Are you thinking about starting a new business? Septic cleaning and pumping might not be top of mind for your upstart company. However, there’s a lot of money to be made. If you’re ready, then we’ve gathered some great advice that is perfect for those who wish to venture into this vast industry. To get a good understanding of how to start, we have some helpful tips and suggestions.
A Glimpse Into the Septic Cleaning and Pumping Industry
Approximately one-third of households in the United States depend on a septic tank to remove sewage and residential water. It’s not the most inviting business concept, but it is highly profitable for entrepreneurs who fully understand the industry.
Homeowners typically should have their septic systems inspected at least once a year. However, most people wait until a problem arises before calling for service. Taking into account the environmental and health risks associated with raw sewage, it should be in everyone’s best interest to carry out routine maintenance on their septic tanks at home.
As you get into the planning stages of your business, it is essential to come up with an automated process of generating reminders to notify your customers when their tanks are due for maintenance. Your startup will enjoy revenue stabilization if your system is effective. Moreover, your clients will also benefit from better septic tank performance.
Checklist for Starting a Septic Cleaning and Pumping Service
Before you start your septic cleaning business, it is essential to understand the industry you are about to enter. Here is a detailed checklist to guide you:
Step 1: Write a Business Plan
Once you’ve come up with your brilliant idea, the next step should be to establish a business plan. A business plan will help set your goals and strategies for growing your business within the industry. It’s like using a road map to get to your desired destination.
If you don’t already know, a septic cleaning and pumping service company generates income by charging clients for the cleaning and maintenance of their septic systems. This means that your business plan should include:
- Your primary target market
- A description of the services offered
- Research on current market trends
- An analysis of your main competitors
- An outline of marketing strategies
- Established septic tank service prices
- A definition of your service area
- Financial projections of your business
Your business plan should also include an organization flowchart for all future employees, with clearly defined job roles and expectations. You may decide to pay your employees an hourly rate, or offer them flat-rate pay. Also be sure to include an executive summary to cover all these details, along with your company’s mission statement and core values. This will help you understand the business you are trying to build and create on a fundamental level. This will also be helpful if you ever need to approach a bank to ask for a loan for your business.
Step 2: Know the Startup Costs and Requirements
You need to know how much capital you will need to acquire before you start your business. Doing this will help you evaluate if you have sufficient funds to afford for your business on your own. The starting capital will be inclusive of the cost of purchasing specialized equipment. This includes equipment like vacuum trucks, which can cost you at least 200K..
Other expenses for your septic business could include:
- Labor costs
- Software tools
- Legal services
- Contractor licensing fees
- Office supplies
- Fueling cost
- Vehicle maintenance & repair
Additionally, you’ll need to figure out a monthly budget for your running costs. Some costs—like renting your office space—will recur monthly, while others—like license renewal—may be annual. You will also need to renew the commercial driver’s license for your business every four years. This cost may not be frequent, but it must be accounted for. However, it is important to note that disposal fees make up a substantial additional cost for your septic business. These prices are different for every municipality.
Step 3: Check Out Your Competition
Carry out extensive ground research to know which other companies in your area also offer septic cleaning and pumping services. Pay close attention to their target market and the specific services they offer. You should also evaluate their pricing structure and look into their customer reviews. Doing this will help you understand the competitive landscape in your area.
Once you have established all these factors, you will know how to set your business apart from the competition to capture your customers’ attention. For example, if you find customers complaining about pricing, you can find new ways to add value to your service. This industry is all about relationships and customers will pay for great customer care.
Step 4: Learn from Others in the Industry
As part of carrying out due diligence on starting a septic cleaning and pumping business, it is wise to get advice from someone already in the industry. However, if you believe owners of nearby septic businesses will give you worthwhile insights, you need to think again. The last thing they would want to do is help out their competitor.
Fortunately, a business owner in another city may have no issue sharing their entrepreneurial wisdom on how to run a successful septic cleaning business. That said, your best bet would be that you will have to do some networking before finding someone willing to share their wisdom with you. Therefore, it is important to have a great deal of patience while looking for a mentor.
We suggest finding a Facebook group, attending an industry convention, or networking through your potential suppliers as a way to help find a mentor. Taking this a step further, consider finding a state association to assist in the information gathering. At a minimum, check out the National Associations of Water Technicians or NOWRA, to begin networking.
Step 5: Acquisitions or Startups?
Unfortunately, most entrepreneurs who wish to get into the septic cleaning and pumping business mistakenly think that a startup is the only sure way to get into the business. With the exception of business startups that require very high innovation, it is often less risky to purchase an existing septic cleaning and pumping business than it is to open a startup. What’s more, startups are less certain, because they solely rely on estimated outcomes. Finding the right acquisition may quickly propel you into a leadership position in the industry. All you require is a leap of faith.
