Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Published on May 20, 2021 Updated on November 30, 2023
$7,550 - $22,100
$80,000 - $370,000 p.a.
Time to build
1 - 3 months
$60,000 - $150,000 p.a.
The US plumbing industry is worth a massive $124 billion and growing steadily at 4% in 2021, which means there are opportunities out there for experienced or even novice plumbers looking to strike out on their own.
Of course, starting any business required dedication and hard work. Fortunately, you’ve come to the right place, as this step by step guide will help you move patiently through the development and launch process until you are running our own successful plumbing business!
Let’s begin your entrepreneurial journey.
Looking to register your business? A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple.
Your journey towards becoming a top plumbing business owner starts by grasping the ins and outs of the industry.
Pros and cons
When you’re in startup mode, it makes perfect sense to know the pros and cons of owning a plumbing service.
Low startup costs
High customer retention
Readily available market
Work can be repetitive, risky and gross
Training and certification required
Plumbing industry trends
The US plumbing industry shows no signs of slowing down, thanks mainly to increased residential construction. Also, higher per capita disposable income should enable consumers to upgrade existing systems, including Energy Star-certified and eco-friendly products.
How much does it cost to start a plumbing business?
The minimum cost of starting a plumbing service is around $1,500 if you’re running your business from home and up to $30,000 if you’re renting space and have a van.
These funds will go toward the following:
Setting up a business name and corporation
$150 - $200
Business licenses and permits
$100 - $300
Business cards and brochures
$200 - $300
$2,000 - $5,000
Tools and supplies
$3,000 - $5,000
$1,500 - $8,000
$100 - $300
$1,000 - $3,000
$7,550 - $22,100
How much can you earn from a plumbing business?
A master plumber running a one-person operation could charge $50 per hour. At 8 hours per day, six days a week, you’d make $124,000 in annual revenue and maybe $80,000 in profit, depending on your margin.
In your first year or two, you could work from home for 6 hours per day and five days a week, bringing in $80,000 in annual revenue. This would mean around $60,000 in profit, assuming an 80% margin. As you gain more clients, your billable hours could double to 12 per day and you could work six days a week for a higher fee of $100 per hour. At this stage, you’d rent a commercial space and hire staff, reducing your profit margin to around 40%. With annual revenue of $370,000, you’d make a tidy profit of almost $150,000.
A typical plumbing business pays its plumbers $20 to $40 per hour, according to the Bureau of Labor Statistics. This means hiring a professional plumber can cost your company about $50,000 to $75,000 per year, including insurance and other benefits.
While hiring plumbers reduces your profit margin significantly, it also enables your business to scale.
What barriers to entry are there?
The plumbing industry has few barriers to entry. But, as a new business owner, some of the challenges you’re likely to encounter include:
Plumber certification takes 8 months to 2 years
Competition from established plumbers
Related Business Ideas
If you’re still not sure whether this business idea is the right choice for you, here are some related business opportunities to help you on your path to entrepreneurial success.
Now that you know what you’re getting into and the possibilities, it’s time to trim down your business concept.
Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
Why? Identify an opportunity
Identifying your competition can help you determine what you need to do to stand out and attract the right customers. It will also enable you to develop a competitive pricing structure and respond to rival marketing campaigns.
Competitors in the plumbing industry include franchisees of a regional or national plumbing firm that often do repair work, local companies dealing with small to medium plumbing jobs, and large residential and commercial companies working on large projects.
You can pinpoint your competitors by checking with your local business directories, Chamber of Commerce Directory, or searching the internet for terms such as “plumbing companies near me.”
What? Determine your products or services
Plumbing includes the following tasks:
Installing pipes and plumbing fixtures
Clearing sink drains and toilet obstructions
Troubleshooting problems in equipment
Estimating installation and repair costs
Scheduling and dispatching employees
Plumbing work schedules are typically 9 am to 5 pm. However, the schedule may change depending on the task and a client’s availability.
