Starting a plumbing company

[Adam McCaig]

Hi all,

Happy new year!

Hope this is OK in this part of the forum.

Been a plumber for about 12 years now, mostly commercial stuff with some domestic and new builds here and there. Sole trader working for numerous different companies.

Been thinking that maybe it's time I started my own company rather than work for other people.

Might sound silly but I don't really know where to start.

Has anyone on here done this themselves and if so have you got any tips or advice?

Thanks

Adam

 

[Lou]

Hi Adam - it is fine to post in this forum - I am sure you will get some helpful advice when everyone is back!

 

[Murdoch]

How much cash do you have in the bank?

How would you cope with late payers?

Have you tried to work out your anticipated overheads for a year including vehicle costs?

Have you looked at how many other plumbers are in your immediate area?

Are you a GSR?

 

[Chuck]

If you don't already:

• have accountant who specialises In small business support, get one;
• trade as a limited company, discuss doing so with your accountant;
• manage cash flow and deal with debt recovery, learn how to;
• have a pension plan and exit strategy, get one so you can retire one day.

If you haven't taken a 'running your own business' course in the past, see if your local college offers one e.g. as evening classes. Draw up a business plan, which will include to addressing the points raised by @Murdoch.

In my experience there are two sustainable sizes: (a) up to three people, including an apprentice, (b) more than ten. Moving from (a) to (b) has to be done quite rapidly because overheads grow faster than income between the two models. My 'three' and 'ten' figures may not be correct in all circumstances, but I am certain that there is a danger zone between small and medium.

 

[Murdoch]

And don't under estimate how many "non paying" work you will be doing each week and make sure you allow for holidays - and bank holidays.

Rule of thumb is allow for 220 working days per year max

 

[oz-plumber]

Stipulate your payment terms and adhere to them.

Over here, working for builders, ( even domesitic work ) it has become the normal, to have payment terms 30 days from end of month.
Which means, you could work on a project for 8 weeks without payment.

Generally, you end up paying for wages and materials well in advance of receiving any money from the job.

I, now leave very limited stock on jobs and don't turn up if my payment terms aren't met.
Mine are fairly lenient, but not quite so lenient as 30 days from end of month.