How to start a plumbing business
Want to know how to become a plumber? Read our guide for a direct pipeline to plumbing success
Useful steps to think about when becoming a plumber are:
What is it and who is becoming a plumber suited to?
The plumbing industry has become somewhat of a sexy career option over the last decade. Fuelled by press coverage of demand for plumbers outstripping supply, and countless case studies of the ‘city-professional turned tradesman', the industry has taken on a new lease of life. Far from the image of a guy in overalls with his head under a kitchen sink, the industry is an incredibly varied one.
Specialist areas range from emergency repairs and bathroom installations and to fitting energy efficient and alternative fuel sources.
There are approximately 120,000 registered plumbing and heating engineers in the UK, and while the market may lean more towards emergency call-out work than extravagant water installations during times of economic crises, the fact remains that people will always need plumbers. So if you've got a solid proposition, a strong work ethic and don't mind getting your hands dirty there's no reason you can't make a success of a plumbing business even in the midst of a recession.
Well ideally this is a business suited to plumbers, and if you're not one already you're facing an uphill struggle to set up in the industry. This is not the kind of business anyone can run. You need plumbing experience, or if you don't have it yourself, you need to involve a partner or key member of staff that does. William Davies set up Aspect Maintenance after working for an investment bank for several years. He didn't have plumbing experience himself so he brought on board Nick Bizley, who'd spent all his working life in the industry, as his partner. So while it's not essential to have gone down the typical apprenticeship route you do need to be aware of your own limitations and surround yourself with staff that can compensate for the skills you don't have.
Blane Judd, chief executive of the Chartered Institute for Plumbing and Heating Engineers (CIPHE) advises that it's best to work for an established plumbing business for at least 2-3 years after qualifying before you set up your own venture.
In terms of the type of people that choose a career in plumbing, there's been quite a shift in the last decade. University graduates and women seem to be the case study of choice for journalists focusing on the new-found appeal of the industry. While background, gender or educational history doesn't seem to be of relevance anymore there are a few personality traits you'll need to make a success of this kind of business.
For a start you'll need to be someone that copes well in stressful situations. You'll need to be happy to get your hands, and clothes, thoroughly mucky and be keen to do a lot of hard physical labour. You'll also need to be good with people. The job will involve direct face-to-face contact with your customers so a sunny disposition is a must if you want them to call you back next time they need a plumber.
Charlie Mullins, founder of Pimlico Plumbers, says the industry is far more computerised today than it was when he set up his firm 30 years ago. “It's a more in depth and harder job now. Years ago people that weren't very academic went into the industry but it's not like that anymore.”
On top of all the industry specific skills and qualities 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 make it off the starting blocks.
A plumbing business model
Before you start making decisions on the colour scheme of your van or what your company logo will look like you need to establish what kind of plumbing business you want to run. As mentioned above, it's an extremely varied industry and there's scope for specialising in a number of areas.
Your chosen business model must reflect the demand for services in the area you intend to operate in. Look at the competition in the area and see what other plumbers are doing. Is your local market flooded with emergency call-out businesses? If so, perhaps you need to diversify your offering and specialise in fittings and alternations, or the installation of green energy technologies.
The introduction of newer energy sources such as solar thermal and air or ground source heat pumps have provided a whole new area for plumbers to make their mark in. Blane Judd of the CIPHE believes the ‘plumber of tomorrow' will need to have a working knowledge of these kind of fossil fuel alternatives.
Be warned though. In times of recession you'll find the most stable market is in repairs and call-outs. If people are finding it harder to take out loans they may not be able to access the cash needed for higher priced jobs. Likewise, a brand new bathroom may seem a bit extravagant in times of recession. Burst pipes and repairs will always need attending to though – recession or not.
When William Davies started Aspect Maintenance he made good use of his business partner's industry knowledge. “I wouldn't have got into this if Nick hadn't been involved in the sector for some time. He was able to discuss the driving forces behind the industry with me, so we came to the table with a lot of knowledge which allowed us to put together a solid business plan.”