How much should you charge for plumbing services?
Plumbers charge by the hour or by the job. Here’s a breakdown of the standard rates.
Per hour – $45 to $150
Flat rate – $75 to $250 for smaller jobs; $500 to $800 for bigger tasks
Per fixture – $100 to $600
Apprentice plumber – $14 per hour
Plumbing prices vary depending on materials needed for repairs or installation, location, and the plumber’s experience.
Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
Who? Identify your target market
The key to starting a flourishing plumbing business is knowing who your customers are and what motivates them to buy. Potential clients for a plumbing service include:
Real estate agents
Businesses such as food outlets and manufacturers.
Property and facility managers
Contractors such as electricians, roofers, and builders.
Getting a new plumbing business off the ground is all about forming quality relationships. Teaming up with a reputable contractor, for instance, can generate quality plumbing leads and referrals. Getting to know the best contractors in your area makes good business sense.
Where? Choose your business premises
In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out an office. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.
When choosing a commercial space, you may want to follow these rules of thumb:
Central location accessible via public transport
Ventilated and spacious, with good natural light
Flexible lease that can be extended as your business grows
Ready-to-use space with no major renovations or repairs needed
Step 3: Brainstorm a Plumbing Company Name
Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.
Here are some ideas for brainstorming your business name:
Short, unique, and catchy names tend to stand out
Names that are easy to say and spell tend to do better
The name should be relevant to your product or service offerings
Ask around — family, friends, colleagues, social media — for suggestions
Including keywords, such as “plumbing” or “plumbers”, boosts SEO
Choose a name that allows for expansion: “NextGen Plumbing Services” over “Commercial Plumbing Services”
Avoid location-based names that might hinder future expansion
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that set your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Step 4: Create a Plumbing Business Plan
Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:
Executive Summary: A concise overview of the plumbing business, highlighting key aspects and objectives.
Business Overview: Detailed information about the plumbing business, including its mission, vision, and goals.
Product and Services: Outline of the plumbing services offered, such as installation, repair, and maintenance of plumbing systems.
Market Analysis: Examination of the local plumbing market, including target demographics, trends, and potential growth.
Competitive Analysis: Assessment of competitors in the plumbing industry, identifying strengths and weaknesses.
Sales and Marketing: Strategies for promoting the plumbing business, acquiring customers, and increasing market share.
Management Team: Introduction of key individuals involved in the business, their roles, and relevant expertise.
Operations Plan: Details on day-to-day activities, workflow, and processes involved in running the plumbing business.
Financial Plan: Projection of the financial aspects, including startup costs, revenue forecasts, and profitability.
Appendix: Supplementary information, such as detailed financials, supporting documents, and additional resources for reference.
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Step 5: Register Your Business
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Choose where to register your company
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to plumbing services.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Choose your business structure
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your plumbing company will shape your taxes, personal liability, and business registration, so choose wisely.
Here are the main options:
Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
Limited Liability Company (LLC)– Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just needs to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.
Step 7: Fund your Business
Securing financing is your next step and there are plenty of ways to raise capital:
Bank loans: This is the most common method, but getting approved requires a rock-solid business plan and strong credit history.
SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
Venture capital: Offer potential investors an ownership stake in exchange for funds, keeping in mind that you would be sacrificing some control over your business.
Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
Personal: Self-fund your business via your savings or the sale of property or other assets.
Bank and SBA loans are probably the best options, other than friends and family, for funding a plumbing business.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your plumbing business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Step 10: Get Business Insurance
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
Business Property: Provides coverage for your equipment and supplies.
Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
Worker’s compensation: Provides compensation to employees injured on the job.
Property: Covers your physical space, whether it is a cart, storefront, or office.
Commercial auto: Protection for your company-owned vehicle.
Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of any of the above insurance types.
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Essential software and tools
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
Plumbing software such as Housecall Pro, AroFLo, and Marketing 360 can help with bookkeeping and invoices, managing cash flow, tracking projects and hours worked, and even managing social media campaigns and SEO optimization.
