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How To Run a Plumbing Business in the USA

This article provides guidance you can use to surmount the hurdles between you and a thriving plumbing firm

There’s rarely a bad time to run a plumbing business since you’re providing building maintenance services required by millions of homes and business premises.

Housing booms are always particularly auspicious in the United States, but whatever the prevailing economic conditions, the following steps should stand you in good stead when you’re starting or running a plumbing business.

Starting the process

It’s not wise to start a plumbing business with no experience in the sector.

A high school diploma or GED is a prerequisite to undertaking accredited plumbing courses, after which an apprenticeship is a helpful prelude for a full-time role.

If you’re starting a plumbing business from scratch, these are the kind of areas which you could specialize in, potentially diversifying as you grow:

  • Residential plumbing jobs, such as sink, toilet and pipe system installations and repairs
  • Commercial and public buildings, which sometimes involve complex, large scale projects, working on multiple floors and coordinating larger teams
  • Performing maintenance and repair tasks such as fixing leaks, adjusting reduced pressure, and unclogging and cleaning plumbing systems
  • Tackling blockages in sanitary systems, fitting bathtubs and toilets and corresponding pipes, and installing suspended drains
  • Installing water supply systems such as water, kitchen, bathroom and overhead storage tanks and pipes, and fitting excess pipes and sanitation systems

Industry research

Extensive research, encompassing your competitors and industry trends, can give you some plumbing business ideas.

Identify rivals in the same geographic areas and their services, pricing, reputation and other strengths and weaknesses.

A basic Google search can help direct your research. For example, at the time of writing, plumbers in north Chicago with Google business listings include Rescue Plumbing Inc, scoring a five-star average from 67 reviews, and First Chicago Plumbing, notching 4.9 from 129. They must be doing something right, so it’s worth digging deeper.

Typically, general plumbing service pricing can range between $160 to $430 for a job. This amounts to an average hourly rate of $45 to $150.

Perhaps you can leverage new technologies or additional training to close a gap with your most successful competitors.

For instance, you could start installing tankless water heaters, which can cut energy costs, or smart pipe systems that flag leaks.

If you’re in a drought-stricken state like California, you could specialize in greywater recycling systems.

Maybe there is underserved demand for 24-hour emergency repairs – a truly recession-proof segment.

Three interesting facts about the plumbing industry

  • Pipes and drains were installed as far back as 3,000 BC by the Indus River Valley civilization
  • Leaky faucets can waste around 2,160 gallons of water a year and running faucets until water heats up can waste around 9,000 – useful material to inform your marketing
  • Employment of plumbers is projected to grow 5% between 2020-2030, slower than the average for all occupations, according to the US Bureau of Labor Statistics (BLS) – yet 51,000 openings must be filled annually as plumbers retire or switch occupation

Equipment you need to operate successfully

The tools you need for a plumbing business depend on the services you provide.

However, most plumbing firms will need most or all of the following: tools for pipe work like pliers, flashlight, hacksaw and ratcheting pipe threader set; pipe, basin, adjustable, torque and internal pipe wrenches; drain cleaning tools like plunger, hand auger and drain inspection camera; and safety tools like gloves, goggles and heat shields.

Acquiring licenses and insurance

Plumbing companies must fulfil licensing requirements in what is a tightly regulated profession.

Naturally, they vary by state, with Connecticut awarding ‘Journeyperson’ licenses to those who have passed a trade exam, completed an apprenticeship program or have equivalent training and experience.

As for insurance, plumbers generally need public liability, general property, life, workers compensation, and personal accident and illness cover.

Adhering to applicable regulations

Plumbers must comply with relevant plumbing codes that regulate the design and installation of plumbing and sanitary systems, with the International Plumbing Code and Uniform Plumbing Code widely used in the US.

Plumbing codes focus heavily on preventing unsuitable venting, which can release noxious fumes. Other health hazards include exposure to hazardous substances like asbestos and the risk of electrocution.

It’s a must to audit the risks involved, provide relevant safety training, and procure appropriate personal protective equipment (PPE) to comply with health and safety regulations.

Marketing your business

If you’re a small operator and struggling to find time and resources for marketing, then you shouldn’t feel neglectful for prioritizing service delivery.

Provide an excellent service at competitive prices and your marketing plan needn’t be overly expensive or time-consuming to deliver.

Capture the goodwill generated by your exemplary craftsmanship by signing up for review platforms like Google My Business, Yelp and Angi, and ask – and possibly incentivize with discounts – customers for testimonials and job referrals.

A Facebook page is also free and easy to set up and update occasionally.

If you have a little budget too then a professional-looking website and pay-per-click advertising are useful bonuses.

Financing your business

Whether you’re buying a new van or tools, paying for training courses, or hiring more employees, there are many options for raising finance.

Thankfully, plumbers are seen as comparatively safe bets by lenders, which means borrowing on potentially favorable terms.

Business loans offer even better rates if underwritten by the government, but the application process for SBA-backed loans is more convoluted.

Business credit cards provide an interest-free way to buy project materials in advance of being paid by customers providing you pay the bill on time, while cards with lengthy interest-free periods for new purchases can address cash flow issues even more effectively.

Equipment leasing frees up working capital for use on day-to-day operations and makes high quality equipment more obtainable.

Invoice factoring, meanwhile, involves selling unpaid customer invoices to third-party invoice factoring companies, offering a fast, but comparatively expensive solution to cash flow challenges.

Staff availability and recruitment

According to the BLS, the average plumbing salary is $53,910, compared to $38,640 across other occupations – reflecting how demand for skills is outpacing supply.

It also reflects the fact it takes several years to train a plumber, making retention of employees with competitive pay, employee referral programs, and training and promotion opportunities particularly important.

Exit Strategy

An exit strategy offers a route map to retirement – or whatever else you’re planning – and a more profitable sale when you sell your business. Operating in a resilient, in-demand market, well-run plumbing businesses for sale are much sought-after.

Exit strategy tips:

  • Set a likely exit date and use the months or years ahead to strengthen your competitive advantages and mitigate weaknesses to boost plumbing business profit and satisfaction when you value the business
  • Consider who might realistically be interested in buying the business – whether it’s employees, competitors or investors – and what they might want from the business
  • Devise a plan for weaning the business off your influence, such as your customer relationships or managerial or plumbing skills, to make a purchase more palatable to buyers
  • Negotiate a business sale more successfully by considering ways to make the deal more attractive – such as by offering seller financing, earn-outs, or agreeing to stay on post-sale for a certain period
  • Systematize and update financial records, document all operational processes, get your plumbing licenses in order, and get everything else ready for due diligence

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