How to Start a Septic Tank Business

In many rural areas, and some not so rural, homeowners don’t have access to a municipal sewer system, so they need a septic system for waste removal. In fact, according to the EPA, more than 60 million people in the United States have a septic system. 

As people have moved away from cities, the US septic cleaning industry has grown tremendously, expanding 60% in the last decade. That growth is expected to continue in the years ahead, so if you have relevant experience, you could start your own septic tank business and boost health and safety standards while making a good living. 

But before you roll up your sleeves, you’ll need to understand what’s involved in starting the business. Luckily, everything you need to know is packed into this handy step-by-step guide, and after reading it, you’ll be ready to launch your successful septic tank business.

Step 1: Decide if the Business Is Right for You

Pros and cons

Starting a septic tank business has pros and cons to consider before deciding if it’s right for you.

Septic tank industry trends

Industry size and growth

• Industry size and past growth – The US septic cleaning services industry is worth $5 billion in 2022 after expanding 60% in the last decade.((https://www.ibisworld.com/industry-statistics/market-size/septic-drain-sewer-cleaning-services-united-states/))
• Growth forecast – The US septic cleaning industry is projected to grow by 3.8% in 2022.
• Number of businesses – In 2022, 6,622 septic cleaning businesses are operating in the US.((https://www.ibisworld.com/industry-statistics/number-of-businesses/septic-drain-sewer-cleaning-services-united-states/)) 
• Number of people employed – In 2022, the US septic cleaning industry employs 30,986 people.((https://www.ibisworld.com/industry-statistics/employment/septic-drain-sewer-cleaning-services-united-states/)) 

Trends and challenges

Trends in the septic tank industry include:

• Americans are increasingly moving to rural areas, boosting demand for septic tank services.
• New septic tank technology makes systems more eco-friendly, preventing pollution and maintaining ground water levels.

Challenges in the septic tank industry include:

• Faulty and abandoned septic systems cause waterway pollution, so septic tank businesses have to make sure they install their systems up to strict EPA standards.
• Tree roots commonly damage septic systems, so septic businesses must use care in locating the systems away from trees.

What kind of people work in septic tank businesses?

• Gender –  2.1% of septic tank installers are female, while 97.9% are male.((https://www.zippia.com/septic-tank-installer-jobs/#cmp-demographics-section))
• Average level of education – The average septic tank installer is high school educated.
• Average age – The average age of a septic tank installer is 42.2 years old.

How much does it cost to start a septic tank business?

Startup costs for a septic tank business range from $100,000 to $150,000. Costs include a pump truck, a truck to transport tanks, equipment, and an inventory of tanks.

You’ll need to become a licensed septic tank contractor. The EPA has resources to find training in your area, which is required. 

You’ll need a handful of items to successfully launch your septic tank business, including: 

• Excavation equipment
• Trucks to transport tanks
• Pump trucks
• Metal detector
• Flushable septic tank locator
• Electronic septic tank locator
• Plumbing cleanout snake
• Ground-scanning radar
• Soil probe rod
• Steel probe rod
• Septic tank probe rod
• Long wooden pole or sludge judge
• Visual inspection of baffles, tees, and walls
• Video inspection equipment
• Pump trucks
• High-capacity vacuum
• Sewer jet, or high-velocity water jet
• Muck rake
• Wayne ball
• Wrecking bar
• Power rodding
• Septic tank risers
• Alarms and control panels
• Effluent filters
• Vent pipe odor filters

How much can you earn from a septic tank business?

You can make money in four different ways: septic system installation, maintenance, inspections, and cleaning. 

A typical installation costs about $4,000. Maintenance prices vary based on the work being done and could easily be $1,000 or more. Inspections are about $300, and cleaning is $400. Your profit margin after the costs of rent, labor, and materials should be about 20%. 

In your first year or two, you might do two installations, five maintenance calls, two inspections, and 10 cleanings per month, bringing in $211,000 in annual revenue. This would mean $42,000 in profit, assuming that 20% margin. As your business gains traction, your business could quadruple. With annual revenue of $845,000, you’d make a fantastic profit of $169,000.

What barriers to entry are there?

There are a few barriers to entry for a septic tank business. Your biggest challenges will be:

• Meeting the education and licensing requirements 
• The startup costs of trucks and septic cleaning equipment

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Step 2: Hone Your Idea

Now that you know what’s involved in starting a septic tank business, it’s a good idea to hone your concept in preparation to enter a competitive market.

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

Research septic tank businesses in your area to examine their products and services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a business that installs the most modern waste management systems that protect environmental health or a reasonably priced septic pumping and cleaning service. 

You might consider targeting a niche market by specializing in a certain aspect of your industry, such as drain field or leach field construction**, or septic tank pumping.

This could jumpstart your word-of-mouth marketing and attract clients right away.

**Drain fields and leach fields remove the contaminants in waste water and solid waste.

What? Determine your products or services

You could start out doing just septic tank cleaning, or you could offer installation, maintenance, and inspections as well. Being a full-service septic tank business will give you the most potential for revenue.

How much should you charge for septic tank services?

A typical installation costs about $4,000. Maintenance prices vary based on the work being done and could easily be $1,000 or more. Inspections are about $300, and cleaning is $400. Your profit margin after the costs of rent, labor, and materials should be about 20%. 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

Your target market will be homeowners or construction companies that build in rural areas. You should spread out your marketing to include sites like TikTok, Instagram, Facebook, and LinkedIn. You can also find construction companies on Google or Yelp and call them directly.

