How to Start Up a Plumbing Business

Zaid's picture
Zaid Rahman
June 6, 2022

Are you wondering how to start a small plumbing business but you just can’t seem to find a reliable source to help you get started?

Finding the information you need can be hard, but it is far from impossible. We have compiled a guide to help you learn how to start a plumbing business in nine simple steps.

Read on to find five vital questions every entrepreneur needs to answer and helpful steps to help you start your plumbing business.

Table of Contents

Before You Start a Plumbing Business, Ask Yourself These 5 Questions

Starting a business is no simple task. Before you dive in and launch your new plumbing startup, there are five important questions you need to ask yourself.

#1: Do you Have the Time to Run a Business?

Running a business takes time and a lot of it.

Starting a business takes even more time.

Startup entrepreneurs can expect to work 16-hour days crammed into exhausting 80-90 hour work weeks for at least the first two years of business.

It takes startups an average of two years to break even and three years to turn a solid profit. Are you okay with working hard on something that might not look successful for two to three years?

If you have the guts to keep pressing on even when it seems like your business is failing, you just might have what it takes to start a successful business.

#2: What Are You Willing to Sacrifice to Make Your Dream a Reality?

Anything worth having requires sacrifice and a business is no different. As you develop your plumbing service business plan, you need to think through what you are and are not willing to give up.

You should count on making some financial sacrifices:

  • You may have to decide between the new computer your business needs and the new car you have been eyeing for the past three years.
  • You might find that you can only fit one vacation into your budget and your summer beach trip has to go.
  • Your weekly night out might get canceled in favor of you holding onto your gym membership.

In addition to financial sacrifices, you will find that you have to prioritize what gets your time. You might have to:

  • Give up your weekly golf run with friends so you can keep your weekly date with your partner
  • Leave your favorite TV show unwatched so  you can hold onto your evening wind-down time
  • Place your Saturday morning donut runs on hold so you can spend the morning with your kids instead

While you are deciding what you will give up, you should also think about your non-negotiables – the things you will not give up no matter what. Set them ahead of time and commit to taking drastic measures to save them if your business begins to take a turn.

Some examples might include:

  • Your mental health
  • A relationship
  • Time spent with your kids
  • A healthy amount of sleep; or
  • Your spiritual health and practices

You may find it helpful to take some time to write down your non-negotiables and talk them through with anyone they might affect, such as a partner or friend. Have them hold you accountable for keeping the right things in the right places.

#3: What Goals Would You Like to Reach With Your Business?

You need to set specific and measurable goals. What is success for you? What are the things that your plumbing business needs to accomplish to be successful?

Having vague milestones will likely not help you reach your goals and might even leave you feeling defeated and burned out.

Instead, set clear goals you can achieve, like:

  • “I want my business to make enough for me to take home a $98,000 annual salary.”
  • “I want to have six weeks of vacation time each year.”
  • “I want my business to be known as the highest-quality plumber in town.”
  • “I want to market my business so well that it clears 500 clients per month.”

Set some goals before you open your doors and don’t let comparison steal the joy in your business.

#4: What Are Potential Roadblocks You May Anticipate With Owning Your Business?

Roadblocks and “failures”. You can’t know them all ahead of time and you cannot plan for them all either, but you can think through some potential issues that might arise.

Your roadblocks might look more like a problem with a quick fix that barely takes an ounce of energy. But they could also look more like a big failure that threatens the security of your business.

But the thing about failure is it’s simply a part of entrepreneurship. As a business professor told a classroom full of eager entrepreneurs, “fail forward — fail often and fail early.”

Failure is an excellent and necessary teacher; however, some roadblocks should alert you that something is majorly wrong and it’s time to pull the proverbial plug.

Before you launch your plumbing business, do some research and write down realistic triggers that will help you realize when you need to consider closing the doors and moving on.

These triggers will vary from entrepreneur to entrepreneur but here are some examples:

  • Running your business is taking a serious and detrimental toll on one or more important relationships.
  • Your personal savings account has dipped lower than your predetermined comfort number.
  • You’ve invested all of your inheritance money and the business has yet to turn a profit.
  • You launched over three years ago and your take-home has yet to meet your previous salary.
  • Your startup is taking too much of a toll on your mental health and your therapist, family, or friends are concerned about you.
  • You’ve put a solid year or more into your plumbing startup and realized that you were genuinely happier working your full-time “day job.”

