How to Start a Plumbing Business - A Plumber's Guide to Going Out on Your Own

by Team Tradify, June 22, 2022

If you’re reading this, you’ve probably been thinking about being your own boss for a while. You may be working for someone else's plumbing business and reckon you could do the same thing. Maybe you're sick of your boss, maybe you think you could run a better plumbing business, or maybe you just feel like you’ve got enough experience under your belt to take the next step. The first step is making a plan.

Whatever your reasons, one thing is clear — it's a great time to start your own plumbing business.

Short on time? Skip ahead:

Setting goals for your plumbing business
A plumbing business plan
Training and qualifications
Finances for your plumbing business
Marketing your plumbing business
Strengths and weaknesses
Learn from others in the industry
Build your business

Plumbers: a global shortage means you'll always be in demand

Globally, the demand for plumbers is always high. Check out these stats:

🇺🇸 USA - Career Explorer says the plumbing job market is expected to keep growing throughout the decade, and there’s a shortage of plumbers there too.
🇬🇧 UK - Able Skills says that demand for qualified plumbers is increasing and there are not enough plumbers to go around.
🇦🇺 AU - BusinessTech says that plumbers are in high demand and can easily earn over $80/hour.
🇳🇿 NZ - The Ministry of Business, Innovation and Employment says that demand for qualified plumbers is growing – and is expected to keep growing.

While there are always ups and downs in different economies, the basic fact is that a global shortage of plumbers means now is the perfect time to start a plumbing business.

Need a hand coming up with a name for your electrical business? Try our Plumbing Business Name Generator!

The path to business ownership isn’t always easy. You need to be prepared to put in the hard work, but it'll be worth it. So if you’re ready to go solo, this guide is for you. We’ve covered everything you need to know about turning your existing plumbing skills into a successful business.

So let's turn on the taps and get the ideas flowing!

1. Setting goals for your plumbing business

First, ask yourself this question: Why do you want to start your own plumbing business?

Is it because you want to grow your income? Do you want to work flexible hours that free up more time with your family? Trying to grow a prodigious plumbing empire? Or rather just work for yourself?

You need to be clear on your reason behind starting a plumbing business, because that’s the foundation on which it will be built. Once you’ve got your goals and objectives clear in your mind, it’s time to start thinking about the practical stuff.

Registering your plumbing business

Time to make it official — the next step is to register your business. Read the points below for information on registering a business in your region. When deciding on your business structure, think about your goals for the future. Are you looking to grow, or fly solo forever?

🇺🇸 USA - you can apply for a sole proprietorship or form an LLC.
🇬🇧 UK - most people register as sole traders or limited companies.
🇦🇺 AU - you’ll need to apply for an Australian Business Number (ABN).
🇳🇿 NZ - you’ll register as either a sole trader (Ministry of Business) or a company (NZ Companies Register).

2. A plumbing business plan

Don’t expect to get your plumbing business off the ground without a business plan. Yes, it takes a little time, but it’s time well spent. That’s because a comprehensive plan gives your new business structure, purpose and a clear-cut strategy.

Read our guide to writing a proper business plan.

Your plumbing business plan should include:

Financial projections
Growth opportunities
Marketing strategies
Financing
Short/long-term goals

To make things easier, we've put together a business plan template specifically for trade businesses.

3. Training and qualifications for plumbers

People don't hire unqualified plumbers. Of course, you know this and likely have the necessary training, but it's important to consider what qualifications you already have and any you might like to get in the future. The minimum requirements are essential to starting a plumbing business while upskilling with further training is beneficial as you become more established.

Gaining further qualifications means you may be able to offer more services and ultimately make more money. With the right qualifications, you can work on things like:

Central heating
Water recycling systems
Oil and gas-fired appliances

When potential customers check you out online, one of the first things they’ll be looking for are your credentials. Promoting your qualifications upfront will help gain trust and win you more work.