Before you begin, we suggest you to speak to your CPA is appropriate here in determining the entity they should utilize.
Step 6: Consider Franchising
Before establishing your septic cleaning and pumping business, you should determine whether or not franchising may work best for you. Your chances of becoming a successful entrepreneur may significantly increase when you franchise instead of handling everything on your own. It also helps you establish your business in different cities where it can build a community and client base.
Step 7: Select a Suitable Legal Entity
If you decide to venture into the septic cleaning and pumping business, selecting an entity will be a big determinant of how much your business will grow. Depending on the future outlook of your business, you can decide to go with a general partnership, sole proprietorship, or limited liability company. A sole proprietorship is most suitable for a small-scale septic cleaning and pumping business. However, an LLC will work best if you intend to grow the business into other cities. Deciding what type of entity your business will become is essential before you can open your services to the public.
Step 8: Apply for Business Licenses & Permits
Educate yourself on the local, state, and Environmental Protection Agency laws and regulations regarding how to operate a septic cleaning and pumping service. It would be best to research general business registrations, such as Employer Identification Numbers, sales tax permits, and local business permits.
Step 9: Get Business Insurance
There are several types of business insurance to take into consideration before setting up a septic cleaning and pumping business. These include:
- Workers’ compensation insurance: covers expenses such as legal fees and medical bills that your company may incur if an employee gets hurt at work.
- General liability insurance: covers you in third-party claims of bodily harm and damage to property.
- Property and casualty insurance: covers any damaged equipment
It is vital to know whether or not your business is going to have all three types of insurance to help protect it from legal repercussions, or if it will only have a couple of them.
Step 10: Come Up With Effective Marketing Strategies
Like with any other business, it is important to target the right audience with the right message at the right time. Let prospective clients know they can depend on your business for emergency services, and that you provide a warranty on any work your business performs.
Another essential marketing strategy for septic companies is creating awareness on the importance of regular septic tank maintenance. Let your clients understand that by servicing their septic tanks regularly, they can:
- Save money: the cost of replacing a septic tank is way higher than the cost of maintenance.
- Drink pure water: regular maintenance of septic systems prevents pollutants from contaminating nearby groundwater sources.
It is also important to develop an excellent social media presence and register your septic cleaning and pumping business on Google. Be active on social media and make sure to engage your customers online. You can also go for more traditional strategies, such as going door-to-door with flyers marketing your business.
Step 11: Hire & Train Septic Workers
Given the current trade worker shortage and economic disruptions caused by the recent global pandemic, it may be challenging to find qualified septic professionals. Despite these apparent hurdles, a successful septic cleaning and pumping business is developed by bringing together a strong team with a well-developed organizational chart and operating manuals.
It is important to create clear job descriptions, highlighting your expectations for every position, and offer extensive training that prepares each employee for success. You should also invest as much time recruiting and training employees as you do developing an effective business plan and marketing strategy. While it may seem like a waste of company resources at first, an investment in your workforce will pay off in the end.
Step 12: Come Up with an Accounting System
Setting up an accounting system for your business is important to ensure your business’s long-term success. Staying on top of taxes is essential to stay out of trouble with the government. Furthermore, you should separate your business and personal accounts to make it easy to track and monitor cash flow to increase profits.
Step 13: Integrate a Routing Technology
One way to maximize the profits of your new septic tank business is to boost productivity with efficient route optimization. Route optimization is the process of finding the most efficient route to reduce mileage and significantly increase the number of jobs your team can complete in a given amount of time. This process involves:
- Evaluating all available jobs
- Finding out where the jobs are located
- Technician Scheduling
- Service appointment times
Manual route optimization is challenging and time-consuming. However, using current technology makes this process much more manageable.
Step 14: Use Reviews to Scale Up Your Profits
Positive online reviews are critical for managing the reputation of your septic cleaning and pumping company. Most customers read online reviews before committing their money to purchase a product or service.To get outstanding reviews regularly, your technicians need to offer exceptional customer service and go beyond the customers’ expectations every time they interact with a client. Septic service clients value their time and money, and your technicians should not make them lose either.
Getting Your Septic Cleaning & Pumping Business Started
It is important to keep in mind that every business has to start somewhere. Do not be intimidated by the thriving septic cleaning and pumping services operating in your local area. As long as you are dedicated, and patient, and you have attention to detail, you will be successful in this industry. Most importantly, carry out your due diligence related to economics, market research, and cost analysis before starting your big venture.
At Satellite Industries, we understand how important it is to have the proper infrastructure for your septic cleaning and pumping business. Contact us today to work with our expert technicians to get your business started.