Make your list before you start your business and have a plan in place for when/if you find yourself hitting your triggers.

Will you talk to your business partner? Will you discuss it with a trusted friend or your partner? Setting the plan now, before you have emotional ties to your plumbing business, will help you in the long run.

When it comes to deciding when to move on, many entrepreneurs fall prey to the “I’ve already invested so much money and I will lose it all if I don’t keep investing and working” mindset.

This is also known as a sunk cost fallacy. Sunk cost says that since you have already invested…

  • Time,
  • Effort; and
  • Money

… into a business, you should keep investing, even though it is clear the business is failing and will not recover.

Don’t fall prey to sunk costs. It is better to pull out and recover faster than continue throwing money and effort into a failing enterprise.

#5: Is Owning a Plumbing Business Your Passion?

If you want to create a successful business, you need to have the passion to carry it out. Without passion for what you are doing, pushing past hard days and sleepless nights won’t come easy and you may find yourself burned out and done very quickly.

Passion matters when it comes to creating a business. If you’ve ever heard the old saying “love what you do and you’ll never work another day in your life” and rolled your eyes, you are not alone. The idea of floating through your business on a cloud of passion is far from realistic.

But there is some truth in the saying. If you love what you do, you will likely work much more, but it will be work you enjoy and tied to something you are passionate about.

Remember the advice you got when writing term papers in college to write about something that makes you angry or excited? It’s the same principle. Build a business around something that makes you excited and aligns with your passion.

If plumbing is something you are passionate about, starting your own plumbing service just might be for you.

How to Start a Plumbing Business in 9 Steps

If you believe that you have what it takes to start a business, you’re going to need to know how to start.

Here are the nine basic steps you should consider following to get your plumbing business off the paper and into the marketplace.

Step 1: Decide What Services You Will Offer

While you might want to do everything right out of the gate, you need to decide on a few specific services that your business will offer. It is better to do a few things and do them well than to do everything and do it all mediocrely.

What services will your plumbing service offer? Do you want to be a 24/7 service, available whenever plumbing emergencies arise? Maybe you want to specialize in indoor plumbing?

Think through your options and decide on your services.

Analyze the Market

If you are starting your business in an area with an already saturated plumbing market, you may find it hard to rise on the list of competitors.

Be sure to do your research and find out what services are still needed in your area.

If there are eight indoor plumbers in the city but only one outdoor plumber, specializing in outdoor plumbing might be a good idea. Similarly, if three-fourths of the plumbing companies focus on plumbing repairs, you might find success with a focus on initial installation.

Step 2: Decide What Will Set You Apart From Your Competition

If you plan to succeed, you are going to need something that sets you apart from the pack.

This is where you answer the unspoken customer question, “Why should I choose you?”

Are your prices cheaper? Maybe you focus on creating a personal customer experience?

The demand for plumbers is high and expected to increase so you can count on new competition constantly entering the market. You need to have something that makes you special, something that brings you new customers and keeps old ones coming back.  

Step 3: Choose a Name for Your Plumbing Business

Your business’s name is the first thing people notice about it. You want your name to be catchy enough to draw a crowd and professional enough to keep that crowd.

There are several things that you should consider when naming your business. For instance:

  • Keep it open — You don’t want a name that limits the rest of your business so avoid including city names or specific services.
  • Pick an easy name — Don’t name your company something hard to spell, too common, or really cheesy (you want your employees to feel some pride when they say what company they work for!).
  • Search the internet and set up your website and social accounts early — Look up your potential name to make sure it isn’t already taken by other companies. It is unlikely you will create a totally different name but you shouldn’t pick one that is used by a lot of companies. Once you decide on a name, purchase a .com domain and set your social media accounts quickly to ensure you get the ones you want.
  • Run a trademark search using the United States Patent and Trademark Office website.
  • Ask for honest feedback — Present your friends and family with a list of potential names and see which ones go over best.

If you plan on opening your business in an area where multiple languages are represented, you might want to make sure your name doesn’t mean anything false or inappropriate in those languages.

Step 4: Take Care of the Necessary Paperwork

As with anything these days, you are going to need to deal with a good bit of red tape to get your company up and running. You should always consult your state’s regulations to make sure you take care of everything, but here are a few typical things you will need.

Ensure You Have the Proper Certifications

You, as a plumber, need to have the right certifications to start the business.

Some states may require you to have a Master Plumber License before you can start. Others might want you to have other types of degrees or certificates.

