How to start a plumbing business
If you’re an experienced plumber, you might be thinking of going it alone and becoming your own boss. Maybe you work for someone else and think you could run a business more successfully, or perhaps you just want the opportunity to do things your way.
Setting up a plumbing business does come with challenges and you need to be prepared to put in the work, but it can bring a range of benefits - not least the ability to determine how you work and how much you earn. Crucially though, to make a success of your new venture, you’ll need to have a clear strategy in place.
How to start your own plumbing business
To help you, we’ve created this guide to starting a plumbing business. From carrying out market research to making sure you have suitable plumbers’ insurance in place, we outline the most important tasks involved in setting up as a self-employed plumber.
Research your local market
When you’re starting out, it’s essential that you research the local competition. Chances are, you’re not going to be the only plumber operating in your area. This means that in order to attract customers, you’ll need to find things that separate you from other tradespeople offering similar services.
By looking up the other plumbers in your area and seeing the types of service they offer and how they market themselves, you can identify the selling points that will help you to stand out from the crowd. For example, are you a specialist in tackling certain types of plumbing jobs? Can you offer quicker response times than other plumbers? Is your pricing more competitive?
Taking the time to research the market and understand exactly what you’re up against will help you to plan your business offering as effectively as possible from the outset.
Put together a business plan
There are many advantages and disadvantages to writing a business plan, and creating one of these plans isn’t a requirement for all new plumbing companies. However, it can be a big help in certain circumstances - such as if you need to apply for loans, investments or grants. A business plan is a written document that describes your company, including what you want to achieve and how you plan to achieve it. It can give you a good opportunity to clarify your business idea, set goals, measure your progress and identify potential problems.
Register your business
One decision you’ll need to make early on when setting up a plumbing business is the structure you want your company to have. For example, you might choose to become a sole trader, or perhaps you’d prefer to set up a limited company. These are two common options for tradespeople, and there are benefits and drawbacks associated with both.
Becoming a sole trader can be an attractive option if you want minimal paperwork when setting up. There are relatively few regulations to adhere to under this model. For instance, you won’t be expected to register with Companies House. However, it’s important to be aware that under this type of structure, you have complete financial liability if your business fails. This is because there is no separation between your personal and business assets.
On the other hand, setting up a limited company comes with the added administrative burden of having to register with Companies House. You also have to submit your accounts every year. However, one of the major appeals of this type of structure is that it means your business liabilities are limited. In other words, your personal assets are protected if your company gets into financial difficulties. Another benefit of limited companies is that they enjoy certain tax breaks that sole traders don’t get.
Once you’ve decided which structure best suits your needs, you’ll need to register your business in the appropriate way.
Invest in the tools you need
You may already have some or even most of the tools you need to go it alone, but if you’re lacking any important equipment, now’s the time to get it. Depending on what you need to buy, this could be a big expense.
It’s essential that you choose your equipment carefully. Always bear in mind that while buying cheap tools might save you money upfront, this equipment can be unreliable and may wear down and break more quickly than higher quality tools. The same principle applies to your work van. You need a reliable means of getting between jobs and suppliers. Also, your van should be able to comfortably fit your tools and supplies.
Purchase insurance
It’s hard to overstate the importance of getting the right insurance for your new business. You’re investing your heart and soul, not to mention money, into your new venture, and so you’ll no doubt want to make sure you have suitable financial protection in place in case things go wrong.
What insurance do plumbers need?
Most types of insurance aren’t a legal requirement. The exception to this is employers’ liability cover. If you’re an employer in the UK, you are obliged by law to have this type of financial protection in place. It safeguards your finances if an employee is injured or becomes unwell because of the work they do for you.
While other types of cover aren’t mandated by law, there are various forms of insurance that can play a crucial role in helping to protect your finances. No matter how careful you are, in your line of work there will always be risks to your finances. For example, what if you accidentally damage a customer’s property or cause them to suffer an injury while you’re working at their home or business? For eventualities like these, it’s advisable to take out public liability cover. In fact, some customers, particularly commercial clients, may insist that you have this type of insurance in place before they will agree to hire you for a job.
Then there are your tools to think about. What if they were stolen, damaged or lost? If you would struggle to cover the cost of replacing or repairing essential equipment, you should strongly consider taking out tools insurance.
As a self-employed tradesperson, you might also want to take out protection in case you suffer an accident at work, or while on your way to or from work, that stops you from being able to do your job and therefore earn a living. Occupational personal accident insurance pays either a weekly amount or a cash lump sum following such an accident.
At Markel Direct, we offer specialist plumbers’ insurance that incorporates various types of cover into one policy, allowing you to tailor your insurance to suit your needs.
Market your business
Particularly at the very start of your business venture before you start benefiting from word-of-mouth referrals, it’s vital to get the message out there about your services. There are many things you can do to help with this, including setting up a business website, running promotions on social media and getting listed on online trades directories. You might want to combine these efforts with more traditional forms of marketing too, such as leafleting and direct mail campaigns.