Where? Choose your business premises

You’ll need to rent out an office with space to store your equipment. 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 Septic Tank 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 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “septic tanks” or “septic services”, boosts SEO
• Name should allow for expansion, for ex: “NextGen Septic Services” over “Commercial Septic Solutions” or “Residential Septic Services”
• Avoid location-based names that might hinder future expansion

Use online tools like the Step by Step Business Name Generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

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 sets 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 Septic Tank 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: Present a brief overview of your septic tank business, highlighting the services provided, target market, and approach to delivering high-quality and environmentally safe solutions.
• Business Overview: Describe the range of septic services offered, such as installation, maintenance, pumping, and repair for residential and commercial clients.
• Product and Services: Detail the specific services like septic tank cleaning, system inspections, and emergency repairs.
• Market Analysis: Assess the demand for septic services in your targeted area, considering factors like rural population density and existing sewage systems.
• Competitive Analysis: Identify and differentiate your business from other local septic service providers, emphasizing unique offerings like advanced technology or 24/7 service.
• Sales and Marketing: Outline your strategy for attracting customers, including digital marketing, direct mail campaigns, and building relationships with construction firms.
• Management Team: Highlight the expertise and roles of your management team, especially their experience in environmental management and septic systems.
• Operations Plan: Describe your operational procedures, including scheduling, customer service, and safety protocols.
• Financial Plan: Provide an overview of start-up costs, pricing strategy, expected revenues, and profit margins.
• Appendix: Include supplementary documents like service agreements, environmental certifications, or equipment lists to support your business plan.

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

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’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to septic tank businesses. 

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 septic tank business will shape your taxes, personal liability, and business registration requirements, 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 need 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. 

Form Your LLC

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Step 6: Register for Taxes

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.

The IRS website also offers a tax-payers checklist, and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re 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.
• 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 option, other than friends and family, for funding a septic tank business.

Step 8: Apply for Septic Tank Cleaning Business Licenses and Permits

Starting a septic tank business requires obtaining a number of licenses and permits from local, state, and federal governments.

You’ll need a septic tank contractor’s license. Check with your state for requirements. You’ll also need to make sure you follow EPA regulations.

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. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

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 septic tank 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 the above insurance types.

Step 11: Prepare to Launch

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. 

You may want to use industry-specific software, such as ServiceCore, Smart Service, or WORKWAVE, to manage your scheduling, work flows, and invoicing. 

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero. 
• 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. 

Marketing

Starting a septic tank business can be a lucrative venture in the waste management industry. To ensure your success, consider these effective marketing strategies:

1. Local Partnerships and Sponsorships: Collaborate with local plumbers, real estate agents, or home improvement stores to establish partnerships and sponsor community events to increase your visibility in the local market.
2. Educational Workshops and Seminars: Host workshops on septic system maintenance and educate homeowners on the importance of regular inspections, fostering trust and positioning your business as an expert in the field.
3. Referral Programs: Implement a referral program offering discounts or incentives to existing customers who refer new clients, leveraging word-of-mouth marketing within the community.
4. Direct Mail Campaigns: Target specific neighborhoods with direct mail campaigns, providing informative brochures and promotional offers to households with septic systems.
5. Seasonal Promotions: Offer seasonal promotions such as discounted pumping services before the winter freeze or special rates for routine maintenance during the spring and fall, aligning with homeowners’ needs.
6. Online Reviews and Testimonials: Encourage satisfied customers to leave positive reviews on popular review sites, enhancing your online reputation and influencing potential customers.
7. Social Media Engagement: Utilize social media platforms to share informative content, customer testimonials, and promotions, engaging with the local community and building a strong online presence.
8. Vehicle Branding: Ensure your service vehicles are prominently branded with your company name, logo, and contact information, turning them into mobile advertisements as they travel through the community.
9. Community Events Participation: Attend local fairs, home shows, or community events to set up a booth, interact with potential customers, and distribute promotional materials to generate awareness.
10. Strategic Online Advertising: Invest in targeted online advertising on platforms like Google Ads and social media to reach potential customers searching for septic tank services in your service area.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets 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 septic tank business meets 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 septic tank business could be: 

• Complete septic tank services to keep your system running smoothly
• We do the dirty work for you – full-service septic tank company
• Eco-friendly septic tank installation

Networking

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 septic tank business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in septic tanks 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 septic tanks. You’ll probably generate new customers or find companies with which you could establish a partnership.

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 septic tank business include:

• Septic Tank Installer – assist with septic tank installation
• General Laborers – assist with septic services
• General Manager – scheduling, ordering, accounting
• Marketing Lead – SEO strategies, social media

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 Septic Tank Cleaning Business – Start Making Money!

People are leaving the cities in droves, seeking wide open spaces and a lower cost of living. With that lifestyle, however, comes the need for more septic tanks. This rural migration is industry growth, and starting a septic tank business is a great opportunity. If you’re willing to work hard and provide a great service, you could build a thriving septic tank operation and ensure a cleaner, healthier community! 

You’ve learned about the business now, so it’s time to roll up your sleeves and launch your successful septic tank business.