The US home remodeling market size is projected to reach a staggering $342 billion in 2021. The industry stands to benefit significantly from the current robust housing market, which is characterized by increased growth in home building, home equity, and sales.
For those interested in starting a business in the home renovation sector, there has never been a more opportune moment than this to do so. With the industry experiencing impressive growth, investors stand to rake in massive profits.
But starting a home remodeling company is no walk in the park. There are so many details you need to get right, or your remodeling business ends up among the 90 percent of startups that eventually fail.
We’ve put together a comprehensive guide on how to start a remodeling company. By following these steps, you’ll ensure that your company is properly planned out, well registered, and legally compliant.
Read on to learn more.
Start By Planning Your Business
To succeed as an entrepreneur, you need a clear business plan. A plan helps you map out all the specifics of your home remodeling company.
So what’s included in your business plan? A good business plan includes your startup and your ongoing costs. It also identifies your target market, as well as how much you’re going to be charging your clients.
You’ll also need to include a projection of your potential profits, as well as how you plan to make your company more profitable. Your business plan can also include what you plan to name your company.
Establish a Legal Business Entity
There’s a variety of business structures an entrepreneur can adopt. These include:
- Sole proprietorship
- Limited liability company (LLC)
By establishing an LLC or a corporation, you ensure that you’ll not get held personally liable in the event that your remodeling business gets sued. The good news is that it’s easy to start an LLC on your own and pay the minimal LLC costs required by the state. You could also opt to hire a reputable LLC services provider and pay an additional fee.
Register Your Home Remodeling Company for Taxes
Before officially opening for business, it’s essential to register for various federal and state taxes. You’ll need to start by applying for an employer identification number (EIN) before you can register for taxes.
The good news is that applying for an EIN is easy and free. You can do it online on the IRS website, by email, or via fax.
Open a Dedicated Business Account and Credit Card
Separating your personal business finances from personal finances is business advice that every entrepreneur should follow. Open a dedicated business bank account to keep your personal assets safe.
When you use the same accounts for both your personal and business purposes, you put your car, home, and other valuables at risk in case your business is sued.
You’ll also need to get a business credit card that helps separate your business expenses from personal expenses. This credit card can also help build your business’s credit history, which you can later use to raise money later.
Set Up Company Accounting
Having a good understanding of your business’s financial performance is critical to its success. You’re going to need to keep detailed and accurate financial records. Doing so helps simplify your tax filing.
Obtain the Necessary Licenses and Permits
Every business needs the appropriate licenses and permits to operate legally. Without these credentials, you can face hefty fines or even have your business shut down.
Find out what the licensing requirements are at both state and local levels. You can get this information by visiting your city, town, or county clerk’s office.
Purchase Business Insurance
Just as you need permits and licenses to operate, business insurance is a requirement before you start remodeling houses for clients. Your business insurance is meant to protect the financial wellbeing of your business in case the unexpected happens.
There’s a wide variety of insurance policies that help guard your business against different risks. Where you’re unsure about what risks your remodeling company faces, start with general liability insurance. If you’re going to hire employees, you also want to purchase ample workers’ compensation insurance.
Work with a reliable insurance agent to choose the right insurance policies for your company.
Define Your Brand
A company’s brand refers to what the enterprise stands for and how the public perceives it. You want to create a solid brand to differentiate yourself from the competitors.
One way to make your brand stand out is by having a unique logo. If you’re not confident about designing one yourself, hire a professional to do it for you.
Another way to promote your business is by providing highly satisfactory customer service. Consider doing something that your competitors aren’t. For instance, you can opt to provide real time remodeling estimates for your clients.
Invest in Online Presence
Having an online presence in today’s highly competitive business world is a necessity. The vast majority of consumers head online to search for service providers. You want to make sure that they can find you there.
Go out of your way to make sure that your website delivers an exceptional digital experience to users. It’s the only way to get customers to stick around long enough to convert.
Besides your website, create company profiles on various social media platforms. Use these platforms to keep both your existing and potential clients engaged.
Launch Your Home Remodeling Company Without Hassles
For anyone with a passion for home improvement, a home remodeling company can be a highly satisfying venture. The tips we’ve shared in this guide can help you start your venture and set it on the right path to success.
Are you interested in reading more great content on how to run your home remodeling venture? Please, keep visiting our blog.