Start an irrigation business by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your irrigation business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening an irrigation business?
An irrigation business requires tubing/piping, sprinklers, an array of digging tools, employees, insurance, an office, utilities, a computer, a printer, and a high-speed Internet connection.
What are the ongoing expenses for an irrigation business?
Irrigation businesses require laborers to install and maintain irrigation systems. These workers typically make between $10 and $18 per hour. If your business grows, white collar workers will also be necessary. A receptionist will demand at least $12 to $15 per hour. An office manager will command a salary between $30,000 and $45,000 per year. Accounting and marketing professionals will demand annual compensation in the range of $35,000 to $50,000.
The office rent and utilities will likely cost between $600 and $1,000 per month. High-speed Internet will run about $50 per month. Workers' compensation premiums vary depending on the number of people employed by the business. Irrigation systems including sprinklers, tubes, piping are an ongoing expense. The cost of these items hinges on the number of clients you recruit. Budget in at least $500 to $1,000 for such equipment when launching your company. This expense will gradually increase as your business expands.
Who is the target market?
The preferred client is an individual or organization with multiple properties that require an ample supply of water. Examples include farmers, public entities, businesses, and homeowners with expansive green spaces and landscaping. Key in on new housing developments and commercial spaces with an abundance of green space.
How does an irrigation business make money?
Money is made by installing and maintaining irrigation systems to transmit water to grass, shrubs, landscaping, crops, athletic fields, and other green spaces.
How much can you charge customers?
The installation of an irrigation system for a quarter-acre lot runs between $3,000 and $4,000. Maintenance of irrigation systems is an ongoing effort. You can charge anywhere from $100 to $500 or more for repairs, depending on their severity.
How much profit can an irrigation business make?
You might not make a significant amount of money in the first year or two of operation. Stick with the business, expand your customer base, pinpoint the highest-quality equipment that doesn't bust your budget, and you will make good money in the ensuing years. It is possible to make upwards of six figures or more after several years of operation. Expand your enterprise across the region and it will be possible to earn between a quarter-million and half a million dollars per year. If your business really takes off and becomes a franchise, it is possible to rake in millions of dollars per year.
How can you make your business more profitable?
Additional profit can be made by offering irrigation system repair services. Offer retrofitting and you will thrive in a niche with minimal competition. As irrigation system technology improves, opportunities will abound for retrofitting of antiquated systems. This is the gift that keeps on giving. A decent percentage of customers will shell out money for annual retrofits to enhance their irrigation system's functionality and efficiency.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your irrigation business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Find the right bank for you, read our review of the Top 5 Banks for Your Small Business
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate an irrigation business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
In addition, certain local licensing or regulatory requirements may apply. For more information about local licenses and permits:
- Check with your town, city or county clerk’s office.
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
Irrigation businesses should consider requiring clients to sign a service agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership. Here is an example service agreement.
Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your irrigation business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.
STEP 7: Get Business Insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market an irrigation business
Launch the initial marketing campaign with fliers. Post them in communal spaces such as bulletin boards and telephone poles. Ask local business owners if you can place your fliers by their door or cash register. Do not hesitate to go door-to-door handing out your fliers. Find out if current customers will let you place your business's sign in their yard while installing or maintaining their irrigation system. Encourage your initial customers to spread the word about the merit of your irrigation services. Build a highly polished website with an intuitive user experience design including keyword-laden content, a blog optimized for search engine queries and a simple contact form.
How to keep customers coming back
The best way to attract and retain customers is to please those who give you the chance to install and/or maintain irrigation systems at their property. A job well done will lead to referrals to other locals within driving distance of your office. Pose as a customer and reach out to competing irrigation businesses to learn about their pricing structure. Match or beat competitors' prices. Search engine optimization will prove critically important in your quest to recruit customers. Make sure your website, blog, and social media content is optimized for search engine sleuthing.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start An Irrigation Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
This is the perfect business for someone who is familiar with the intricacies of lawn treatment, landscaping, farming, athletic field maintenance, and other green spaces. Individuals who have experience maintaining green spaces and other areas with grass, trees, shrubs and/or crops will likely thrive in the irrigation business.
What happens during a typical day at an irrigation business?
The typical irrigation business owner performs diverse daily activities such as recruiting new customers, installing irrigation systems, maintaining irrigation systems, researching and ordering equipment, delegating work to employees, and advertising the business.
What are some skills and experiences that will help you build a successful irrigation business?
A thorough knowledge of yard maintenance is essential. The entrepreneur should understand the nuances of grass, trees, shrubs, and crop growth. An understanding of inbound and outbound marketing methods will also help expand the business in a fast and cost-efficient manner.
What is the growth potential for an irrigation business?
This business has the potential to grow quite rapidly as long as the entrepreneur can establish relationships with locals in need of irrigation services. Networking efforts can lead to business relationships that catalyze business growth. It is possible to eventually expand the business across the region, the state, and into a franchise with locations across the country.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting an irrigation business?
Start out by recruiting customers located near your office. You do not want expend a considerable amount of time and money on fuel to travel to customers who are located far away from your home base. Focus on nearby customers and you will minimize drive time while fitting as many jobs as possible into each day. Exceed locals' expectations, build your business from their referrals and gradually expand to the outskirts of your locale.
It is imperative that you go out of your way to befriend local property owners, business owners and government officials. These relationships might not directly lead to new business contacts yet they have the potential to lead to other relationships with individuals who require irrigation services. Do your research to pinpoint the most efficient and reliable irrigation equipment on the market. If the system you install stands the test of time and minimizes the customer's water bill, he will be happy with your service and recommend you to those in his social, family, and professional circles.
Be sure to establish a meaningful relationship with local distributors. These business professionals will hook you up with the latest and greatest equipment, educate you about irrigation system merits and invite you to industry conferences as well as trade shows. Consider offering new customers a multi-year warranty on parts and labor. Demand a partial down payment upfront and you will greatly increase the odds of establishing an initial customer base.
How and when to build a team
It will likely be possible to perform the initial irrigation projects with the help of a couple laborers. As your business expands, you will need a larger group of laborers for irrigation system installs and maintenance. A receptionist, office manager, marketing expert and accounting professional will likely be necessary as the business grows.