How to Start and Grow an Irrigation Business in 13 Steps

Here are the most important factors to consider when you want to start an irrigation business:

1. Permits and licenses — Obtain the necessary certifications and licenses to operate your irrigation business legally. This may include business licenses, contractor licenses, and specific certifications for irrigation system installation and maintenance. Check with local authorities for specific requirements.
2. Equipment — Invest in high-quality equipment and tools required for installing and maintaining irrigation systems. This includes pipes, sprinklers, pumps, valves, and specialized tools. Ensure your equipment is reliable and well-maintained.
3. Insurance — Secure comprehensive insurance coverage for your irrigation business, including liability insurance, equipment insurance, and worker’s compensation insurance. This protects your business from potential risks and liabilities.
4. Register your business — A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple. Form your business immediately using ZenBusiness LLC formation service or hire one of the best LLC services on the market.
5. Legal business aspects — Register for taxes, open a business bank account, and get an EIN.
6. Expertise — Develop and maintain expertise in irrigation system design, installation, and maintenance. Continuous education and training are essential to stay updated with the latest technologies and best practices in the industry.
7. Specialization — Identify and specialize in a niche market within the irrigation industry, such as residential irrigation, commercial irrigation, or agricultural irrigation. Specialization can help you target specific customer segments and differentiate your services from competitors.
8. Logistics — Set up an efficient logistics system to manage the transportation and storage of equipment and supplies. This includes coordinating deliveries, managing inventory, and ensuring timely service to your clients.
9. Grants — Research and apply for grants and funding opportunities available for businesses in the irrigation industry. Grants can provide financial support for equipment purchases, training, and other business expenses.

You May Also Wonder:

Is an irrigation business profitable?

An irrigation business can be very profitable. You’ll just have to spend some money on marketing to get your first clients, and then build your business with referrals.

What is the growth potential of an irrigation business?

An irrigation business can grow by dominating the local market and then expanding to other locations. It could even be a franchise opportunity.

Can you start an irrigation business on the side?

You could start an irrigation business on a small scale as a side hustle. It would be difficult to manage more than one job at a time though.

What is the profit margin for irrigation?

When you have a staff, you should be able to make a profit margin of about 20%. If you just do small jobs on your own, it can be closer to 60%.

Step 1: Decide if the Business Is Right for You

Pros and cons

Irrigation industry trends

Industry size and growth

• Industry size and past growth – The U.S. water supply and irrigation systems industry is worth $97 billion in 2023 after growing .7% annually for the last five years.((https://www.ibisworld.com/industry-statistics/market-size/water-supply-irrigation-systems-united-states/))
• Growth forecast – The U.S. water supply and irrigation systems industry is projected to grow .4% in 2023.
• Number of businesses – In 2023, 59,002 water supply and irrigation systems businesses are operating in the U.S.((https://www.ibisworld.com/united-states/market-research-reports/water-supply-irrigation-systems-industry/))
• Number of people employed – In 2023, the U.S. water supply and irrigation systems industry employs 271,419 people.

Trends and challenges

Trends

• Wireless crop irrigation control is being utilized more and more by farmers.
• Solar or battery operating irrigation systems are now being installed for landscape irrigation.

Challenges

• Irrigation regulations, such as those regarding water conservation, are tightening, making it challenging for irrigation companies to keep up.
• Finding experienced staff is becoming more challenging for irrigation companies.

Demand hotspots

• Most popular states – The most popular states for irrigation system installers are Mississippi, New Hampshire, and California.((https://www.zippia.com/irrigation-system-installer-jobs/best-states/))
• Least popular states – The least popular states for irrigation system installers are South Dakota, South Carolina, and Oklahoma.

What kind of people work in irrigation?

• Gender – 2% of irrigation system installers are female, while 98% are male.((https://www.zippia.com/irrigation-system-installer-jobs/demographics/))
• Average level of education – The average irrigation system installer has a bachelor’s degree.
• Average age – The average irrigation system installer in the US is 41.8 years old.

How much does it cost to start an irrigation business?

Startup costs for an irrigation business range from $30,000 to $50,000. Costs include an office space rental, equipment and supplies, and a labor and operating budget. 

