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Written by: Carolyn Young
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.
Edited by: David Lepeska
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 24, 2022
Investment range
$101,550 - $148,100
Revenue potential
$211,000 - $845,000 p.a.
Time to build
3 – 6 months
Profit potential
$42,000 - $169,000 p.a.
Industry trend
Growing
Commitment
Full-time
These are the critical aspects you should evaluate when launching your septic tank business:
Starting a septic tank business has pros and cons to consider before deciding if it’s right for you.
Trends in the septic tank industry include:
Challenges in the septic tank industry include:
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:
| Start-up Costs | Ballpark Range | Average |
|---|---|---|
| Setting up a business name and corporation | $150 - $200 | $175 |
| Business licenses and permits | $100 - $300 | $200 |
| Insurance | $100-$300 | $200 |
| Business cards and brochures | $200 - $300 | $250 |
| Website setup | $1,000 - $3,000 | $2,000 |
| Space rental | $2,000 - $4,000 | $3,000 |
| Pump Truck | $20,000 - $30,000 | $25,000 |
| Tank transport truck down payment | $3,000 - $5,000 | $4,000 |
| Inventory of tanks | $30,000 - $40,000 | $35,000 |
| Equipment | $25,000 - $35,000 | $30,000 |
| Labor and operating budget | $20,000 - $30,000 | $25,000 |
| Total | $101,550 - $148,100 | $124,825 |
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.
There are a few barriers to entry for a septic tank business. Your biggest challenges will be:
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.
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.
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.
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.
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.
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:
Here are some ideas for brainstorming your business name:
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.
Here are the key components of a 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.
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!
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.
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:
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.
Choose Your State
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.
Securing financing is your next step and there are plenty of ways to raise capital:
Bank and SBA loans are probably the best option, other than friends and family, for funding a septic tank business.
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.
This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.
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.
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.
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:
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
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.
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.
Here are some powerful marketing strategies for your future business:
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:
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.
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:
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.
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.
A septic tank business can be very profitable. You’ll need to provide excellent service and meet EPA standards, and you can be successful.
The frequency of septic tank pumping depends on various factors such as the size of the tank, the number of people in the household, and the volume of wastewater generated. As a general guideline, it is recommended to have a septic tank pumped every 3-5 years.
Develop a professional website that highlights your services, expertise, and customer testimonials.Collaborate with local real estate agents, property managers, or plumbers who can refer clients to your services.
Your septic tank services can include septic tank pumping, inspection, repair, and maintenance. Additionally, you can offer services such as drain cleaning, septic system installation or replacement, grease trap cleaning, or emergency repairs.
Provide informational resources on your website or through brochures that outline best practices for septic system maintenance, such as avoiding flushing non-biodegradable items, conserving water usage, and scheduling regular inspections. Offer personalized consultations where you can assess their specific system, address any concerns or questions, and provide recommendations for proper care.
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