Always check with your state’s requirements to find out what you need.

Apply For a Business License

When you license your business, you will need to work at the federal, state, and local levels. State and local license policies vary from location to location so you should do some research to find out what requirements apply specifically to your situation.

In most cases, your process will look something like this:

  1. Determine the type of license you need.
  2. Collect all needed documents for your application.
  1. A business description with location and planned activities
  2. Proof of your local or state tax status
  3. Copies of corporate info such as bylaws
  4. The filing fee
  5. A list of owners and managers
  6. Proof of insurance
  7. Records of your personal licensing and education
  8. Other documents, depending on the license you are applying for
  1. Apply for the license.
  2. Maintain the license by staying on top of renewals and policies.

The Small Business Association can help you determine the specifics of what you will need.

Register Your Business

In most  — but not all — cases, you need to register your business, at least at the state and local levels.

To do so, you will need to:

  1. Decide on your business structure (LLC., Corporation, Nonprofit, etc.)
  2. Register the name with your local government
  3. Register with the IRS and get a Tax ID number
  4. Register your business with the state tax or revenue service
  5. Apply for your licensure and permits (see above)

Apply for an Employer Identification Number

In most cases, you will need to apply for an Employer Identification Number from the IRS.

The IRS website offers resources to help you apply for your EIN.

Step 5: Get Your Business Insured

Insurance is vital for many things in life and starting a business is no different. Insurance transfers some of the risks of starting a business off of you and onto your insurance company.

You will want to insure assets like your business vehicles and tools. You should also consider:

  • General liability insurance
  • Workers’ compensation insurance; and
  • Income protection insurance

Do your research and speak with an insurance representative to figure out what type of coverage your business needs.

Step 6: Create a Business Plan

Before you can launch your business, you need to know where it is going. That’s why creating a plumbing business plan is vital.

At a minimum, your plan should include:

  • Key partnerships — Who you are working with to make things happen.
  • Key activities — What you will do to get the business started.
  • Key resources — What you will leverage to create value for your customer.
  • Value proposition — A concise and compelling statement that offers the who and what of your business.
  • Customer segments, relationships, and channels — Who your target customer is and how you will relate to them, as well as how you plan to communicate with them.
  • Cost structure — Is your plan to reduce cost or maximize value? Define your strategy and give a few ways you plan to achieve it.
  • Revenue streams — Where is your income coming from? Is it based on the services you provide, products you sell, or subscribers you gain?

Step 7: Create a Financial Plan

Next, you need a solid financial plan. As you are just starting up, it will look different than it will in the coming years.

For now, you need to have a plan that outlines:

  • Where your company’s finances are currently
  • Where you want them to be; and
  • How you plan to reach your goal

You should keep track of any loans or other assets you have invested into your business here.

As your business grows, you will need to include things like:

  • Profit and loss statements
  • Balance sheets; and
  • A statement of cash flow

How Much Does It Cost to Start a Plumbing Business?

When it comes to finances, you might be wondering, “how much money does it cost to start a plumbing business?”

If you have your license already, your startup costs will greatly decrease.

Thankfully, compared to other businesses, starting a plumbing business can be done fairly economically.

Your startup costs will vary greatly based on where you live and what you specialize in but many plumbers can start their own business with around $10,000, once they factor in:

  • Tools
  • Materials
  • Uniforms; and
  • Some basic marketing

If you don’t already have a vehicle to use for your business, your financial needs will be much higher at the start.

Step 8: Hire a Team

Once you have a company up and running, it is time to build your ideal team. Before you put out the call for interviewees, think through the culture you want your company to have. Think about what type of people will help that culture thrive and build a profile of your ideal candidate.

Spend some time thinking about how large you want your company and how many employees you will need to reach your goals. Once you have that figured out, start interviewing potential employees.

Deciding who to hire and who to pass over can be a tough decision. You will get better as time goes by but, as a rule, if someone feels off to you, stick with your gut and keep looking. You are bound to find someone who is passionate about your business and who will make a great addition to the team.

Step 9: Begin Marketing Your Business

Marketing your new plumbing business is important. After all, if no one knows you exist, how will they do business with you?

Invest in business cards, a website, and some solid social media campaigns.

Another great way to make sure your new company is reaching the masses is through a strong SEO campaign. SEO for plumbing companies is important and it can dramatically affect the size of your customer base.

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