Plumbing Business Setup

• Business structure decision framework (LLC vs. sole prop vs. S-Corp — non-legal framing)
• State formation coordination checklist with step-by-step filing guidance
• EIN acquisition walkthrough and documentation
• Business banking setup — account types, separation requirements, initial funding
• Payment acceptance setup — credit cards, ACH, checks for residential and commercial

• QuickBooks Online setup with plumbing-specific chart of accounts (not the default template)
• Income categories: service/repair, new construction, remodel, drain cleaning, water heater
• Job costing enabled — per-job tracking for construction, batched for service calls
• Expense categorization: materials, fittings, fixtures, labor, subs, supply house accounts
• Invoicing structure: standard terms, deposit requirements, progress billing for construction
• AR aging tracker and weekly cash review habit installed

• Weekly owner meeting agenda (15–30 min — revenue, margins, cash, pipeline review)
• Simple KPI scoreboard: Revenue / Service Margin / Construction Margin / Cash Position
• Role clarity one-pager for each active role (field tech, apprentice, office, owner-operator)
• One SOP template per critical process identified during engagement
• 90-day maintenance guide — what to review weekly and monthly
• Handoff package: complete documentation, all credentials organized

What business structure is best for a plumbing company?

Most new plumbing companies start as a single-member LLC. An LLC provides personal liability protection — important when you're working in homes, dealing with water damage risk, and handling projects where something going wrong could be very expensive. Multi-member LLCs with a proper operating agreement are the standard for partnerships. S-Corp election can reduce self-employment taxes once revenue grows — your CPA should run the numbers for your specific situation.

How do I set up QuickBooks for a plumbing business?

Start with QuickBooks Online Plus (needed for Projects/job costing). Replace the default chart of accounts with plumbing-specific categories: Income split by service type (new construction, service/repair, remodel, drain cleaning, water heater), COGS broken into materials (pipe, fittings, fixtures), labor, and subcontractors. Overhead stays separate — trucks, tools, insurance, office. Enable Projects for per-job tracking on larger jobs. The default QuickBooks chart of accounts has none of this.

What licenses do I need to start a plumbing business?

Plumbing is one of the most heavily licensed trades. Most states require a master plumber's license to operate a plumbing business (typically requiring a journeyman license plus years of experience and passing a master's exam). Many municipalities require additional local permits and business licenses. Some states have tiered licensing: apprentice, journeyman, master, contractor. Check your state plumbing board for specific requirements. Licensing is outside our scope — we handle the business foundation.

How do I price plumbing jobs to actually make money?

You need to know three numbers: your true cost per hour (labor + vehicle + insurance + overhead), your material markup, and your target margin. Most plumbing companies that undercharge aren't bad at pricing — they just don't know their real costs because their books aren't set up to show them. A proper bookkeeping setup that separates job costs from overhead and tracks per-job profitability is the prerequisite. Without it, pricing is guesswork.

Should I focus on service calls or new construction?

Both have different margin profiles and cash flow patterns. Service/repair typically has higher margins but less predictable volume. New construction has steadier pipeline but tighter margins, longer payment cycles, and retainage. Most successful plumbing companies do both and use service revenue to smooth cash flow between construction draws. Your bookkeeping needs to track them separately so you can see the real margin on each — that's what drives the decision.

How do I track inventory and materials for plumbing jobs?

For most plumbing companies under $2M, full inventory management software isn't necessary. What matters: (1) track material costs per job in QuickBooks by coding purchases to the correct project, (2) establish a standard markup on materials (typically 15–30% for residential), (3) reconcile your supply house statements monthly. If you're buying from supply houses on account, those purchases need to go into QuickBooks by job. We set up the expense coding rules as part of the bookkeeping phase.

How much does it cost to start a plumbing business?

Beyond licensing and tools: LLC formation ($50–$500 depending on state), EIN (free), business insurance ($2,500–$6,000/year for GL + vehicle + workers' comp), business bank account (varies), QuickBooks ($80–$100/month), and vehicle/van setup if needed. Total business infrastructure: $3,500–$9,000 in year one. The Foundation Install covers entity, banking, and bookkeeping setup — the infrastructure you need before you quote your first job as a business owner.

What's the biggest mistake plumbing companies make when starting out?

Running the business out of a personal bank account and treating every payment as personal income. The plumber does great work, collects $15K in a month, spends it, and then gets hit with a $4K tax bill they didn't plan for. No financial separation means no visibility into actual profit, no liability protection from the LLC, and no ability to plan for taxes, slow months, or equipment purchases. Set up the financial foundation before you take the first job.

How long does it take to set up a plumbing business properly?

DIY, expect 6–10 weeks: state LLC filing (1–4 weeks), bank account setup (a few days), QuickBooks configuration (hours if you know plumbing accounting, weeks if you're learning), insurance quotes and binding (1–2 weeks). Our Foundation Install compresses the business infrastructure — entity through operating cadence — into 21 days. Licensing and insurance are separate tracks that run in parallel.