Alternatively, you could start by working from home and taking small jobs that you can handle yourself. 

You’ll need a handful of items to successfully launch your irrigation business, including: 

• Nozzles
• Sprinkler heads
• Sprinkler systems
• Smart Valve Accessories
• Drip Inline Tubing
• Drip Kits & Accessories
• Smart Sprinkler Controllers
• Smart Sensors
• Maintenance Tools
• Digging tools

Start-up Costs	Ballpark Range	Average
Setting up a business name and corporation	$100 - $500	$300
Business licenses and permits	$100 - $300	$200
Insurance	$100-$500	$300
Website	$200 - $1,000	$600
Offfice space rental	$2,000 - $4,000	$3,000
Equipment and supplies	$5,000 - $10,000	$7,500
Labor and operating budget	$25,000 - $35,000	$30,000
Marketing budget	$500 - $1,000	$750
Total	$33,000 - $52,300	$42,650

How much can you earn from an irrigation business?

The average price for a residential irrigation system is about $2,500. Your profit margin if you work by yourself at first should be about 60%.

In your first year or two, you could work from home and install four systems a month, bringing in $120,000 in revenue. This would mean $72,000 in profit, assuming that 60% margin. 

As you gain traction, sales could climb to 20 systems a month. At this stage, you’d need an office and staff, reducing your margin to around 20%. With annual revenue of $600,000, you’d make a tidy profit of $120,000.

What barriers to entry are there?

There are a few barriers to entry for an irrigation business. Your biggest challenges will be:

• Funding the startup costs
• Having the right experience and knowledge
• Breaking into a competitive market

Step 2: Hone Your Idea

Now that you know what’s involved in starting an irrigation business, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research could give you the upper hand even if you’ve got the perfect product. Conducting robust market research is crucial, as it will help you better understand your customers, your competitors, and the broader business landscape.

Analyze your competitors 

Research irrigation businesses in your area and online to examine their products and services, price points, and customer reviews.

• Make a list of irrigation businesses that offer similar products or services. 
• Review your competitors’ products and services – their features, pricing, and quality – and marketing strategies.
• Check out their online reviews and ratings on Google, Yelp, and Facebook to get an idea of what their customers like and dislike.
• Identify your competitors’ strengths and weaknesses. 

This should identify areas where you can strengthen your business and gain a competitive edge to make better business decisions.

Why? Identify an opportunity

You’re looking for a market gap to fill. For instance, maybe the local market is missing an irrigation company that does irrigation repair, or an irrigation business that also does landscaping and landscape lighting.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your services

You could choose to specialize in home irrigation system installation, which is the least expensive option, or you could specialize in farm irrigation systems. You could also offer irrigation system repairs and maintenance.

How much should you charge for irrigation systems?

Your price will depend on the size of the system and market prices in your area. They’ll also be based on your costs of the system and its installation. 

Once you know your costs, use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

If you specialize in home irrigation systems, your target market will be homeowners and farmers, who are more established groups. Your best bet would be to market on Instagram or Facebook. 

Where? Choose your business premises

In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out an office You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

Step 3: Brainstorm an Irrigation Company Name

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “irrigation” or “irrigation installation”, boosts SEO
• Name should allow for expansion, for ex: “Aqua Expand” or “Infinite Wet” over “Crop Drip” or “Vine Flow”
• A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead and reserve your business name with your state, start the trademark registration process, and complete your domain registration and social media account creation. 

Your business name is one of the key differentiators that sets your business apart. Once you pick a name, reserve it and start with the branding, it’s hard to switch to a new name. So be sure to carefully consider your choice before moving forward. 