Davies and Bizley made a conscious decision to focus on both the commercial and domestic markets but this is a decision you should consider carefully. If you're offering your services to businesses as well as domestic customers think about how this will affect the minimum staff and resources you require.
Consider too whether you can reasonably make enough money if operating on your own. This may be a safer way to keep your overheads down but will it give you the rate of growth you're after?
“Most plumbing firms are set up by individuals qualified in the industry who gradually take on a couple of other plumbers,” says Davies. “I came from a business background and looked at the venture from the point of view of structuring a decent sized venture. I wanted the tradesman to be left to do their jobs but have a great admin back-end which would make the whole process run smoothly.”
Rules and regulations of the plumbing industry
At present you do not need a licence to operate as a general plumber but there are some important exceptions to take note of. If you are dealing with any kind of gas appliance, which includes boilers, cookers or gas heaters, then you must be on the Gas Safe Register (known as CORGI until April 2009). It is illegal to carry out any work involving gas appliances without the appropriate training and certification.
You also need to have thorough working knowledge of the Water Regulations and Building Regulations in the UK. And while you don't need a licence to fix a leaky tap or install a toilet, any plumber worth their salt will have been properly trained with appropriate qualifications under their belt.
The CIPHE does not recognise anyone as a member unless they are qualified to at least NVQ Level 2 standard. The NVQ qualification is a mixture of practical and theory work and most colleges require at least a grade C in Maths and Science GCSE's to enrol you. A level 3 NVQ qualification will cover the profession to a higher standard and is the recommended level to reach before thinking about starting your own venture.
However, it's important to make sure your training provider is a reputable one, and that the qualification they're offering is recognised by the industry. “There are a whole series of people out there offering short courses that purport to turn you into a plumber in a very short period of time, but the industry doesn't collectively recognise that as qualifying,” warns Blane Judd of the CIPHE. Judd also recommends taking courses in water fitting regulations from reputable training suppliers such as BPEC.
For work involving solid fuel and oil appliances you should seek accreditation from HETAS and OFTEC. It's also important you receive appropriate training for any work carried out on newer ‘green' technologies such as solar thermal and air or ground source heat pumps. Training for these kind of installations can often be obtained through the manufacturers of the technology themselves.
You must make sure you have the appropriate public and product liability insurance to protect you against any claims that may arise from damage or injury during the course of a job. If you employ any other staff you'll need employers' liability insurance too.
Another important regulation to remember is that you must be VAT registered if your turnover is over the threshold. Check here to see if you're likely to need to register.
You should also be aware of HMRC's Construction Industry Scheme (CIS) which governs the handling of payments for anyone working in the construction industry. For more information on how this could affect your plumbing business click here
Gaining experience as a plumber
The traditional route once you've gained your industry recognised qualifications is to work as an apprentice with another plumber or maintenance company. It's a route that Pimlico Plumbers' Charlie Mullins took when he left school at the age of 15, and one that he still highly recommends today. “My apprenticeship lasted four years and by the time I'd finished it I'd already built up a small client base and was able to become self-employed straight away.”
The college where you do your industry qualifications can often help you find a placement with a local company, but there's nothing stopping you getting in touch with other plumbing company's yourself. It's unlikely you'll earn much during your apprenticeship but the experience you'll gain working with fully qualified and seasoned plumbers will prove invaluable when you start your own venture.
Blane Judd of the CIPHE recommends at least 2-3 years working with an experienced plumber before you attempt your own venture. In fact, those wishing to join the organisation, even at the lowest level, need evidence of this length of service after completing their qualifications.
Judd explains: “It's like when you pass your driving test, and the examiner hands you your certificate and says: ‘now's when you really learn to drive'.”
The main idea to get your head around is that customers won't accept trial and error when you're working on their property. Your time at college won't prepare you for all the situations you're likely to encounter while actually on the job. And while even the most experienced of plumbers will sometimes find themselves in unfamiliar and pressured circumstances, learning the ropes while there's someone else to guide you is always going to be preferable to throwing yourself in at the deep end straight away.
