With roughly 129,000 existing plumbing businesses, the US plumbing industry is projected to generate over $208 billion in revenue by the end of 2026. Starting a plumbing business requires a license, insurance, a business structure that protects your personal assets, and a way to get paid promptly between jobs.

Below, we’ll cover what licensing and insurance you'll need before taking your first job, how much it costs to start a plumbing business, and how to land your first customers.

Key takeaways

• Licensing requirements and hour thresholds vary by state. Plumbers need to confirm both trade and local contractor rules before bidding on work.

• Many plumbing companies with employees or larger contracts register as a limited liability company (LLC) to separate personal assets from business liability.

• Getting paid on-site or through clear invoicing schedules is important for a new plumbing company’s cash flow.

What do you need before starting a plumbing business?

Before anything else, you need to sort out licensing. To earn your license, you typically work as an apprentice or journeyman for several years, log a set number of hours under a licensed plumber, then sit for a state exam. Exact requirements vary by state.

Beyond a license, you’ll also need:

• General liability insurance: Many contracts and permits require it before you can bid on a job.

• Workers’ compensation: This is required the moment you hire anyone, even part-time.

• Surety bond: Many states require this to protect clients if you don’t finish a job or damage their property.

• Local contractor registration: Some municipalities require this on top of your state trade license, so check both before taking your first paid job.

You’ll also need to decide what kind of plumbing company you’re building. Residential service calls, new construction, commercial maintenance contracts, and emergency or after-hours work all draw different customers and require different pricing.

How do you register a plumbing business?

The first step in registering a plumbing business is deciding on a business structure. Many new plumbing companies choose among a sole proprietorship, an LLC, or an S corp. The right one depends on how much liability protection and tax flexibility you need.

Here’s how business types compare:

• Sole proprietorship: This is the default if you choose not to file a different specific structure. There’s no separate entity and no extra filing, but also no protection. If a customer sues over water damage from a botched job, your personal assets are at risk.

• LLC: This separates your personal finances from the business. If the company gets sued or can’t pay a supplier, your house and personal savings are generally protected. For this reason, many plumbing companies with employees or larger contracts register as an LLC.

• S corp: Some owners choose this tax election once revenue climbs since it can change how you’re taxed on self-employment income. It’s a good idea to check with an accountant first since this structure comes with payroll and filing requirements an LLC doesn’t have.

Once you’ve chosen a structure, take the following steps:

1. Register with the state: File articles of organization for an LLC, or file incorporation documents for an S corp, with your secretary of state. That usually costs between $50 and $500, depending on the state.

2. Get an Employer Identification Number (EIN): This federal tax ID lets you open a business bank account, hire employees, and file business taxes separately from your personal return. You can file for an EIN for free through the Internal Revenue Service (IRS).

3. Open a business bank account: Keep plumbing income and expenses separate from your personal account. This matters for both liability protection and bookkeeping at tax time.

A solution such as Stripe Atlas can handle the incorporation and EIN steps for founders forming a Delaware company.

How much does it cost to start a plumbing business?

Costs vary depending on whether you’re already a licensed plumber with your own tools or starting from scratch.

You’ll typically incur the following expenses:

• Tools and equipment: A full set of hand tools, pipe threaders, drain snakes, and diagnostic equipment such as a camera inspection system can cost from around $3,000 to $10,000 or more, depending on how much you already own from your apprenticeship years and whether you plan to buy everything new.

• Service vehicle: A used cargo van outfitted with shelving and a ladder rack can cost anywhere from a few thousand dollars to around $25,000; a new one with custom racking can cost well over $50,000.

• Insurance and bonding: General liability insurance for plumbing companies is $1,768 annually on average, but it can go much higher. A surety bond can add around $100 or more per year depending on the bond amount your state requires.

• Licensing and permits: State license fees, local contractor registration, and permit costs for individual jobs add up to a few hundred to a couple thousand dollars in your first year.

• Software and admin tools: Scheduling, invoicing, and accounting software typically cost $50 to $300 a month combined, depending on how many of these you bundle into one platform.

• Initial marketing: A Google Business Profile is free to set up, but new plumbing companies could spend anywhere from $500 to around $5,000 for a basic website and local search ads to start getting calls.

How do you get your first customers as a new plumbing business?

