What Do You Need to Start a Renovation Company?
If you’re a home renovation expert interested in becoming your own boss, one of the first things to consider is, ‘What do you need to start a renovation company?’ Before we get into that, you’ll be pleased to know that the home improvement and remodeling industry is booming. According to Allied Marketing Research, the global market size for home improvement services was over a whopping $300 billion. The truth is many homeowners need professional help to achieve their dream homes or to make their homes more comfortable and functional. Although DIY home renovations are a thing, there’s no substitute for professional work, especially where major renovations are concerned. So, ‘What do you need to start a renovation company?’ If you’re a remodeling contractor interested in running your own home renovation business, here’s what you need to know.
A Business Plan
The purpose of a business plan is to help you come up with a workable strategy for executing your business idea. In the beginning, the concept of opening your own renovation company needs to be fully fleshed out, so you understand the scope involved and the steps you need to take to launch your business successfully. A good business plan can also help you identify any potential roadblocks and the viability of your idea. When coming up with a business plan, you’re essentially describing your business, the services it will provide, how it will earn money, and how you’ll finance it. Your plan should cover many other essential details like leadership and staffing and the operations model that is crucial to the successful running of your company.
Your business plan doesn’t have to be strictly formal, but it’s important to have at least a basic plan. This helps with strategic planning since you can quickly figure out how much to invest in your business in terms of money, time, and other resources. It’s also a perfect opportunity to evaluate your ideas and determine which ones are the most feasible and more likely to be profitable. When writing a business idea, you’ll need to do a lot of research to better understand your ideal customers and competitors. The good news is that writing a business plan doesn’t have to be difficult since there are basic steps you can follow to map out your plan and eliminate the unknown.
First, you have to draft an executive summary (what your business is all about), then describe your company in more detail. You also need to perform a market analysis, determine the structure of the organization and its leadership, describe your products and services, and define your marketing plan. Additionally, you’ll need to identify your target audience, make a financial plan, and outline a logistics and operations plan. Having a detailed business plan means you have a tailored blueprint with all the key elements for the best first steps to take when establishing your company. In answer to the question of ‘What do you need to start a renovation company?’ – a business plan is a must-have.
Have your finances all figured out from the start. That’s because a lack of financial health can shorten the lifespan of your business. According to LendingTree, just over 18% of private sector businesses fail within the first year, and nearly 50% falter within the first five years. As a new business owner who wants to know, ‘what do you need to start a renovation company?’ – the most important answer is ensuring you have enough cash flow to sustain day-to-day operations. Most businesses will need small business financing to raise enough capital, so start by exploring your options.
Make sure you only borrow what you can afford to pay back. An important part of maintaining good cash flow is to get your Employer Identification Number (EIN), which allows you to open a business bank account, hire employees, and file for taxes. Once you have a business account with the right banking partner, you might even be able to obtain a line of credit, which is handy for small, daily expenses that need to be paid off to keep your business afloat. To get the numbers right when running your business, also consider setting up an accounting department to ensure you always stay on top of your business finances.
Skills and Knowledge
Besides a business plan and working capital, ‘what do you need to start a renovation company?’ Well, it goes without saying that you’ll need some insight into how the remodeling industry works. More specifically, you’ll need a good idea of the services you’ll be offering. You can provide specialty services such as kitchen cabinet installation. Or you can start a full-service company that offers a wide range of services, such as interior design, installation of fitted kitchens, water damage cleanup, pool refurbishment, and frameless glass shower door install. So as you can see, there are many options when it comes to the services your company will offer.
It’s usually a good idea to start small and expand slowly as your market penetration increases. In any case, trying to offer every type of renovation service might not be sustainable. This can place a great strain on your operations, increasing the risk of failing to meet customer expectations. Therefore, find out where your best skills lie and make your company the focus of that. You also need to look around to see if the services you plan to offer are in demand. If you operate in an area where the upper class lives, then you need to offer high-end and upscale services to match the quality demands of your customers.
Suppliers and Subcontractors
The next step is figuring out which reputable suppliers and subcontractors to work with. It’s essential to do your due diligence and find reliable and trustworthy suppliers and subcontractors. When looking for suppliers, you’ll need more than the local home improvement store in town. Sometimes you may need to get your hands on specialty materials or tools, in which case you need to find a supplier dedicated to meeting the needs of home improvement companies. You may need to have several suppliers on your list, depending on what you need. For instance, there are suppliers for tile and flooring, doors, windows, heating and cooling, lighting, roofing, landscaping materials, home decor, furniture, tools, and everything in between.
