Some people dream of opening big law firms; others big marketing firms. But what about a plumbing company? Most people don’t think of plumbing companies when they think of profitable businesses, but with a shortage of skilled laborers, the demand for plumbers is sky-high.
The Plumbing-Heating-Cooling-Contractors-National Assocation says the industry needs more than 100,000 new workers to fill the roles of retiring plumbers.
But how does one start a plumbing company? The most difficult part is becoming a licensed plumber. The next step? Figuring out the costs.
How Much Does It Cost to Open a Plumbing Company?
Starting a plumbing business isn’t as cost-prohibitive as you might think. In fact, the start-up costs are minimal.
The biggest expense will likely be your van or service truck. You can choose to purchase a new or used vehicle. Used vehicles are the budget-friendly option. It will still cost you several thousand dollars for a used vehicle, but a new one can cost upwards of $30,000 or more.
In addition to a service truck, you’ll also need a certificate. This can cost up to $8,500 and may take up to a year to obtain.
Equipment is an obvious and necessary expense. You’ll need assorted fittings and pipes as well as storage for these parts. Other tools might include:
- Circular saw
- Reciprocating saw
- Pipe wrenches
- Whole hog right angle drill
- Propane torch
- Screw gun
- Cast iron pipe cutter
- Teflon tape
For the business end of things, you’ll need a smartphone, laptop or PC as well as office equipment. The total cost of equipment can easily exceed $5,000.
When you’re just opening your business, you may want to start with the basics. You can always expand in the future. The key important thing is to make sure you have the right equipment and a reliable vehicle to get to your customers.
Steps to Start a Plumbing Business
Now that you understand the costs of opening your business, you can start taking steps to make it official.
Make a Plan
First, you need a plan. A clear business plan is essential to success when running any type of business. If you plan on applying for financing, they will expect to see and review your business plan. Focus on your target market, your initial costs and how long it will take you to start turning a profit.
Form a Legal Entity, Licenses and Insurance
The next step is to register your business and form a legal entity. While you have multiple entity options, most plumbers choose to form an LLC. An LLC will shield you from liability, and you can have a single-owner company.
In addition to forming your business, you’ll also need to obtain the appropriate licenses and insurance. Most plumbers display their license numbers on their websites.
Open a Business Bank Account and Set Up Accounting
Bookkeeping is an essential part of running a business. To succeed, you need to keep track of your income and expenses. The simplest method is to set up a QuickBooks account, which will keep track of your invoices and expenses. In many cases, you can sync up your account with apps and invoicing software to make bookkeeping virtually effortless.
You’ll also need to open a business bank account to manage your finances.