Buying a plumbing business in Florida

A plumbing business installs and repairs the water, drain, sewer and gas piping in homes and commercial buildings. Most small Florida plumbing companies earn their money in a few ways. Service and repair is the core: leaks, clogged drains, water heaters, slab leaks and fixture replacements, billed per job or by time and materials, often with a premium after hours. Repiping and sewer line replacements are larger jobs, often found during a service call. Commercial maintenance for restaurants, property managers and condo associations brings repeat calls from the same customers.

At some companies, new construction is a large share of revenue: plumbing new buildings for builders, first the pipes inside the walls and later the fixtures. It's bid work, paid in installments (draws) as each stage passes inspection, and it rises and falls with the housing market. A typical company has licensed plumbers and helpers in service trucks, a dispatcher, perhaps an estimator for larger jobs, and an owner who is often still the license holder and the person customers ask for.

• Service and repair revenue from many homeowners and businesses, rather than reliance on one builder.
• Commercial customers, such as property managers, restaurants and associations, who call the company first and have for years.
• A phone number and reviews people trust. Most plumbing calls are urgent and go to whoever answers.
• Plumbers who can diagnose, price and sell the fix on their own, not only follow instructions.
• Equipment for the work that pays well: drain cameras, water jetters, leak detection tools.
• A licensed qualifier (the person whose license the company works under) who isn't the departing owner, or who will stay on after the sale.
• Job records and pricing in software, so you can see what each type of job earns.

The Construction Industry Licensing Board at the Florida DBPR licenses plumbing contractors. A certified plumbing contractor (license numbers starting with CFC) can work anywhere in the state. A registered plumbing contractor can work only where they hold a local competency license. The plumbing license covers water supply, drainage and sewer piping, irrigation, solar water heating and gas piping, among other work. State law doesn't require a license for drain cleaning and clearing alone. Some counties and cities also license journeyman plumbers.

You don't need to be a plumber to own the company, but it must be qualified by a licensed person, called its qualifier. The qualifier supervises the company's work, and its finances too, unless the board approves a financially responsible officer. The license stays with that person and can't be transferred. If the only qualifier leaves, the company has 60 days to hire another but can't contract in the meantime. At most, the board can let an officer finish jobs already under contract (section 489.119). A new company formed to buy the assets must be qualified before it takes jobs, so settle the qualifier's plans before closing.

• The license itself. Look up the qualifier at myfloridalicense.com: the license should be active and show this company's name.
• The split between service, repiping and new construction, and how the new construction share has moved with the housing market.
• Builder contracts: payment terms, retainage (money held back until the job is done) and how much builders owe the company now.
• Warranty claims and callbacks on repipes, slab leak repairs and water heater installs.
• Water damage claims. A failed repair can flood a home, so ask for the general liability claims history.
• Whether plumbers are employees or subcontractors, and how they're paid (hourly, commission, or per fixture on new construction).
• How much work comes from home warranty companies, which often pay set rates below retail.
• Fleet condition and the inventory on each truck.

• Whose license does the company work under, and are they willing to stay after a sale?
• How does your revenue split between service, repiping and new construction?
• Where do your service calls come from: repeat customers, referrals, online search, home warranty companies?
• Do you price jobs at a flat rate or by time and materials, and who sets the prices?
• Which commercial customers call you regularly, and is any of that work under contract?
• How many of your plumbers can run a service call alone, start to finish?
• What's the most expensive warranty or damage claim you've had in the last few years?