If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.
Develop your website
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.
You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
Starting a plumbing business can be a lucrative venture, but success hinges on effective marketing strategies beyond just having a website and networking. Here are practical tips to boost your plumbing business:
Local SEO Optimization: Ensure your business appears in local search results by optimizing your online presence with location-specific keywords, Google My Business, and customer reviews.
Customer Referral Program: Encourage satisfied customers to refer your services by implementing a referral program, offering discounts or perks for every new customer they bring in.
Social Media Engagement: Leverage social media platforms to showcase your expertise, share customer testimonials, and engage with your community, building trust and visibility.
Strategic Partnerships: Establish partnerships with local hardware stores, real estate agents, or home improvement businesses to gain referrals and mutual promotion.
Community Sponsorship and Events: Sponsor local events or sports teams to increase brand visibility, and participate in community activities to build a positive reputation.
Emergency Response Campaigns: Highlight your 24/7 emergency services through targeted campaigns during seasons prone to plumbing issues, positioning your business as a reliable solution.
Online Advertising: Invest in targeted online advertising on platforms like Google Ads or social media to reach potential customers actively searching for plumbing services.
Professional Branding: Develop a professional and memorable brand identity, including a recognizable logo and consistent branding across all communication channels.
Educational Content Marketing: Create and share informative content through blog posts, videos, or infographics to establish your expertise and provide value to your audience.
Customer Loyalty Programs: Implement loyalty programs offering discounts or exclusive services to repeat customers, fostering long-term relationships and encouraging customer retention.
Focus on USPs
Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your services meet their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your plumbing business could be:
Success guaranteed or your next job’s free!
Fastest, most reliable plumbers around
The most advanced and efficient tools and methods
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a plumbing business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been a plumber for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in plumbing. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business.
Step 12: Build Your Team
If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a plumbing business would include:
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
Step 13: Run a Plumbing Business – Start Making Money!
To run a successful plumbing business, be ready to work during weekends and past regular working hours. A leaking pipe is an urgent matter that needs to be addressed immediately to prevent damage to a home and the growth of mold. So if a client calls you to fix a leaking pipe late at night, you’d have to go to work. Of course, that would mean a higher rate.
Besides providing excellent work, it’s also important that you think like a businessman and keep track of your costs. You’re now ready to launch your plumbing business! Good luck!
Plumbing Business FAQs
How do I start a small plumbing business?
Start by getting certified. Look for an established plumber and serve as an apprentice to gain industry knowledge. Next, decide whether you want to work as a commercial or residential plumber. After that, follow the above steps on how to start a plumbing business, and you’re good to go.
Is the plumbing business profitable?
Yes, it is. For starters, plumbing is a $110 billion industry which means that there’s enough money to be made. However, turning your plumbing startup into a success story depends on your marketing prowess and ability to deliver excellent results consistently.
Can I start a plumbing business with no money?
The truth is, it is hard to launch a plumbing company with no budget. At the very least, you’ll need to have a certification, essential equipment, and relevant licenses to start. Still, you can cut down costs by starting your business at home with a lean marketing budget and scale as your business grows.
What components is a plumber most likely to install?
A plumber installs pipes, fixtures, valves, pumps, water treatment systems, water meters, and drainage systems as part of their work.
What is the most common plumbing problem?
The most common plumbing problems are clogged drains, leaking pipes, dripping faucets, running toilets, water heater issues, and low water pressure.
How to Start a Plumbing Business
Decide if the Business Is Right for You
Hone Your Idea
Brainstorm a Plumbing Company Name
Create a Plumbing Business Plan
Register Your Business
Register for Taxes
Fund your Business
Apply for Plumbing Business Licenses and Permits
Open a Business Bank Account
Get Business Insurance
Prepare to Launch
Build Your Team
Run a Plumbing Business - Start Making Money!
Plumbing Business FAQs
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