Thinking of setting up as a plumber? You'll need to be practical, physically fit and enjoy working in different locations. Our guide gives you all the essentials for starting up and running your own plumbing business.
- Research your target market
- Decide which services to offer
- Consider your work rate
- Price your services
- Promote your business
- Buy an existing business
Research your target market
When you plan your plumbing business it's important to think carefully about who your potential customers will be and make an assessment of the level of existing competition. Doing some market research will help you with this.
Customers
Think about how many people are likely to use your services.
Domestic work
Pay attention to the type of housing in your area. For example, are houses large or small? Are they old or new? Do they appear well kept or run down? Are some buildings spilt into several flats? Is accommodation mainly owner-occupied or mainly rented? Is some owned by the local authority or by a housing association?
If you intend to offer gas installation and maintenance services, find out which areas in your locality are connected to mains gas and which, if any, are not.
Work for other businesses and organisations
Think about other buildings in your area. Launderettes, shops, pubs, offices, factories, schools and so on will all require the services of a plumber at some point. Identify which are most likely to use your services - a local shop, for example, might be more likely to call in a small plumbing firm than a major supermarket.
Once you have identified who your potential customers are, you can direct your advertising efforts at them.
Contract work
Find out about any proposed new housing developments and regeneration schemes planned for your area if you decide to tender for this type of contract.
Large organisations who invite firms to tender for contract work may be reluctant to use a newly established business. Also, a young business may have difficulty in funding a large contract, as many things may have to be paid for well before any payment is received. But it may be worth finding out who is responsible for putting plumbing work out to tender in large organisations such as housing associations and local authorities. Try to find out how the tender process works and what you would have to do if you wanted to tender for a contract.
Sub-contract work
Try approaching other businesses that might be expected to need a plumber's services. You could, for example, leave your details with local building contractors or even with other plumbing businesses that regularly require sub-contractors. Look on Yell.com and other similar online directories to find out about these types of business in your area.
Specialist work
Think about whether there is local demand for specialist services such as solar heating installation and other renewables. These technologies have become very popular, and you may find that there's demand from householders and/or businesses that specialise in supplying renewables.
Establishing the level of competition
Once you have decided who your customers will be, you need to find out how well they are already served.
How many other plumbing firms are there in your area? A browse on Yell.com and other similar online directories will help to establish this. You could also look at local print directories. How many offer the same services that you intend to offer? These are your direct competitors.
Try to find out more about your competitors. Often you can get an idea of this from their advertisements and websites:
- what services do they offer
- do they advertise any special features - for example no call-out fee, free estimates, guaranteed work and so on
- do they belong to any trade associations, for example the Chartered Institute of Plumbing and Heating Engineering (CIPHE)
- what sort of impression does their advertisement give you (for example, does the firm come across as small and friendly, large and efficient, good value, upmarket?)
Health and safety
As a plumber, you could be working with water, electrical equipment and gas or in buildings containing asbestos - each of which pose serious risks to health and safety. You might need to register as with a competent person scheme. If you will be working on gas equipment and appliances, you are required by law to be registered as certified to do so by the Gas Safe Register. Similar schemes exist for oil fired equipment.
A range of other health and safety regulations apply to water supply, gas safety, the handling and disposal of waste, personal protective equipment in addition to a range of voluntary and compulsory registration schemes and employment laws if you have any employees.
Insurance for plumbers
When you start up in business you will need insurance cover. This might include:
- employer's liability
- public liability
- professional indemnity and contractor's liability insurance, including cover for flood damage
- premises, premises contents
- product liability
- unfixed materials, plant and equipment on site
- combined property
- motor insurance (for business vehicles)
- loss of earnings
You may be required you to have a minimum level of public liability insurance to join some professional associations and 'approved contractor' schemes. Some associations offer members access to discounted cover.
Research current trends, plus legal and tax issues
Decide which services to offer
Think about the range of services that you will offer to your customers. You will need special training, qualifications and certificates to offer certain services such as gas installation - so make sure at an early stage in your planning that you and any staff are appropriately qualified.
You might work on both new and existing buildings. Some of the types of work that you may decide to undertake include:
- installation of sanitary fittings
- installation of other appliances, for example jacuzzis, washing machines, water softeners, garden watering systems and so on
- general repairs to existing pipe-work and systems
- installation, maintenance and testing of gas appliances
- gas checks for landlord's safety certificates
- legionella inspections and risk assessments for landlords and other organisations
- installation and maintenance of water heating and central heating systems, including renewables like solar and air-source water heating and biomass boiler systems
- central heating power flushing
- installation and maintenance of air conditioning and ventilation systems
- drain unblocking, surveys and repairs
- emergency repairs
You may decide to specialise in a particular type of work, for example launderette maintenance. Or you might undertake all types of work for which you are qualified.
