Creating Your Plumbing Business Plan: Your Roadmap to Success

The first step in launching any type of business is drafting a business plan. This is an extensive document that details your business’ goals, mission, strategies, financial planning and projections, and more. Developing a business plan doesn’t happen overnight. It requires extensive research and planning to create a roadmap for launching and growing your plumbing business. 

What Is a Business Plan? 

A business plan for a plumbing company is a comprehensive, living document that includes local market analysis, strategies for operating your business and distinguishing it from competitors, financial projections, organizational mapping, and all the other essential details required to effectively run your business. (1) This should not be a static document. It's important to continually assess and revise your plan over time as you reach specific goals and benchmarks that indicate your business is ready to grow to the next level. 

Why Do You Need a Business Plan? 

The plumbing market has low barriers to entry with a highly fragmented market share concentration. The top four plumbing companies in the U.S. generate less than 40% of industry revenue. (2) That means the market is accessible for small business owners but likely to have plenty of local competition.

That's why it's important to lay the foundation for success with a well-written and researched business plan. Your plan should clearly outline your goals, strategies for excelling over the local competition, potential risks, and strategies to minimize risks and potential liabilities.

Not only will having a business plan help you navigate the complexities of launching a business, but it will also help you secure funding from investors and lenders. Any investor, lender, or parent company will want to see that your plumbing business has potential for success. 

What Should You Include in Your Business Plan? 

Business plans for plumbing companies should include several key sections, which we outline below. Your business plan should be thorough, but it shouldn't include any filler or unnecessary details. Focus on providing hard facts and visual data. (3) 

• Executive Summary – The executive summary of your business plan should be featured front and center, but it will probably be the last section you actually write. This summary should boil down the essentials of your plumbing business plan and include a mission statement, proposed concept, an overview of costs, and a projected return on investments.
• Company Overview – Your company overview should offer a complete description of your plumbing company, including the name, location, contact information, and leadership. It should also outline the legal structure of your business. Finally, you’ll want to have a brief breakdown of the objectives for your business and the key performance indicators (KPIs) you’ll use to measure success in achieving those objectives. Your company overview should clearly identify your business’ strengths and strategies that will differentiate you from competitors.
• Market Analysis – The industry and market analysis section of your business plan will require the most research, as well as regular ongoing assessment. You’ll need to identify your target customers, top competitors in your area, the market size of your area, and the market share your business currently holds or that you hope to claim.
• Financial Plan – Your financial plan should include startup costs, projected monthly operating expenses, and a revenue forecast. This section should be assessed and updated every year to create a 12-month profit-and-loss projection, cash-flow projection, and break-even calculation. Annual review is also important for reevaluating material and vendor costs. 
• Organizational Structure – Your plumbing business plan should feature detailed job descriptions for every employee at your business, as well as an organizational structure detailing company leadership roles. You will also want to include the resumes and responsibilities of key team members, along with qualifications, licenses, and permits.
• Operations Plan – This is where you will break down the day-to-day operations of the business with an overview of workflow processes, equipment and tools needed to complete jobs, suppliers, services, and service areas. 

Which KPIs Should You Use to Track Your Plumbing Business' Success? 

Your business plan should include several KPIs that you use to measure your business’ success and identify any potential areas for growth or improvement. (4) Some common KPIs for plumbing businesses include: 

• Gross margins (total sales revenue minus total operations costs)
• Customer satisfaction (reviews, surveys, referrals, etc.)
• Average revenue per service call or project
• Material and equipment cost percentage
• Lead turnover percentage 

Signs You're Ready to Scale Up Your Plumbing Business

Your plumbing business plan should account for future growth, but the timing of that growth will depend on how your business is performing in current market and economic conditions. (5) It’s important to recognize some key signs that you’re ready to scale up your business: 

• Your schedule is fully booked and you’re turning away leads.
• A local competitor has left the market.
• You are ready to expand your service offerings.
• You’ve seen consistent growth in your annual revenue.
• Your business is currently running smoothly with high rates of customer satisfaction. 

How to Grow Your Plumbing Business

Growing your plumbing business involves several steps, including hiring new technicians, expanding your fleet of company vehicles, increasing contracts with current suppliers or seeking new ones, increasing your marketing budget, and expanding your service area. (6) Depending on how much and where you’re expanding, you may even add a second location for your business. You may also be ready to automate or outsource certain processes and workflows to streamline daily operations and make the most of the resources you already have available. 

Related: A Complete Guide to Growing Your Plumbing Business

Partner with P3 Services to Get the Support & Resources You Need for Success

Scaling your plumbing business is a complex process that will look different for every company. If you're ready to grow your business and become a market leader in your area, consider joining the P3 Services family. Our nationwide network of plumbing, mechanical, and electrical experts is constantly growing.

As a P3 partner company, you'll retain the trusted local branding of your business and be able to focus on growing your core business as you receive guidance, leadership, and support from our organization. We help our partner companies reach the next level by providing financial and logistical support, resources for technician recruiting and training, and longtime partnerships with commercial suppliers and vendors. 

Interested in learning more? Reach out to our team today.

1. Pro Business Plans, Plumbing Business Plan: The Ultimate Guide for 2024 https://pro-business-plans.medium.com/plumbing-business-plan-the-ultimate-guide-for-2023-b91f96dfb97b
2. IBIS World, Plumbers in the US – Market Size, Industry Analysis, Trends, and Forecasts (2024-2029) https://www.ibisworld.com/united-states/market-research-reports/plumbers-industry/#IndustryStatisticsAndTrends
3. ServiceTitan, What to Include in a Plumbing Business Plan [& Free Template] https://www.servicetitan.com/templates/plumbing/business-plan
4. Plumbing Web Masters, 6 KPIs for Plumbers in 2024, https://www.plumbingwebmasters.com/plumbing-kpi/ 
5.  ServiceTitan, How to Grow Your Plumbing Business in 2024 | The Ultimate Guide https://www.servicetitan.com/blog/how-to-grow-your-plumbing-business
6. Oscar Collins, 4 Critical Considerations When Scaling a Plumbing Business https://www.contractormag.com/management/best-practices/article/21267374/4-critical-considerations-when-scaling-a-plumbing-business