Plumbing business – StartupSmart
The plumbing industry in Australia has cashed in on the growth of our cities and now covers a wide range of services. For example, many small plumbing businesses are involved in manufacturing items, such as water tanks.
The modern plumber has to be in tune with consumers’ concerns regarding water sustainability and energy efficiency, which means industry training is always being updated.
So could you cut it in the plumbing business? StartupSmart spoke to some industry players to find out what it takes.
What is it and who is it suited to?
The Plumbing Industry Commission defines plumbing work as any of the following: water supply, gas fitting, sanitary, storm water roofing, drainage, mechanical services, fire protection, and non-agricultural irrigation.
Employment in the industry is generally through an apprenticeship, and it’s assumed that anyone starting a plumbing business has worked in the industry.
If you don’t have any plumbing experience, you need to find a business partner or recruit a key staff member who does.
You will need to be someone who copes well in stressful situations and is happy to get their hands dirty – literally. You’ll also need to be good with people as the job involves a lot of face-to-face contact with customers, particularly if you’re making house calls.
You want people to feel comfortable having you in their home so that they call you again in the future and pass your details onto their friends and family.
On top of all the industry-specific skills you’ll need, there’s also the general business acumen required to make a success of any commercial venture. You may be able to fit a boiler but if you can’t balance the books or manage your staff, your venture won’t get very far.
Rules and regulations
In general, all plumbing work must be either carried out or supervised by a licensed plumbing practitioner.
Licensed practitioners have demonstrated adequate qualifications and experience, and have an appropriate level of insurance cover.
Licensed practitioners must self-certify that their plumbing work complies with all relevant regulations, standards and codes. Generally, a licensed practitioner does this by issuing a compliance certificate to the consumer of the work.
According to the Master Plumbers’ and Mechanical Services Association of Australia, operating a plumbing business means employers must be up to scratch on the following:
- Awards.
- Pay rates and allowances.
- Annual leave calculation for plumbers.
- National employment standards.
- Industrial relations news.
Research and competition
It’s important to note that a lot of plumbers make a bad name for themselves by turning up late to jobs and leaving them uncompleted or done poorly, so this is a stigma you will have to work hard to distance yourself from.
Offering great customer service can save you a huge amount on your marketing budget. Word-of-mouth is what will give you far better return on investment than a full page advertisement in a business directory.
Another draw card for many customers looking for a plumber is the knowledge that the person they’re hiring belongs to a reputable trade organisation.
The MPMSAA is a registered training organisation, providing education and training services to the building and construction industry.
The association’s ongoing training and professional development program encourages members to update their knowledge and keep abreast of technology from both a technical point of view and a business perspective.
“We believe that a skilled and capable workforce is achieved by providing up-to-date training. Our commitment to training is evident in the extensive range of training courses we offer. These include environmental training, specialist industry programs and OHS courses,” the MPMSAA says.
Costs and earnings
Starting a plumbing business needn’t involve large amounts of upfront cash. If you’ve worked in the industry, you’ve probably built up a useful collection of tools, and most plumbers you hire will come with their own equipment too.
One thing you won’t be able to skimp on however is a vehicle. You’ll need a reliable mode of transport to get to your jobs and a while secondhand vehicle makes sense moneywise, you’ll need to spend enough to ensure it’s not breaking down every other day.
During the early stage of your business, think carefully about the type of jobs you take on. Long-term projects such as bathroom fittings, which take weeks of work, may give you a nice lump sum of cash but if you’re not being paid until the job is finished, how will that affect cashflow?
Emergency callout jobs, where you invoice and receive payment on the spot, can be a much steadier form of income during the early days.
Setting your prices should involve a degree of research of your competitors’ pricing but it’s not a good idea to base your pricing model on undercutting everyone else.
With regard to earnings, you’ve got to remember that you need to deduct all your business running costs such as petrol, vehicle maintenance, advertising etc.
Victoria-based plumber Daniel Lanting says the owner of a plumbing business can expect to take home around $70,000 in the first year of operation.
An average day
As a small business, it would be wise to specialise in one or two industry categories in order to provide a better service, invest in high quality equipment and structure your days more clearly.
In addition to attracting and completing work, the owner of the business – or a suitably skilled staff member – needs to answer calls, arrange appointments and take care of the books.
Useful contacts
Master Plumbers’ and Mechanical Services Association of Australia
03 9329 9622 or 1800 133 871
Plumbing Industry Commission
1300 815 127
Australian Government Small Business Support Line
1800 777 275