Emergency services
If you decide to offer an emergency service you will probably make this available 24 hours a day 365 days a year. The types of jobs that are commonly required in an emergency include repairing leaks (often caused by frost-damaged pipes), unblocking drains and toilets and possibly repairing heating systems. Emergency customers will expect a prompt service.
Added value services
The plumbing industry is competitive and you may decide to offer your customers a range of attractive 'added value' services. These might include, for example:
- guaranteed one hour response on emergency call-outs
- no call out charges
- free estimates and quotations
- written guarantees on all work
- local water authority 'approved contractor' status
- membership of a recognised trade association
- a freephone telephone line
- a 'no job too small' promise
Other types of work
Many of the jobs you undertake will give rise to other work that will need to be done, for example electrical work, re-plastering, tiling and so on. Depending on your skills and experience, you may decide to do these yourself. Alternatively, you might engage a sub-contractor to do them for you.
Consider your work rate
Assuming that you get a fairly steady stream of work, the amount you can earn depends partly on the number of days you work and the length of your working day.
You may decide to stick to normal business hours, for example 8.30 am until 5.30 pm Monday to Friday and, perhaps, 8.30 am until 1.30 pm on Saturdays. Or you may decide to work longer hours. Maybe you are prepared to work very long hours when your services are in demand, taking some time off during quieter periods.
Many plumbing firms offer a 24 hour emergency service for work such as repairing burst pipes. If you intend to offer this service you will need to make sure that you can provide cover at all times. You might decide to team up with another plumber to share responsibility for emergency calls.
Work rate
As an experienced plumber, you should have an idea how long certain types of jobs will take you. It is very important when quoting for a job that you can make an accurate estimate of how long it will take. It's no good quoting for three days work if it ends up taking you five!
The speed at which you work depends on your own skills and experience and on the type and standard of the work that you do. Your charges should reflect all of these things. Bear in mind that you may well be motivated to work hard and put in long days, but your employees (if you have any) may not be prepared to match your work rate. You'll aim always to get the best out of them, but be realistic in your expectations.
Non-productive time
Unfortunately, not all of every working day will be spent earning money. Here are a few examples of reasons why you will sometimes find yourself working hard but earning nothing:
- visiting sites to cost new work
- finishing off jobs that take longer than you had thought (possibly due to unforeseen problems)
- re-doing faulty work
- travelling to and from jobs, or to get tools or materials from a supplier
- repairing tools or vehicles
Sometimes you will find that you are unable to work at all, because:
- you are waiting for materials to be delivered
- a vital tool or piece of equipment is broken
- you are ill
Take all of these factors into account when estimating the maximum number of productive hours that you can work each month.
Price your services
How will you decide on your prices?
First decide how you will charge for the work you do. For example, you might:
- charge for your services on an hourly or daily basis, adding to this the cost of any materials that you supply - perhaps with a mark-up percentage added
- quote on a fixed price per job basis; you might, for example, have a standard charge for installing a boiler and seven radiators, for unblocking a drain or toilet, or for attending an emergency call-out
You may decide to use different methods of costing for different jobs, depending on who the customer is and what the job is like.
It is very important that you set your charges carefully. You must make sure when deciding on what to charge that, assuming you get enough work, you will earn enough to cover all of your operating costs, including your drawings. Your charges should reflect your skills and qualifications.
Also consider the following points when setting your charges:
- what do your competitors charge for similar work
- do you aim to win business away from your competitors with attractive pricing
- will you vary your rate depending on the type and complexity of the work involved
- will you make a profit on any of the goods and materials that you supply or purchase on behalf of your customers, or will you pass these on at cost (the same goes for any sub-contractors' services you need to buy in)
- will you make a call-out charge for some types of job
- will you charge a higher rate (for example double time) for out of hours emergency work
- will you charge extra for certifying work covered by Building Regulations, or will you absorb this cost
Quote or estimate
If you give a quote for a job, that is a fixed price. Once it has been accepted by a customer the price can't be changed, even if there is a lot more work to do than you realised when you prepared the quote. So it's very important that your quotes give precise details of what is covered and make it quite clear that any variations or extras not covered by the quote will be charged for as extras.