It's also good for plumbing business owners to stay up-to-date with qualification requirements in case they bring on an employee or apprentice. Programmes vary not just from country to country, but also between states, regions and provinces. The links below should help you get started:

🇺🇸 USA - Plumbing qualifications
🇬🇧 UK - Plumbing qualifications
🇦🇺 AU - Plumbing qualifications
🇳🇿 NZ - Plumbing qualifications

4. Finances for your plumbing business

The next thing to get serious about is resources and capital. Starting a business doesn’t come cheap, and will almost always require an initial outlay of cash. As an independent plumber, your major costs will likely be investing in a vehicle and equipment. The scope of these will vary depending on what sort of market you intend to service.

You've got two options here:

Fund your own venture
Find cash from a third party

Unless you’re lucky enough to have enough cash on hand to launch your business, you’ll need to approach your bank or other lenders about a small business loan. Almost all major banks have small business departments, and they provide a range of financial options:

Business accounts
Credit cards
Small business loans

They often have small business experts who’ll guide you through the process and be available on an ongoing basis to give you advice and guidance when needed. Just make sure you take your well-thought-out business plan with you, because no bank is going to lend you a cent if you can’t show them you’ve got a plan.

Government loan schemes

Your local government might also have financial schemes set up to help new businesses. Find out for yourself by following these links:

🇺🇸 USA - SBA provides limited grant funding to eligible businesses.
🇬🇧 UK - Start-Up Loans of £500 to £25,000 are available to start or grow your business.
🇦🇺 AU - Check if you’re eligible for a variety of grants that vary between states.
🇳🇿 NZ - Government grants, advice, and mentoring are available, depending on your business.

Angel investors

If the above isn't helpful, there may be other options when it comes to finance. Sometimes that might be family – and often that means no interest to worry about. But there are angel investors out there too — successful entrepreneurs in search of investment opportunities with promising businesses.

They’re looking for a piece of the action, but they also have their own investment criteria and expectations. Angel investors provide capital for new businesses and startups. They often receive convertible debt in return, or a percentage of ownership. They are often more willing to provide money than traditional lenders.

🇺🇸 USA - Angel Investment Network
🇬🇧 UK - Angel Investment Network
🇦🇺 AU - Angel Investors
🇳🇿 NZ - Angel Association

Purchasing plumbing equipment

Unless you already have your own equipment, an initial investment in tools is going to be your biggest cost. While the administrative costs of setting up a business are fairly low, you’ll definitely need to invest in a set of wheels if you don't have some already.

Typically, plumbers need a van or ute that can house all of their equipment and tools. It’s a mobile business, and you want to have everything you need on hand as you travel around your customers’ sites. There are some great financing options out there, so you won’t necessarily need a huge stash of cash to drive away in a new van. You can even claim tax back on the purchase!

🇺🇸 USA - Business tax write-offs
🇬🇧 UK - Expense claims for UK contractors
🇦🇺 AU - Expense claims for Aussie tradies
🇳🇿 NZ - Expense claims for NZ tradies

Equipment costs will also vary significantly, depending on your needs and preferences. This isn’t generally the best place to cut costs, as cheap tools are unreliable, and will deteriorate much faster than better quality counterparts.

When you’re kitting out your van for the first time, you’ll want to include the essentials.

Check out our articles: 'Best Tool Bags for Plumbers' & 'Best Power Tool Brands for Plumbers'.

Plumbing stock

Fittings
Pipes, including plastic and copper piping
Inlet valves
A range of tap wear
Elements
Thermostats
Hot water cylinder valves

Plumbing tools

Crescents
Grips
Pipe cutters
Hacksaws
Cordless battery toolset: drills, impact driver, saw grinder, screwdriver

Costing up your initial outlay can be daunting, but remember that both your vehicle and your equipment are assets, not liabilities. All can be resold if necessary, or added to the total value of your business if you decide to source capital-based loans or funding.

We've created a handy Cash Flow Forecast Template & Guide to help you forecast business's cash flow and keep all your jobs on track.

Accounting and taxes

Have you thought about how you're going to stay on top of financial admin? Will you hire an accountant, purchase accounting software, or both?

For an all-in-one fix that’ll cover your day-to-day quoting, scheduling, and invoicing processes into one streamlined system, Tradify is a must-have tool. Take control of your plumbing business with intelligent, trade-specific features designed to keep your business in top gear.

