand, if your customers are commercial, using keywords in the company can help.

Check Your Chosen Name Against the State Registry

Usually, businesses are registered at the state level. In this case, what matters is your company’s DBA (Doing Business As). For example, your business can have the legal name like “John’s Plumbing LLC” but the DBA can be “Speedy Plumbing Services.” In simple terms, the DBA is important so you need to make sure that no business has already claimed the business you’ve selected.

How Much Money To Start A Plumbing Business

We mentioned how you can’t really start a plumbing business without any money, but how much money does one need? Let’s take out the costs of going to a trade school and completing an apprenticeship and start at licensing.

  1. On average, trade service licensing will cost between $75 and $300. Yes, that’s a pretty broad range but it entirely depends on what state you’re from.
  2. Secondly, you’ll need to get tools, but we suggest that you start off what whatever tools you have. Until then, make sure to conduct a thorough inventory. This will take around 3 hours.
  3. Third, you have the cost of writing down your business plan and blueprint. This is free because you don’t spend money, but it will take around 3 hours or so to compile.
  4. Next up, you have to find a name, confirm whether it’s available, make relevant social media accounts, and create a website. This will cost you around 4 hours and $15 dollars for the domain name.
  5. Then, you need to legally register your business, which, on average, costs $100-$300
  6. You have to get an EIN by applying for it with the IRS – the process is easy, and surprisingly, free.
  7. You have to get a general business license for practicing in the area. Which will cost an average of $150
  8. After that, you need to get insurance, essential for any trade service business.
  • Commercial automobile insurance
  • General liability insurance
  • Inland marine insurance covers your equipment and tools when you’re on the site
  • Umbrella insurance covers the gaps in other types of insurance
  1. You need to organize a few things for operational start-up, and this will cost anywhere between $10 and $150 based on your choices
  2. Every business starts with the first customer. This is a crucial step that won’t cost you any money but may take up to 100 hours.

Plumbing Business Ideas

You need to come up with powerful business marketing ideas if you intend to keep your plumbing business afloat. But just like with other business, you rarely begin to notice the lack of a marketing strategy until you’re low on cash flow. Hence, we suggest that you start thinking about approaches for a marketing campaign while you still don’t need it.

Check Your Chosen Name Against the State Registry

When you want to start business operations but don’t have customers yet, getting involved with the local community is a great way to let everyone know about your services.

Go to local schools to show support for your neighborhood or community. You can even go to local citizen groups and associations to help out. If you want to engage with other trade skill workers and businesses in the area, arrange for a meetup.

Get Reviews

Usually, satisfied customers rarely go out of their way to review your services online. Only the customers who have received extremely bad or extremely good service make it a point to leave a review on your business. It’s your job to convince regular customers to leave a review. In the long run, it establishes your credibility over that of competitors.

Social Media

If you’re trying to target residential areas, using social media can help you generate a return on investment. Since most of your customers will already be on social media, it’ll give them an easy platform to leave a review as compared to your website,

Use Local SEO Strategies

Implementing local SEO strategies is crucial if you want to develop a reputation in your surrounding area. Most customers perform a Google search when looking for trade skill services, such as plumbing.

Whenever they do, it’s common consumer nature to contact the first few results, because their position is based on review numbers and various other local SEO strategies. Naturally, customers consider them as their first choice. You need to make sure that your site implements them to grasp different sales opportunities.

Add Your Business To Directories

Some careful customers understand that not all business listings resulting from a Google search are licensed and legitimate. To avoid the hassle of verifying that they’re licensed, they go straight to directories that only list insured and licensed plumbing companies. Hence, it’s important that you grow your business by listing it in directories like the PHCEid

This is just the tip of the iceberg, I’m afraid. Growing your plumbing business isn’t a one-time deal, it needs to be done consistently and with adequate effort.

Promote the fact that you are licensed