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If you’re skilled at home design or handy with home repairs and want to be your own boss, starting a home remodeling business can be a great career choice. The home renovation market continues to grow, seeing a 3% growth totaling over $420 billion following the COVID-19 pandemic. With many homeowners choosing to stay and update their property instead of moving, this trend is expected to continue. You can take advantage of the market by starting your own home remodeling business. Before starting on renovation projects or ordering kitchen appliances for customers, there are essential steps to take as a business owner. Learn the procedures you need to follow to start a successful home remodeling company.
Ask Yourself Hard Questions
While starting a new business seems fun, running your own company takes time and hard work. Ask yourself if you’re a self-starter who can commit to the responsibilities before starting your remodeling business. Not everyone has the personality to be self-employed or take the initiative. It’s better to know ahead of time than to struggle or fail. You also need to assess your financial outlook to avoid problems in the future. Do you have enough savings to cover your start-up costs? Will you be able to pay your bills if the first few months of business are slow? Estimate your operating costs and learn how many projects you need to complete to turn a profit.
Plan Your Remodeling Specialty
When planning your company, first decide the type of home renovations you’ll offer. If you’re skilled at plumbing and tile work, bathroom remodeling is a good choice. Renovators experienced in selecting kitchen appliance packages for others may want to stick with remodeling kitchens.
Your business should only provide services you excel in and enjoy. For example, if you can design kitchen layouts but aren’t experienced picking out finishes, don’t offer complete design services. Instead, limit your services to construction and suggest your client consult with an interior designer. Specializing allows you to focus on what you do best, which leads to more positive reviews and referrals.
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Form a Legal Entity for Your Business
To formally start your company, you’ll need to decide on a name and a business structure. The name of your business should reflect your identity and goals and must follow your state’s naming guidelines. This includes choosing a name that isn’t too similar to your competitors. Once you decide on a name, you can form your legal business entity from the following options:
- Sole proprietorship: This is a cost-effective and easy to form business structure. This is the best option if you’re working alone or with your spouse.
- LLC: This option works well when more than one owner is involved. LLC members decide how they want to be taxed and can choose from a sole proprietorship, a corporation or a partnership.
- General partnership: This structure is formed when you’re in business with another person and plan to share the responsibilities, profits and losses associated with the company. Each partner is liable for half the assets and debt. Under this structure, you will have to file a personal tax return in addition to a tax return for the business.
- C-corp: If you plan to grow your business and go public, this structure is best. It’s more complicated than other entities, and owners are protected from personal liability if the company goes bankrupt.
Prepare Your Financials
Once you’ve selected your name and formed your business entity, you need to choose a banking partner and set up business accounts. First, you will need to apply for an employer identification number (EIN). This number is required to open business accounts at banks and file taxes. The right banking partner can help you get a working capital loan, monitor your cash flow and plan for growth. You may want to consult with a financial advisor to learn how to develop a financial strategy.
Obtain Insurance and Licensing
Before you begin remodeling, you must get the appropriate licensing and insurance. Most states require these elements to regulate remodeling companies and ensure public safety. Most states require you to obtain a general contractor’s license and business insurance before doing paid work on someone’s home. Check the U.S. Small Business Administration (SBA) website for regulations concerning small business insurance, and get in touch with your state’s SBA for specific requirements. You may need small business insurance, general liability insurance and workers’ compensation insurance to operate.
Network with Vendors, Suppliers and Contractors
Every good business owner connects with others in the industry to develop a far-reaching network of vendors, suppliers and contractors. The connections you create can help your company excel through word-of-mouth recommendations. You can develop your remodeling industry connections in a few ways. Effective networking ideas include:
- Attending industry trade shows
- Asking for recommendations from your partners and staff
- Handing out professional business cards
- Networking online on sites such as LinkedIn
You can also work with vendors who offer contractors and designers discounts on premium items like ZLINE appliances to save money and promote brand partners.
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Develop a Marketing Strategy
All businesses need a solid marketing strategy to bring in clients. As a remodeling company, you must think about how you will tell potential clients about your business so they can use your services. Essential elements of a modern marketing plan include building a user-friendly website, developing a social media presence and maintaining an impressive portfolio of your work.
According to an industry survey, a visitor only takes .05 seconds to decide whether to stay on or leave your website. An effective marketing strategy means developing a fast-loading website with a user-friendly layout that keeps potential clients interested in your services.
Social media presence
In today’s digital world, you must have a social media presence to bring in clients. As a remodeling company, consider starting an Instagram, Facebook or TikTok account where you can share remodeling tips or show the transformative power your work produces on your client’s homes.
Maintaining an impressive portfolio is a necessity for a remodeling company. Take before and after photos of your remodels and post them on a website portfolio to show visitors what your remodeling services can do for their space.
Start Your Home Remodeling Business Today
You can easily start a profitable home remodeling business with the right skills and organization. Start by asking yourself a few direct questions to make sure starting your own business is what you want to do, and then take the practical steps necessary to form and run your remodeling company.
Finally, develop a marketing strategy to get the word out about your business’s unique approach and start working with paying clients to see your business grow.
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