Do you have the entrepreneurial spirit? Do you love to build things and receive great satisfaction from a job well done? If so, you’ve come to the right place!
The remodeling business is as important today as it’s ever been. This is because many homeowners are opting to save money by remodeling their existing homes rather than building new structures or buying new homes. This is a smart financial move.
It’s also good news for anyone considering going into the remodeling business. Do you have the desire to work for yourself, to work with customers to improve their homes, and to contribute to a thriving economy?
Let’s take a look at a few things you’ll need to know in order to get your own remodeling business off the ground.
Table of Contents
Understand the Skills You’ll Need
Starting any kind of business requires asking yourself some serious questions. After all, not everyone has a head for the complexities of running a business nor the ambition to stay ahead of the competition in a crowded marketplace.
Getting into remodeling isn’t for the frail of heart. You’ll need to understand construction, have great people skills, be able to handle numbers, and be a very organized person.
This is a business that requires long hours and dedication to the job. You will have to deal with unreasonable and demanding clients who will call you at all hour of the day and night.
But most of all, you have to have the necessary business skills to get the job done right and to get it completed on schedule. So you’ll need to take a long look in the mirror, be honest with yourself, and decide if you’re qualified for the task and willing to give a hundred and ten percent.
Know Your Target Market
Smart entrepreneurs understand the importance of knowing the type of customers to target. When it comes to remodeling, perhaps you’ll want to target upscale homes in a big, expensive neighborhood.
High-end homes offer huge potential.
This type of customer has money and is ready to spend it. They tend to buy the best appliances, use the best building materials, and can recommend you to their friends. But they can also be extremely picky and demanding, and will often want you to focus solely on their project.
Middle-class homeowners can be easier to deal with, yet you’ll often have to take on more jobs for less money.
Some remodeling contractors are able to work with both type of clients, but you’d better make sure you have the manpower, resources, and skills to satisfy everyone.
Understand How a Remodeling Business Makes Money
A remodeling business generates income by charging customers for labor and materials for renovations of existing homes and other types of structures. Many construction companies specialize in commercial work, renovating businesses, schools, or municipal buildings.
The amount you’re able to charge for your hourly rate will be based on your level of expertise and the competitive rates in your area.
Understand the Startup Costs
Starting a remodeling business is like starting any company from scratch. There are plenty of expenses to get going. You’ll need to invest in expensive, specialized equipment. This includes power tools like drills and saws, hammers, ladders, extension cords, and air compressors, etc.
You will also need a commercial vehicle for your business, such as a pickup truck with signage on the door to advertise the business. The truck will need to be equipped to haul equipment and materials from site to site.
Other startup costs will include local permits and state licenses that allow you to do work in the area. You’ll also need insurance to cover any damage that might occur on job sites as well as workmen’s comp insurance to cover injuring to employees.
Be aware that these costs will add up fast.
Understand the Basic Steps to Starting a Remodeling Business
So now that you have a basic understanding of your target customer and what most of your startup costs will be, it’s time to look at the actual steps to getting your business up and running.
Well, first you’re going to need a business plan. This is essential to becoming a successful entrepreneur. Your business plan will layout things like startup costs, projected annual revenues, and how long you expect it to take for the business to break even.
The business will need to be registered as a legal entity. This prevents you from being held personally liable in the event that the business is sued. You’ll also need to register the business for taxes and open a business checking account.
As mentioned earlier, there are local permits and state licenses that you need to obtain. Without them, the business can be fined or even shut down.
Develop a Marketing Plan
Now you need to develop a marketing strategy and establish your brand. When considering your brand, remember to take your target market into consideration. After all, you need to appeal to the type of customer you’re hoping to attract.
Branding is all about how your business is perceived by the public, and a strong brand will help you stand out from the competition.
Marketing and promotion are never easy.
You’ll start by putting the company name on the side of all your corporate vehicles and invest in a quality website.
Social media is probably the most effective and low-cost form of marketing. You don’t have to spend a fortune on advertising, but there are a few things you can invest in that will be money well spent, including SEO that will take advantage of web searches by customers in your area.
Keep in mind that social media is also the way that satisfied customers will spread the word about your business. When someone is looking to hire a remodeling company, they will often survey their friends on Facebook and Twitter before talking to anyone face to face.
This is another reason to consider investing some marketing dollars in various forms of cheap advertising like CCP on Facebook.
Knowing When to Hire a Team
Once you’ve started attracting customers and getting jobs, you’ll likely soon discover that you can’t do everything yourself. This is especially true with bigger jobs and multiple job sites.
Keeping up with work demands means hiring skilled carpenters, installers, and even office personnel and accountants.
There are a few ways to find skilled tradesmen, including putting the word out with local hardware stores, posting a help-wanted listing on Craigslist and other online employment forums, or putting an ad in the paper.
The real trick is finding good help. You’ll need quality craftspeople with the skills necessary for the job, who show up on time and are able to complete jobs on schedule.
If you’re interested in finding a local contractor, ready this great post by Lars Remodeling.
Learn to Outsource
The simple reality is that there are only 24 hours in a day. And we’ve already established that you can’t do everything on your own. When starting out, you might not be ready to hire on a full-time crew. Luckily there are other options.
Outsourcing can be the ideal solution for covering your needs without getting in over your head. This is especially true for office-oriented needs such as accounting and secretarial work. After all, you don’t want to waste precious daylight hours behind a desk when you can be onsite managing projects and dealing with clients.
Resist the Impulse to Expand Too Quickly
This is a trap many small businesses fall into. As your workload grows, you’ll likely find yourself tempted to hire more people, and then take on even more jobs, and then borrow money to cover the financial burden of your growing operation.
This can be a dangerous cycle that leads to becoming overextended.
Don’t be afraid to stay small. This will help you keep your expenses low and provide a more manageable workload, thus reducing your stress.
As an entrepreneur, watching your business grow can be exciting, just be aware that things can easily get out of control in a hurry.
Find Your Niche
One of the smartest ways to help your business stand out from the competition is to offer something unique. Catering to a niche market actually reduces the number of companies you have to compete with.
Perhaps you cater solely to commercial properties or homes with minimal square footage, or offer unique designs that customers love.
Offering a specialization or catering to a niche market can certainly help you stand out, just make sure you are reaching a wide enough audience to provide plenty of work to sustain your business.
The Keys to Building a Successful Remodeling Business
Starting any kind of business requires a tremendous amount of time and effort. After all, no one said it would be easy. But for anyone who has ever dreamed of operating their own remodeling business, the sacrifices are worth it.
Small general contractors are an important part of the economy. They do amazing work and employ the craftspeople who make our country great.
Click here to learn how to make your home more energy efficient.