Besides working with the right suppliers and vendors, you also need to work with the right subcontractors. That’s because you can’t do everything yourself, and there are other skilled professionals who can do a better job in specific aspects of home improvement projects. You may need to hire an AC contractor or a siding contractor to help you with completing a client’s project. Whether you need to work with septic system contractors or plumbing contractors depends on the scope of each project and the services you offer. If you’re wondering, ‘What do you need to start a renovation company?’ Then keep in mind that having a reliable supplier or subcontractor is crucial to helping you build a good reputation for quality craftsmanship.
A Legal Business Entity and Name
Before you can officially launch your renovation company, you need to choose a business structure that works for you. The main options when it comes to business entities include sole proprietorships, general partnerships, limited liability corporations (LLCs), and C corporations. Sole proprietorships are ideal if you’ll be working alone and are simple and cheaper to establish. With a general partnership, you’ll be going into business and sharing the profits with another person.
On the other hand, a limited liability corporation can feature one or more owners, while a C corporation is more complicated with owners being named as shareholders. Besides the type of company, have you given any thought to the name of your renovation company? The ideal company name should be simple and straightforward and should be a reflection of what your company is all about.
Licensing, Insurance, and Permits
One of the most important answers to ‘What do you need to start a renovation company?’ is that you need to do everything possible to ensure your company is legit and above board. For starters having a contractor’s license and other vital certifications necessary for our particular specialties is important. This is usually a requirement in most states, along with the requirement to have all the necessary permits for performing some of the renovation work.
Additionally, business insurance is also important, including general liability insurance and workers’ compensation. General liability insurance covers damages to a client’s home or injuries sustained on your work site. Workers’ compensation will cover employee medical bills should any of your employees get injured while on the job. You never know when such unfortunate incidents occur, so you’ll have more peace of mind from knowing your business is financially protected.
A Business Website and Phone System
In this day and age, having a business website is requisite. Your renovation company shouldn’t be the exception. You should consider creating your business website once you have a better understanding of your brand, its colors, design, and company logo. That way, you can ensure there’s brand continuity in the design of your website. Why is having a business website important? A solid online presence with high visibility means your company quickly gets noticed when people search online for your visitors. With the right content marketing strategy that incorporates the principle of SEO, your rankings in search engine results are more likely to increase.
The higher your rankings, the more organic traffic you attract. You can leverage your business website for many things, and one of them is to create the right impression. If you’re not familiar with the web-building process, you can always hire professionals to provide you with a well-designed website in a fast load time. Your website design should be attractive, easy to navigate, and simple enough to encourage visitors to stick around once they land there. Make sure you have all the details that your customers are looking for. It’s standard practice to have an About Us page, a home page, a page with your contact details, and another that details the kind of services you offer, whether that’s garage door services or custom closet installation.
Besides having a well-designed website, you should also have a phone system setup that’s separate from your personal contact details. A dedicated phone system for your business also makes it more legitimate and makes it easier for customers and potential customers to get in touch with you.
When you ask, ‘What do you need to start a renovation company?’ It goes without saying that you’ll need a constant flow of clients to support your business, but the more important question is, what’s your plan for securing the clients you need? The first crucial step is knowing your market. The easiest way to get valuable insight into the market is to look at your competitors and the services they’re providing. Once you know what your customers are looking for, you need to come up with a marketing campaign that will allow you to build your brand over time. Your marketing plan can include strategies like content marketing, pay-per-click ads, social media advertising, and print TV/advertising.
Now that you know the top answers to ‘What do you need to start a renovation company?’ the next step is – action! Taking action and making sure you have everything you need to get your business off the ground is how you get started with achieving your business goals. That said, taking action is all well and good. But before you dive into the process of running your business, it’s important to evaluate all the needs and requirements. A little planning can go a long way to ensure the success of your new business. Hence, it’s recommended that you consider the question, ‘What do you need to start a renovation company?’ Don’t be afraid to add to the list of needs above because your business is unique. As such, you can expect it to have additional requirements and needs.