There comes a point in life where you begin to question if you want to spend the rest of your days working under someone, or strike out on your own to be your own boss. Compared to working for someone else, owning a plumbing business grants you freedom, flexibility, and most importantly, autonomy. Starting a plumbing business is your first step toward achieving that goal. Before starting a business, you'll likely be asking yourself questions like "Am I going to be able to support myself or my family financially during this startup period?" "How long will it take for my business to make money?" or "How much should I be paying myself or my employees during this time?", all of which are valid questions that need to be considered. Below, we take a dive into understanding a Plumbing Business Owner's salary, how to set your business up for profitability, and the role that revenue plays in salaries and profits.
Your salary as a plumbing business owner will vary widely depending on the success of your business. However a great baseline to use is the national averages for plumbing salaries. During 2020, the average plumber's salary was just over $56,000 annually, with the top 10% earning nearly $100,000 annually. The best paying states for plumbers include:
The job outlook for employment for plumbers is projected to grow by four percent between 2019 and 2029, great news! There are several industries helping drive demand for plumbing professionals, include building construction, maintenance, and repair. The world will always need plumbers!
Creating a profitable business is definitely challenging, but not impossible. It starts with understanding that your business receives a profit if your revenues are higher than your expenses. It's not uncommon for service business owners to feel frustrated when trying to navigate advanced accounting topics, such as depreciation of supplies and equipment. However, nine times out of ten if you live by the golden rule of consistently spending less than what your company brings in, you'll see a profit.
Running a profitable businesses means you can't just say "let's see if this price works," or adjust pricing on the fly. Plumbing business owners must determine if they want to charge for time and materials or a flat rate, which means it's important to develop a solid pricing formula. Before developing a pricing formula, start by determining how much you must spend for expenses and remain competitive. Here's an example formula you can follow for pricing plumbing jobs:
Calculating your company's overhead expenses means including costs for advertising, keeping the lights on, maintaining equipment, and more. Start by adding up these expenses, and then add a percentage – like 30%, for example – for your profit margin. So, if you want to earn $40 per hour, the formula looks like this:
Now, does that percentage cover your expenses and create a profit? If not, look at the formula again and add another 25%. So, you're adding the total from the formula above to your hourly rate. Then you're multiplying that total by 25%. The formulas look like this:
When it's all said and done, you'll charge $65 per hour to your client to ensure you have enough to cover overhead expenses while simultaneously generating profits.
Instead of thinking that it would be nice to make a profit someday, shift your mindset to managing your business for profitability. This is where learning how revenue plays a role in salary and profits comes in. Get started by:
As you make changes to your business to prioritize budget goals, you can expect your team to notice this shift. For example, they might wonder why there are changes regarding expectations. Be sure to hold a team meeting to discuss your vision for the future, and ensure they understand this new focus. That vision should include positive changes for employees in addition to growing profits.
It can be challenging to operate a service business. However, this challenge doesn't have to be the case with FieldPulse. Using FieldPulse's business management app, you can create invoices, organize client information, schedule jobs, and more. As a result, it's easy to conduct business on the go without having to manage a ton of paperwork. Learn how FieldPulse can save you money and time by scheduling a free demo today.