To make things even easier, Tradify also integrates with your favourite accounting software:

As a small business, the last thing you want to do is get on the wrong side of the taxman. Guaranteed, he’s going to come knocking eventually. When he does, you could get hit with hefty back payments, interest rates and fines that could cripple your venture. Avoid this by playing by the rules from the word go. Find an accountant, and cash in on big-time savings in the form of both time, and money.

Find out if you need an accountant.

Government regulation

The other annoying thing you can’t afford to ignore are government regulations. They can be a chore, but if you’re not compliant it could cost your business big-time. Make sure you get it right from the start:

Insurance

You’ll need insurance for your vehicle and equipment, as well as other essentials like general liability insurance. Depending on your priorities, you may also want to take out other policies like worker’s compensation, a general business owner’s policy and income protection insurance.

If you’ve got your very own small business expert at your bank, the package they set you up with will probably include insurance. But if it doesn’t, you’ll need to do your homework to find a reputable provider of business insurance.

Read our article on business insurance for tradespeople.

Learn more about keeping your tools safe.

5. Marketing your plumbing business

It’s unlikely you will be the only plumbing business in town. Scoping out the competition is not a sneaky task to keep on the down-low, it’s an important step and you shouldn’t skip it. It’s essential that you find out about their strengths and weaknesses, or else how will you know how to beat them? Have a look at their websites and see what they're about. The goal here is to find something that will help your business stand out.

Remember, there’s a big difference between imitation and inspiration. Hone in on a concept or idea that you love and find a way to make it your own.

How much should you charge for your labour/time?

Pricing up your service can be difficult, and the trick is to strike a balance between quality and quantity. Yes, there are clients out there that will always opt for the cheapest plumber, but competing on price isn’t always the best business model. Low prices will attract clients who want everything for nothing, while high prices may attract clients with high standards. Think about what you plan on delivering, and price your service accordingly.

To help you with this, we’ve developed a Charge-Out Rate Calculator that makes crunching the numbers super easy.

Growth opportunities

As a small business, you’re going to want to put yourself on track for growth. Especially if one of your goals is to get a cracker-jack workforce in place so that you can get off the tools. So how can you get there?

Do your homework about what the economic outlook for plumbers in your area might look like. For example, setting up a business in an up-and-coming neighbourhood or a new suburb will likely translate into increased demand a few years down the line.

Electricial Business Growth Opportunities

To start with, at least consider:

Building a website
Google Business
Photography
Reviews
Social media platforms:
Listing with local business directories:

Where is your plumbing business going to operate?

The nature of a plumbing business means you’re mobile. When setting up your business, think about what areas you’d like to service, and how you can take a geographical approach to optimising business. For example, if you live in an area that’s saturated with plumbers, but an hour away there’s hot demand, it could be worth the time and petrol to include that area. The trip will pay for itself with lots of new customers.

You can also factor pricing into the mix. If the market for low-cost suppliers in your local area is saturated, try opting for a higher price point, and ‘boutique’ service.

Finding your competitive advantage

You’re probably not going to be the only plumber providing a service in your local area. That’s why it’s important to differentiate yourself from other plumbers. It's known as a competitive advantage.

A competitive advantage is what you do better than anyone else. The smarter you can be about developing and promoting your competitive advantage, the better placed your business will be to succeed.

Do you specialise in a particular area? You might want to build a reputation for dealing with difficulties other plumbers shy away from.
What kind of guarantees can you offer?
Is there a tech solution you could harness, something that no-one else is using?

Whatever it is that sets you apart from everyone else — own it. It’s what will make you stick in people’s minds and help you win more work.

Get ready for launch

Now you’ve got all your tools and equipment ready to go, your business plan is looking robust and shiny, and that new work vehicle is itching to get out on the road. So what’s next?

Start by testing your plan, and working your way towards a business model that works for you. Go lean with your approach, and remember to spend less time planning and more time doing. This will allow you to test ideas quickly, build on your success, and learn from your failures.

