How to start a plumbing business

Most one-van shops start in service and repair. The jobs are short, paid the same day, and every good visit can turn into a repeat customer. New construction pays in bigger checks but on the builder's terms, so it suits a shop with cash in the bank.

Pick the two or three kinds of work you want and say so on your website and your Google profile. A shop that says "drains, water heaters and repairs" gets the calls it wants.

Many states license plumbers through a state board, often in apprentice, journeyman and master steps, and the business itself may need a contractor registration on top. In states that leave it to cities, the city or county decides. Whichever applies, the permit desk is where it shows: most water heater swaps, repipes and sewer jobs need a permit, and only a licensed plumber can pull one.

If you work on homes built before 1978 and cut into painted walls, the EPA's lead rule can apply to you too. The EPA names plumbers among the special trade contractors covered.

The SBA lists the launch steps in this order: pick a location, choose a structure, choose a name, register, get federal and state tax ID numbers, apply for licenses and permits, open a business bank account, and get insurance. For a plumbing business working out of a truck, the location is usually your home address and the area you will serve.

• Structure. A sole proprietorship is the simplest. An LLC keeps the business separate on paper. Ask an accountant which fits your state and your plans.
• Tax ID. The IRS gives out an employer identification number (EIN) online, and says you never have to pay a fee for one. Websites that charge for an EIN are not the IRS.
• Self-employment tax. The IRS lists the self-employment tax rate as 15.3%: 12.4% for Social Security and 2.9% for Medicare. Income tax comes on top, so set money aside from every job.
• Bank account. Open it before the first payment lands, so every dollar in and out is easy to find at tax time.

Your name goes on the truck, the invoices, the Google profile and the yard signs, so pick it once. The free plumbing name generator gives 36 ideas for your town and style, each with a domain idea, and lists the checks to run before you commit: your state's business name search, a federal trademark search and the domain itself.

The SBA describes general liability insurance as cover for financial loss from bodily injury, property damage, medical expenses and defending lawsuits. It says businesses with employees are required to carry workers' compensation, unemployment and disability insurance, and some states ask for more.

For a plumber, the claim to plan for is water damage: a fitting that lets go overnight can ruin floors and ceilings. Ask your agent how your general liability policy treats water damage and your own work, and add commercial auto for the van and tools cover for what is in it. Many builders and property managers ask for a certificate of insurance before you start.

No total here on purpose. What you spend depends on what you already own, new or used, and how much work you plan to take on. Price your own list with a local supplier, then put the numbers in the startup cost table of the free business plan template, which adds them up for you.

• A van or truck with shelving, set up so you can find a fitting in the dark
• Hand tools: pipe wrenches, cutters, a press tool or torch kit, depending on what you work with
• A drain machine sized for the lines you will clear, and a sewer camera when the work calls for one
• A stock of common parts: supply lines, valves, wax rings, fill valves, fittings in the sizes you see most
• A way to haul and dispose of old water heaters and fixtures
• Safety gear: gloves, eye protection, knee pads, a respirator for dusty crawlspaces

The two lines that swing the total most are the vehicle and the drain and camera equipment. Many shops start with a used van and rent or borrow the big drain machine until the work pays for one.

Plumbing customers pay for the fix, but your costs are hours, parts and the drive. Start from your own hourly cost: what you need to earn, your insurance, the van, your phone and software, divided by the hours you can actually bill. The free plumbing labor rate calculator does it step by step, and the plumbing cost estimator shows what common jobs run.

Most service shops then pick one of two ways to quote: hourly plus parts, or a flat price per task from a price book. Flat prices are easier for customers to say yes to and reward you for getting faster. Either way, set a trip or diagnostic charge so a visit that ends in "I will think about it" still pays for the drive. Mark up parts with the markup calculator so the shelf pays for itself.

• Answer every call. A homeowner with water on the floor calls until someone picks up. Koira answers on your number and texts back three open times when you are under a sink.
• A Google Business Profile. Your real name, the towns you serve and photos of real work. Our guide to SEO for plumbers covers the rest.
• Realtors, property managers and landlords. They need a plumber they can call every month. One good property manager can fill a slow week.
• A website with prices. Koira builds one with a page for every town you serve, and instant quotes answer "how much for a water heater" at night.
• Your neighbors' neighbors. After a job, Koira mails cards to nearby homes with a photo from the work.

Get paid before you leave the driveway. For bigger jobs like a repipe or a sewer line, send a written estimate with good, better and best options and take a deposit when they sign. For service calls, the invoice goes out when you finish and the customer can pay at the door by card or phone wallet. Then ask for the review: Koira asks an hour after the invoice is paid.

Your first hire is usually a helper or an apprentice, not a second licensed plumber. Check what your state allows a helper to do on their own. A water heater flush or a fixture swap may be fine, a permit job may not. Once there are two vans, the drive between jobs is where the profit goes, so sort the day by the route. For the business side, read how plumbing companies run on Koira.