Two centuries ago, the average lifespan in the United States was only 35 years. Fast forward 200 years later, and it has more than doubled.
Modern plumbing, according to historians, is a principal reason for that increased lifespan. After all, it gave rise to improved water treatment, sanitation, and sewage management.
It’s unsurprising then that the federal government regards plumbers as essential workers.
So, if you’ve always wanted to be a business owner, starting a new plumbing company may be an excellent choice. Since plumbing is a critical trade, you’re likely to have clients calling for your help.
The thing is, opening a plumbing business requires a significant amount of capital. Thus, being low on funds can make things challenging.
Fortunately, you can still realize your dreams of owning a plumbing company, even on a budget. This guide details what you need to do, so be sure to read on.
Check Your State’s Plumbing Licensing Laws
Whether you’re on a budget or not, you may need to get a plumber’s license before you can open a company.
A plumbing license is a document proving a professional plumber’s competence. It serves as evidence because only plumbers who’ve passed a competency exam can get it.
For that reason, many state and local governments require licensure for plumbers.
Not all states issue plumbing licenses at the state level, though. Instead, they pass this task on to local municipal governments. Some examples are Kansas, Missouri, and New York.
With that said, it’s imperative to check your state’s regulations on plumbing licensure. That way, you can determine if you need to sit for a licensing exam. If you do, take and pass that test before you think about running a plumbing business.
Apply for an SBA Loan
The Small Business Administration (SBA) is a United States federal government agency. Its primary purpose is to assist the 30+ million small businesses in the US.
One way that the SBA serves small business owners is by helping them get capital funding. To do that, the agency works with lenders all over the country. It then backs the loans underwritten by these lending institutions.
That government backing makes lenders more willing to issue loans to small businesses. However, it’s also why SBA loans have more complex application processes and requirements. Still, they’re worth it, as they often have lower interest rates than other business loans.
An SBA microloan is one of the loans that can help you start your plumbing company. The average microloan amount is $13,000, although you can borrow up to $50,000. You can then use the funds to buy plumbing supplies and equipment or as your working capital.
Consider Taking Out an Equipment Loan
Aside from an SBA loan, you can also take out a separate equipment loan. These are loans specifically for financing the purchase of equipment and machinery.
Since your business is in the plumbing industry, you can get a loan to buy water jetting machines. You can also use the funds to purchase sewer cameras, thermal devices, or even plumbing trucks or vans.
As for where to apply, check with your local banks and credit unions. Your other option is to apply with private lenders explicitly offering equipment loans.
Use a Credit Card for Smaller Ticket Items
As a professional plumber, you need at least 35 tools, such as wrenches, saws, and pliers. On top of those are consumables, including thread sealing tapes, nuts, bolts, and screws.
It’s the consumables you have to monitor constantly; otherwise, you may run out of supplies. That can then result in your failure to complete a job. If that happens, you’re sure to make your customers unhappy.
Fortunately, consumable plumbing supplies don’t cost much, but you need to stock up on them. Since you’re on a budget, one of your options is to finance your purchase with a low-interest credit card. That way, you won’t have to shell out the cash right away.
Just make sure to pay your credit cards on or before their statement due dates. In addition, pay off your balances in full, if possible. That way, you can avoid late fees and accruing interest payments.
Get a Personal Loan
Did you know that 22% of consumers in the US have an active personal loan? A large purchase, in turn, is the most common reason cited for taking out such loans.
However, many lenders don’t explicitly limit personal loans for personal use. That’s because they allow their borrowers to use the funds at their discretion. So, as a soon-to-be small business owner, you can take one out to finance the launch of your plumbing company.
Another reason to go with a personal loan is if you don’t qualify for a traditional business loan. After all, many lenders require borrowers to have owned a business for at least six or 12 months. Since you’re only starting, you may not be eligible for small business loans.
Whereas with personal loans, the primary requirement is good credit standing. That means having a credit score of at least 700 and a clean credit report. You can still qualify if you have a lower score but expect a higher interest rate.
In any case, you can use a personal loan to boost your plumbing business budget. You can then use the funds to buy the plumbing supplies and equipment you need.
If you qualify for a larger loan, consider using part of it to buy ADA-compliant fixtures. That way, you can cater to the plumbing needs of clients with disabilities. If you’d like to learn more about products that comply with the ADA, click here.
Follow These Tips for Starting a New Plumbing Company
There you have it, your comprehensive guide on starting a new plumbing company, even on a tight budget. Now that you know, it’s best to start researching your state’s laws on plumbing licensing. From there, shop around for lenders and loan offers so that you can give your business budget the boost it needs.
Are you interested in learning more about business ownership? If so, we have more tips in store for you, so feel free to check out our recent news and blog posts!