Scoring new clients

When launching a new plumbing business, no network is quite as valuable as your family and friends. Pretty much all households need plumbing work at some point, so make your inner circle your first point of call. Once you’ve got a bit of a following you can start to build clients via other channels. Word of mouth is invaluable, as are marketing channels like social media.

Check out our Marketing Plan for Plumbers that offers practical advice to building up your customer base, including examples of what other trades businesses are doing to generate more work.

Marketing channels for plumbers

6. Know your strengths and weaknesses

It’s important to be realistic and honest with yourself here. If you know that admin isn’t one of your strengths, look for tools that can help. In this day and age, there is technology and apps developed for trade businesses. Make sure you check out the plumbing software available to help save you time and make your business more efficient.

If you’ve got the gift of the gab, make the most of it when you’re dealing with customers. Plumbers sometimes need to solve problems customers might be embarrassed about (blocked toilet anyone?) so use your gift to put them at ease.

Whatever your strengths, work them to your advantage. Then identify weak points, and take steps to work on improving your own skills, or simply outsourcing to experts. We’re talking specialist processes like accounting and web development.

SWOT analysis

Finding it difficult to figure out where you smash it and where you crash it? Running a SWOT analysis is a great way to not only understand your strengths (S) and weaknesses (W), but also identify opportunities (O), and anticipate threats (T).

What is a SWOT analysis?

Usually, strengths and weaknesses are internal aspects of your business (what you’re good at, what you’re not so good at). At the same time, opportunities and threats are external forces (what is likely to impact on your business in a negative or positive way).

Strengths – top strengths or benefits of your business, and how you can protect and enhance them.
Weaknesses – your top weaknesses or issues, and how you can minimise them or do better.
Opportunities – top opportunities for your business and how you can access and take advantage of them.
Threats – your top threats, and how you can minimise them and do better.

Use this basic template to write them down – this will help crystallise your thoughts:

SWOT Analysis for electrical business

7. Learn from others in the industry

Podcasts are a great way to listen and learn while driving to and from jobs. Tradify's own podcast is made specifically for tradespeople looking to start or grow their business. Most phones have built-in apps for podcasts, or you can try Spotify.

With 29 million podcast episodes available across all the different platforms, you’ll be sure to find something worth listening to. And, because it’s a growing medium for content, you won’t have to put up with too many ads.

Behind the Tools with Tradify

Tradify's Behind the Tools podcast is an inside look at trade businesses from all over the world. Each episode we bring on a guest to answer the real questions you have about life in the trades, running a business, and how to overcome the challenges that come with being a tradesperson.

You can watch the videos on YouTube or listen to our podcast on your favourite platform:

We asked one of our own plumbing clients about the most critical aspect of starting and growing a plumbing business. Here’s some advice to keep front of mind at all times:

“Stay honest and stay loyal with your customers. That way, you’ll always have repeat business and that’s a key goal for any plumber. If you’re dodgy and ripping people off, it will come back to bite you. If you charge fair and always do a great job, they’ll keep coming back and they’ll tell others about you. Repeat business – that’s the goal.”

Tom - PipeFix Plumbing

8. It’s time to build your business

For most tradespeople, running a business or working as a self-employed contractor is a tried and true way to live a better life. You’re calling the shots – the hours you work, what jobs you take on, how much you charge. It means spending more time with the family and doing the things you love. And while it’s not always about the money, making more money is a welcome side-effect of going out on your own.

Building a business from scratch isn’t a walk in the park. There’s a lot to consider, but just as you would tackle a new building project, a strategic, step-by-step approach will see your business up and running in no time.

Work your way through this guide and be sure to get your business plan sorted. Keep your goals and objectives in mind and continually hone your competitive advantage so that your reputation grows. Start right by setting yourself up with plumbing job management software that will scale with your business. It’ll pay off as your business grows and you begin to hire staff.

Already looking at hiring an apprentice? Download our Plumbing Apprentice Interview Question Template!

Bookmark this guide, keep your business plan on hand, and refer back to them regularly. They’ll help you take a strategic, step-by-step approach to starting and running your plumbing business. Keep your goals and objectives in mind, and continually hone your competitive advantage so that your reputation grows.

If you're looking for plumbing software to run your business try Tradify for free!