An estimate is not a fixed price, it's just your best guess of what the job is likely to cost. You are not bound by it. It is perfectly acceptable to provide several estimates, each taking into account different circumstances from best to worst case scenario.
If necessary explain to customers what could lead to the price for a job having to change - for example unforeseen problems that need to be rectified, or extra features added to the specification. And if the customer asks for extra work to be done during the course of a job, be clear about how this will affect the overall cost.
It's usual to provide estimates and quotes free of charge on a no-obligation basis. You might, though, decide to make a charge for more complex and time consuming consultancy work - perhaps you will refund this charge if it leads on to a substantial contract.
Trade rates
Clients that are other businesses might expect you to offer them a special 'trade rate'. Large organisations that invite firms like yours to tender for contract work will also expect your rates to be very competitive, as will insurance companies.
Be aware that many of your clients will get quotes from several plumbing firms, so you need to be able to quote accurately and competitively. However, don't cut your own throat. Many clients value good, efficient service and are prepared to pay a realistic price for it. Above all, make sure that you don't end up working at a loss because your quote was too low!
Special guides are available to help you when pricing plumbing work. They give up to date advice on what rates to charge for particular types of jobs.
Promote your business
It's important to advertise your business effectively, to let your potential customers know who you are, where you are and what you can do for them.
Many of your customers will not require plumbing services regularly and may not have the name of a plumber to hand. Emergency customers in particular won't want to spend a long time looking for a plumber and will often telephone the first reputable firm that they come across.
Advertising and marketing
Now that so many people search for plumbers online, a good website can be a very good way of advertising your business and reaching a wider range of customers. Think about getting listed in online directories - perhaps 'contact an expert' directories run by some trade associations.
Social media can also be an effective way of marketing your business, staying in touch with previous customers and making contact with potential new ones. Think too about using relevant forums and perhaps a blog (although be aware that some forum websites ban blatant advertising in forum posts). You could sign up to a review website for trades-people such as Checkatrade. You could also consider trying to obtain work through job-referral websites like Mybuilder.com and Rated People too.
An entry in a local print directory can be an effective way of advertising your business. However, many of your competitors will have done the same so try to make your business stand out.
Some firms spend a lot of money on large, eye-catching display advertisements. You will have to decide whether to compete head on with these firms, or look for a different way of attracting customers. You could, for example:
- focus on your own unique selling point (USP) in your advertising material. This might be, for example, "25 years experience", "Family run firm" or even simply "Friendly, honest service"
- advertise in other ways. For example, you could distribute a paper flyer, plastic card or sticker with your business name and telephone number on it as part of a mail-shot that you do, perhaps in the early spring
- look into becoming listed by an insurer, specialist helpline or directory as an 'approved tradesman' (most of these organisations operate a quality screening process and some will only list firms that have been trading for at least two years)
- contact local residential landlords associations to enquire about being included in their suppliers guide
The important thing is to tell people as many of the good things about your business as possible in your advertisements, particularly things that distinguish your business from your competitors.
Other ways of advertising
Your local paper may run a regular 'contact the experts' advertising feature. Remember that your vehicle can be a very effective means of advertising if you have it sign-written and keep it clean and presentable. You could consider getting a sign made up to put outside premises where you're working. It's always best to get the householder's permission before doing this though. Some plumbers keep an eye on local planning applications and send a flyer to applicants in case any who are project managing the work themselves might want to engage them.
You could also:
- distribute a fridge magnet, plastic card or sticker with your business name and telephone number on it as part of a mail-shot and whenever you get a new customer - particularly one requiring emergency repair work
- look into becoming listed by an insurer, water company, specialist helpline or directory as an 'approved tradesperson' (most of these organisations operate a quality screening process and some will only list firms that have been trading for at least two years)
- consider becoming a recognised local supplier for the National Landlords Association - lettings are often older properties needing remedial work and ongoing maintenance
Word of mouth
Word of mouth recommendations are very valuable to your business. Everyone has heard horror stories about 'cowboy' tradesmen who bodge jobs and swindle their customers - and they want to be sure that you're not going to do the same to them. You will have to earn your reputation through good, reliable workmanship - but even small things like politeness and considerateness can pay big dividends. Make sure that any staff you employ are good ambassadors for your business too.
Buy an existing business
You might decide to buy an existing farm supply business rather than start your own venture from scratch. Buying a going concern can mean that the products, customers, regular sales, staff, premises and equipment are already in place.
But buying a business can be a hazardous, expensive process unless you have the right skills and experience on your team, including legal and financial know-how. Establish the genuine trading and financial position, so that the price you pay for the business is not too high.