You win your first customers mostly through local visibility: a strong Google Business Profile, online reviews, local search listings, and referrals.

Here’s how these channels work to land you new customers:

• Google Business Profile: This is where many local plumbing searches end up. A complete profile with photos, service areas, and hours matters more for local ranking than almost anything else you’ll do in your first year.

• Reviews: Asking every satisfied customer for a review, ideally right after the job while the experience is fresh, builds the review count that both customers and Google’s local algorithm weigh heavily.

• Local search and directories: Claiming listings on sites customers actually search, and making sure your name, address, and phone number match across all of them, keeps your local search ranking from weakening.

• Referral networks: Relationships with real estate agents, property managers, and general contractors tend to produce steadier work than paid ads once you’ve built a track record.

How do you set up operations and on-site payments for your plumbing business?

Running jobs efficiently depends on a few connected systems: scheduling, dispatch, equipment tracking, and how you get paid. Scheduling software that lets customers book online and gives you a dispatch view of every technician’s day cuts down on the back-and-forth calls that reduce billable hours. Equipment tracking matters, too, since a missing pipe threader or a truck that runs low on parts mid-job costs you a return trip and an unhappy customer.

Payment is where a lot of plumbing companies still lose time. A tool such as Stripe Terminal lets a technician take a card payment on-site the moment a job is done, through a card reader that connects to a phone or tablet. That way, the invoice is closed out before the technician leaves the site.

What are some common pitfalls when starting a plumbing business?

A few mistakes appear repeatedly in plumbing startups, and many of them are avoidable.

Look out for the following:

• Underpricing jobs: New owners often price based on what they charged as an employee and forget to include overhead, insurance, and vehicle costs. That leaves the business running at a loss even when they have plenty of work.

• Mixing personal and business finances: Running the company out of a personal checking account makes bookkeeping a challenge at tax time. It also undermines the liability protection an LLC is supposed to provide.

• Letting licensing or insurance lapse: A missed renewal on a license or bond can void a contract or get a job shut down mid-project. It’s an easy thing to lose track of once you’re busy running jobs.

• Scaling before systems are in place: Hiring a second or third technician before scheduling, dispatch, and invoicing are set up creates chaos that’s harder to fix once you’re managing people.

• Underestimating startup cash flow: Slow months happen even with strong reviews and a full pipeline. A company without a few months of reserves can run short on cash during a single slow period, or when a commercial client pays late.

How Stripe Atlas can help

Stripe Atlas handles everything you need to legally launch your company—incorporation, employer identification number (EIN), equity setup, and tax filings—so you can fundraise, open a bank account, and start accepting payments in as little as two business days, from anywhere in the world.

Join 100,000+ startups incorporated using Atlas, including startups backed by top investors like Y Combinator, a16z, and General Catalyst.

Get started in minutes with Atlas

The application takes under 10 minutes. You’ll choose your company structure, confirm your name is available, add up to four cofounders, set your equity split, and e-sign. Then Atlas takes it from there, including notifying cofounders to sign their documents electronically.

Banking and payments before your EIN arrives

Atlas files your EIN application automatically after incorporation. You don’t have to wait—Atlas enables pre-EIN payments and banking so you can start accepting payments and making transactions right away. US founders with a Social Security number are typically eligible for expedited IRS processing.

Automatic 83(b) tax election filing

Atlas files your 83(b) election for you—US and non-US founders alike—with US Postal Service certified mail and tracking to reduce personal income taxes. You’ll get a signed 83(b) election and proof of filing directly in your Stripe Dashboard, with certified mail confirmation.

World-class company legal documents

Atlas provides all the legal documents you need to start running your company, drafted by Cooley, one of the world’s leading venture capital law firms, and stores them directly in your Stripe Dashboard. These documents are designed to help you fundraise immediately and ensure your company is legally protected, covering aspects like ownership structure, equity distribution, and tax compliance.

$2,500 in Stripe credits, plus $50K+ in partner discounts

Atlas startups get $2,500 in Stripe product credits for their first year, plus $50,000+ in discounts on essential tools—Mercury, AWS, Carta, Xero, Perplexity, and more. Delaware registered agent service is also included free for your first year.

Learn more about how Atlas can help you set up your new business quickly and easily, and get started today.

FAQs about how to start a plumbing business