Step 4: Create an Irrigation Business Plan

Here are the key components of a business plan:

• Executive Summary: Provide a brief summary of your irrigation business, highlighting its purpose and the need it addresses in the market.
• Business Overview: Describe your irrigation business, explaining what types of irrigation systems you specialize in and the geographical areas you serve.
• Product and Services: Detail the irrigation products and services you offer, such as sprinkler systems, drip irrigation, installation, maintenance, and any specialized solutions.
• Market Analysis: Analyze the demand for irrigation services in your target market, considering factors like climate, agricultural activity, and landscaping needs.
• Competitive Analysis: Identify other irrigation companies in your area, their strengths and weaknesses, and explain how your business will stand out in terms of quality, pricing, or technology.
• Sales and Marketing: Outline your strategies for attracting customers, including digital marketing, partnerships with landscapers or farmers, and promotions to drive sales.
• Management Team: Introduce key team members responsible for running the irrigation business, highlighting their experience in the industry and expertise in irrigation systems.
• Operations Plan: Describe the logistics of providing irrigation services, including installation processes, equipment sourcing, scheduling, and customer support.
• Financial Plan: Present financial projections for your irrigation business, including startup costs, revenue forecasts based on projected contracts, expenses for equipment and labor, and expected profitability.
• Appendix: Include any relevant documents, such as case studies of past projects, certifications, partnerships with suppliers, and marketing materials.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to irrigation businesses. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your irrigation business will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts. Here’s how to form an LLC.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation. Read how to start a corporation here.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have. 

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding an irrigation business. 

Step 8: Apply for Licenses/Permits

Starting an irrigation business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

Your state may require an irrigation contractor’s license, so check with your state for requirements.

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your irrigation business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.  

You may want to use industry-specific software, such as FieldCentral, Chetu, or ServiceTitan, to manage your jobs, schedule, dispatching, and employees.

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero. 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Create a website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism. You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

Your customers are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. SEO will help your website appear closer to the top in relevant search results, a crucial element for increasing sales. 

Make sure that you optimize calls to action on your website. Experiment with text, color, size, and position of calls to action such as “Schedule Now”. This can sharply increase purchases.

Marketing

Here are some powerful marketing strategies for your future business:

• Local Partnerships: Collaborate with local landscaping businesses, garden centers, or agricultural suppliers to create mutually beneficial partnerships that can lead to referrals and shared promotional efforts.
• Educational Workshops: Host workshops or seminars on efficient irrigation practices for homeowners, gardening enthusiasts, or local community groups to position yourself as an expert and build trust in your expertise.
• Seasonal Promotions: Offer seasonal promotions or discounts during peak times, such as spring and summer, to incentivize clients to schedule maintenance or installations ahead of busy periods.
• Testimonials and Case Studies: Showcase successful projects and customer testimonials on your marketing materials to build credibility and reassure potential clients about the quality of your services.
• Social Media Engagement: Leverage social media platforms to share before-and-after pictures, irrigation tips, and success stories, engaging with your audience to create a sense of community around your brand.
• Local Event Sponsorship: Sponsor local events, fairs, or community gatherings to increase visibility and demonstrate your commitment to supporting the community, fostering a positive brand image.
• Referral Programs: Implement a referral program offering discounts or incentives to existing clients who refer new business to you, tapping into the power of word-of-mouth marketing.
• Targeted Direct Mail: Develop targeted direct mail campaigns to reach specific demographics or neighborhoods, showcasing your services and emphasizing the benefits of efficient irrigation for homeowners.
• Customer Loyalty Programs: Establish a loyalty program that rewards repeat customers with special discounts, priority scheduling, or exclusive promotions to encourage long-term relationships and repeat business.
• Online Reviews Management: Actively manage your online reviews on platforms like Google My Business and Yelp, promptly addressing customer feedback to demonstrate responsiveness and dedication to customer satisfaction.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your irrigation business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your irrigation business could be:

• We install your irrigation system fast
• Irrigation to keep your landscaping fresh
• Irrigation installation and repair – same day service

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running an irrigation business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in irrigation for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in irrigation. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for an installation business include:

• Laborers – assist with irrigation installation
• Dispatcher – dispatch workers to jobs
• Marketing Lead – create and implement marketing strategies
• General Manager – accounting, scheduling

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run an Irrigation Business – Start Making Money!

It’s time to put your irrigation experience to work and join a nearly $100 billion industry. You’ll get to work outdoors, help people, and put some money in your pocket. There’s no limit to how large you could grow your business by expanding to other areas, so you could become an irrigation mogul.

You understand the business now, so it’s time to hit the ground running and get your successful irrigation business going!