How to Start a Plumbing Business

Part 1 - How to start a Plumbing business - Background

The plumbing business is a necessary business because consumers and businesses generally are incapable of maintaining their own plumbing systems. Plumbers ensure that potable and sewer water pipes are well-maintained and up to local building codes. Customers are usually living in residential properties. However, some plumbers obtain corporate or commercial contracts and work exclusively with businesses.

Our guide is in 3 parts:

• Part 1 - How to start a Plumbing Company business - Background
• Part 2 - Our planner tool to see if this idea is the right fit for you
• Part 3 - Action plan to get started

What are the costs involved in opening a plumbing business?

The costs involved in starting a plumbing business are minimal. A used van or service truck is usually necessary. These vans can cost several thousand dollars for a used vehicle, up to $30,000 or more for a new vehicle.

A certificate can cost between $1,500 – $8,500 and take up to 12 months to get.

Equipment like assorted pipes and fittings, a large bucket to store fittings, pipe wrenches, reciprocating saw, circular saw, whole hog right angle drill, cordless screw gun, propane torch, cast iron pipe cutter, extension cords, pipe dope or teflon tape, a laptop computer, office equipment, and mobile phone are also needed. The total cost for all this equipment can exceed $5,000.

Used equipment can cost less but may require extensive refurbishing and maintenance before it can be used.

What are the ongoing expenses for a plumbing business?

Ongoing expenses in this business are minimal. Maintenance on vehicles, maintenance/replacement of materials/tools, insurance, and office expenses (rent, utilities, etc) are all that are required.

Who is the target market?

Clients are usually either commercial or residential customers. Plumbers usually get business either through referrals or targeted marketing, like direct mail. The easiest way for plumbers to get business is to buy a mailing list of individuals who have previously done business with plumbers or used plumbing services within the past 6 months to a year. Then, mail those people with an offer for promotional services.

How does a plumbing business make money?

Plumbing companies charge a flat rate (sometimes plus materials) for jobs. However, they may also charge per hour or premium surcharges for emergency, rush, or off-hours service.

How much can you charge customers?

Jobs can be priced per hour or as a flat rate. However, the average price for plumbing services tends to be between $160 and $430 for a typical job. This works out to an average per-hour rate of between $45 and $150. Customers are usually also charged a flat service fee regardless of the number of hours worked on the job. This is in addition to the hourly or per-job flat rate.

How much profit can a plumbing business make?

A master plumber running a one-person company making $45 per hour, working 8 hours per day can make up to $100,000 per year. If ongoing costs are between $10,000 and $20,000 per year, this leaves $80,000 as net profit. A typical plumbing company pays its plumbers between $20 and $40 per hour, according to the Bureau of Labor Statistics. This means each plumber costs the company roughly $50,000 to $75,000 per year in labor costs (including insurance and benefits). While this substantially reduces profits, it allows a company to scale.

Assuming the same $100,000 per year per plumber gross profit, a plumbing company could clear $25,000 to $50,000 per plumber, per year.

How can you make your business more profitable?

Making a plumbing company more profitable means scaling the business and possibly going into business with other tradesmen to offer comprehensive services. For example, a plumber might team up with an electrician to offer multiple services.

Profits can also be increased by contracting with construction companies. Remodels and renovations can become a major source of revenue for a plumbing company.

Day-to-Day and Growth

What happens during a typical day at a plumbing business?

Day-to-day activities of a plumbing company include checking customer logs, fixing and maintaining plumbing lines, and billing customers for services rendered. Some companies also spend considerable time designing and building new plumbing systems if they work on new construction projects.

Plumbers also spend considerable time assembling pipe sections, tubing and fittings, using clamps, screws, bolts, cement, plastic solvents and caulking, solder and soldering guns, couplings, and welding equipment.

Plumbers also have to routinely do complex calculations on job sites which determine the safety and longevity of the plumbing they design, install, and maintain.

What are some skills and experiences that will help you build a successful plumbing business?

Plumbing requires certification in order to practice on the professional level. However, many plumbers start out as an apprentice working under an established plumber. It helps you learn the necessary skills involved in plumbing. This is what most plumbers do before starting their own business. Plumbing businesses are more accessible startup options, as the amount of capital needed is moderate. Expenses will typically include transportation (like a truck large enough to carry equipment), drain snakes, and other basic plumbing equipment.

What is the growth potential for a plumbing business?

A plumbing business can typically be started with one plumber. As demand begins to exceed the plumber’s ability, additional plumbers can be hired as employees or as independent contractors. Most plumbers maintain a local clientele, though some have managed to expand operations beyond their region.

What are some insider tips for jump starting a plumbing business?

Getting started in the plumbing business isn’t technically difficult, but entry is basically barred unless you get certified and/or work as an apprentice first. Because it is an established trade, with a union, there is an order and process involved before you can start a business.

Therefore, the best way to get into the plumbing business is to start as an apprentice so you can “learn the ropes.”

How and when to build a team

Most plumbing companies benefit from having at least a few employees when starting out. This enables them to quickly recover marketing costs and startup expenses. A team of 5 plumbers, for example, can be deployed to 5 different locations.

However, it usually makes sense to add more plumbers as soon as you can afford to do so, provided that you have a steady inflow of jobs in your local area.

Part 2 - Is a Plumbing business the right fit for you?

Part 3 - Action plan to launch your Plumbing business in 90 days