Start a septic tank cleaning service by following these 10 steps:
- Plan your Septic Tank Cleaning Service
- Form your Septic Tank Cleaning Service into a Legal Entity
- Register your Septic Tank Cleaning Service for Taxes
- Open a Business Bank Account & Credit Card
- Set up Accounting for your Septic Tank Cleaning Service
- Get the Necessary Permits & Licenses for your Septic Tank Cleaning Service
- Get Septic Tank Cleaning Service Insurance
- Define your Septic Tank Cleaning Service Brand
- Create your Septic Tank Cleaning Service Website
- Set up your Business Phone System
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 septic tank cleaning service. 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 much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a septic tank cleaning service?
This is an expensive business to start. Startup costs are include a pump truck and a place to dump the waste material. Most used trucks can be bought for between $20,000 and $30,000. Other than that, you may need office space and the usual business and office supplies. Your biggest cost will be buying and maintaining a fleet of trucks.
What are the ongoing expenses for a septic tank cleaning service?
Ongoing expenses for this business include office overhead and expenses, truck maintenance, and local fees for waste removal and disposal. Depending on where you live, how much mileage is put on the truck during the year, and how much business you're doing, these costs can be high or low. Some companies realize maintenance costs of up to $15,000 per year, per truck.
Who is the target market?
Preferred customer types are those that live in areas not serviced by municipal water or sewer supply. Customers who are on their own well and sewer system need routine maintenance. While businesses do sometimes own property with a septic tank, most customers will be consumers living in single-family residential homes.
How does a septic tank cleaning service make money?
This business makes money by charging customers to clean and maintain their septic tanks and systems. Most tanks need to be cleaned every 1-3 years, depending on the size of the tank and the number of people using it. So, companies may provide interim complimentary advice-based services on how to clean and maintain the tank and system between pumpings.
How much can you charge customers?
Charges vary, but most companies charge a flat or fixed fee for emptying a septic tank.
These fees run between $75-$200, but they can be as high at $350 or $400. for larger tanks between 1,500-2,500 gallons.
How much profit can a septic tank cleaning service make?
Profit is highly variable in this industry, and depends on local competition and market demand. Some businesses struggle to make 5% margins, while others maintain a 20% margin.
How can you make your business more profitable?
You can make your business more profitable by minimizing overhead costs. In this industry, it’s common to lease pump trucks in the early years. However, these lease costs add up and can decrease profit margins over time.
That’s because the cost to lease may be lower than buying a truck outright in the early years, but becomes much more expensive as time goes on.
Also, try to use as much personal savings as possible and avoid expensive commercial loans.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Septic Tank Cleaning Service Name Generator
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your septic tank cleaning service is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
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?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
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.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
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: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
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.
Make LLC accounting easy with our LLC Expenses Cheat Sheet.
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 a septic tank cleaning business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
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.
For 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.
Occupational Safety and Health Administration (OSHA) Regulations
Septic tank cleaning business owners may interact with harmful chemicals such as industrial cleaners and it is important to reference to OSHA’s (Occupational Safety and Health Administration) rules and general standards for chemicals:
- Standard 1910.1200 states that employees be adequately informed of all potential hazards when working with chemicals
- Standard 1910.132 states that the necessary personal protection equipment be provided to the employee working with chemicals, such as safety glasses, a face mask and suitable gloves
Septic tank cleaning businesses should require clients to sign a services 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.
Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your septic tank cleaning 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.
Businesses are required to register vehicles which will travel across state lines for commercial purposes. Check here for a list of state requirements.
Class B Driver Licensing Requirements
In most states, licences are issued by classes, operating according to the weight of the vehicle being driven. Drivers of standard cars and trucks require a class A commercial driver’s license (CDL), while operators of heavier vehicles, including most tow trucks, require a Class B CDL to operate. More information can be found here.
Oversize Vehicle Permits
Some states, including Michigan, require a businesses to obtain an oversize/overweight vehicle permit for its trucks, sometimes also referred to as “wreckers.” More information about state weight load permitting can be found here.
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.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
How to promote & market a septic tank cleaning service
Market your business locally through the newspaper, on local T.V., and local pay-per-click advertising. Consider sending out direct mail to local residents or posting fliers in community bulletin boards.
How to keep customers coming back
Because this industry has long relied on price cutting and commoditization of the service, you can differentiate your company by setting a higher standard than your competition. Make sure someone friendly, helpful, and patient answers the telephone, for example. Show up to jobs on time, always honor your quotes, and provide more service than what you originally promised.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2022 to find the best phone service for your small business.
Recommended Business Phone Service: Nextiva
Nextiva is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.
Start A Septic Tank Cleaning Service 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 business is perfect for individuals who enjoy daily travel, don’t mind getting dirty, and are willing to work flexible hours. Business owners who start a septic tank cleaning service must also like being around and interacting with other people on job sites and customers as well. Cleaning septic tanks can be hard, dirty, and grueling work, so keep this in mind.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at a septic tank cleaning service?
The day-to-day activities of a septic tank cleaning business include meeting with clients, checking septic tanks, and pumping them. The pumping is normally done with a large truck and a hose, which is lowered into the septic system in the front or back yard. The hose then pumps the tank and hauls away the waste material.
A septic tank cleaning company may service multiple customers during the day, maintaining an active rotating customer list. Other day-to-day tasks include doing paperwork, invoicing clients, and maintaining a log of current and past-due customers.
What are some skills and experiences that will help you build a successful septic tank cleaning service?
This job is skill-intensive. Because septic systems are dynamic and complex ecosystems, containing a host of biological organisms, the downstream effects of a mistake can be expensive.
A few of the more important skills necessary for this business include extensive operation monitoring, operation and control, critical thinking, troubleshooting skills, quality control and analysis, judgment and decision-making skills, monitoring, active listening, and complex problem solving.
Septic tank cleaners must be able to read, monitor, and adjust dials, gauges, and other indicators to make sure a machine is working as it should. They also need to be able to troubleshoot systems out in the field. Since there can be any number of problems on the job, critical thinking and problem-solving is a must.
It also helps to have a plumbing background or experience in the industry before starting your own company.
What is the growth potential for a septic tank cleaning service?
Growth of this business can be slow or fast, depending on demand for services in your area. Competition may be limited in some areas, in which case growth may be exponential. Local laws and regulations may limit or control how septic tank companies operate. This may or may not allow you to expand into new markets and grow your business. Make sure you check local laws and regulations before making business expansion plans.
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.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
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 a septic tank cleaning service?
Marketing your business is important. Check out the competition and what’s working (and what’s not working) before you dive in. Learn from others’ mistakes in the business. Then, fill in the gaps not serviced by your competitors. Often, in this industry, it’s a matter of providing better service and friendlier customer service, than the competition.
How and when to build a team
You can operate this business with one truck, but it will remain a small business. Expand as your funds allow. This business has theoretically unlimited potential as long as there are customers in your service area that need septic tank cleaning and maintenance. Start with one truck and expand to two when you can. Add additional office support staff when you have at least 3-5 trucks.