Building a reputation for your plumbing business
There's no getting away from the fact that plumbers have a bad name. Stereotypes of messy, unpunctual tradesmen who turn up late and leave the job half done are common and it's a reputation you'll have to work hard to distance your own venture from. However, it is possible to build a solid and reliable reputation.
“Our growth was built on quality of service and if you drop that, you've got nothing,” says Charlie Mullins of Pimlico Plumbers. “It takes a long time to build up a name but you can lose it overnight.”
Mullins issues all his staff a Pimlico Bible which lays out everything from how they must present themselves to how clean their van should be and what time they turn up for a job. If staff can't abide by the book, they don't last long at Pimlico.
Complaints are also dealt with swiftly with the same engineer almost always sent back to rectify the problem. Mullins believes if you handle a complaint correctly it can often turn into further work. “We want to be seen as the John Lewis of the plumbing industry where if you're not satisfied you get your money back. Retaining customers is more important than getting new ones.”
William Davies of Aspect Maintenance also decided his business would need to focus heavily on customer service from the outset. “We saw that it was an underserviced marketplace and if you ask anyone they'll tell you they've had problems with maintenance companies at some stage.”
Offering great customer service can also save you a huge amount on your marketing spend. Word of mouth is will give you far better return on investment than a full page ad in a business directory.
Davies says he didn't do much in the way of advertising when he started Aspect Maintenance but instead relied on the client base his partner Nick was already familiar with. It was only once the company was more established that he started spending cash on branding and advertising to the general public.
Mullins says the Pimlico vans with their prominent logos and personalised number plates are the biggest advertising tool the company has by far. “We have 120 on the road. They're very recognisable and seen all over London.”
Another pull for many customers looking for a plumber is the knowledge that the person they're hiring belongs to reputable trade organisation. Being a member of the CIPHE can add credibility to your business. The process involves having your qualifications and experience checked by the organisation, and sticking to a set of working standards which are enforced by a committee. Plumbers that are found to be lacking in these standards are removed from the register.
Costs and budgeting as a plumber
Starting a plumbing business needn't involve large amounts of upfront cash being spent. If you've done an apprenticeship you may have already 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 scrimp on however is a vehicle. You'll need a reliable mode of transportation to get to your jobs and while second-hand makes business sense you'll need to spend enough to ensure it's not breaking down every other day.
The average self-employed plumber earns £30-40,000 a year. That's not to say the rumours about plumbers clearing an annual £70,000 are completely false, but you'd probably have to be working 12-hour days, six days a week to manage it. You've got to remember that from your earnings you need to deduct all your business running costs such as petrol, vehicle maintenance, advertising etc.
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 some of cash but if you're not being paid until the job is finished how will that affect cashflow? Emergency call-out jobs, where you invoice and receive payment on the spot, can be a much steadier form of income during the early days.
“It's easier from a funding perspective to focus on emergency work,” says William Davies of Aspect Maintenance. “It has better margins and you get paid straight away. But even though larger jobs have lower margins they offer more long-term security, so there's attractions to both types of work.”
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. “If you're a small operation that trades in a small area then the main thing is to keep your service levels up,” says Davies. “In this sector price is quite inelastic – whether you charge £60 or £80 for a call out isn't what makes the difference. Pricing your service as cheaply as possible won't have as much benefit as making sure the service quality is consistently good.”
Consistent service is also what will you see you through difficult economic climates according to Charlie Mullins of Pimlico Plumbers. “You've got to raise your game to stay ahead of the game,” he says. “Get your response times up and improve your customer service and you'll get through the recession.”
Useful contacts for your business
- British Plumbing Employers' Council (Training) Ltd BPEC www.bpec.org.uk
- The Learning and Skills Council www.lsc.gov.uk
- Gas Safe Register (formerly the Council for Registered Gas Installers – CORGI) – www.gassaferegister.co.uk
- Institute of Domestic Heating Engineers and Environmental Engineers (IDHEE) www.idhee.org.uk
- Chartered Institute of Plumbing and Heating Engineering (CIPHE) www.iphe.org.uk
- HETAS www.hetas.co.uk
- OFTEC www.oftec.org