Working as a plumber can be a profitable business endeavour. Across the country, there are over 90,000 plumbing professionals. Many of these plumbers work for plumbing companies. If you are looking to start your own plumbing business, you might want to know if operating a plumbing business is profitable?
Is A Plumbing Business Profitable?
The amount of profit that a plumbing business can generate depends on many factors including location, experience, and the number of competitors in the market. However, most plumbing businesses can generate between $150,000 to $250,000 per year. Plumbers typically charge an hourly rate for their services. This can range from $70 to $100 per hour but can exceed $125 per hour in major markets like Sydney.
This amount is before any taxes and expenses. After these costs, the average plumber can expect to take home about $76,000 (or $38.97 per hour). If you are just starting out, you may earn a little less until you get more experience. Entry-level plumbers usually start around $65,000 a year with experienced plumbers earning up to $95,000 per year.
Factors That Can Impact Profitability
Some industry organisations anticipate that profit margins for most plumbing projects should be around 35 to 40 percent. This is just an estimated amount. Each plumbing business is operated differently and may see more or less profit. There are some factors that plumbers can monitor to ensure the most profitability.
- Start-Up Costs - For new plumbing businesses, start-up costs can impact the first year or two of profits. The less money you spend to get the business started, the less time it will take for you to make a profit.
- Non-Work Hours - Each hour you spend working on plumbing projects for your clients is billable time. However, there are many hours needed to run the business that can’t be billed to your customers. By maximizing the number of billable hours in the week, you can increase profits.
- Rework - If work isn’t completed correctly the first time, the plumber will need to fix the issue. Additional labour and materials could reduce the profit on the job.
- Business Expenses - Costs such as accounting services, website hosting, license fees, and taxes will reduce the total profit that the company can generate. Purchasing and replacing tools and vehicles can also be a significant cost.
- Staffing - As you grow your business, you may need to hire additional employees to keep up with the workload. This is a great thing. Just make sure that they are generating enough revenue to justify the cost.
Protect Your Plumbing Business
Accidents can happen from time to time. A simple mistake such as a slippery floor can result in your client getting injured. A leaky pipe that isn’t repaired properly can cause damage to a house. These situations can result in lawsuits. At upcover, we want to help you find the best liability insurance policies to protect you. Check out our instant quote generator where you can get an estimate on market-leading insurance in seconds! Simply enter your occupation and expected revenue to get started.
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