Are you ready to start a remodeling business or home renovation company? General contractors are in demand in many areas of the country. As more homeowners choose to fix up their properties, now might be a great time to make your home renovation startup dreams a reality!
This guide is designed to help home renovation contractors build a successful business. From getting licensed and buying contractor insurance to building relationships within the industry, this article will help you start off on the right foot.
1. Become a licensed contractor
General contractors must have a license to work in most states. The requirements for getting a license vary, but you will generally be required to:
- Have a minimum amount of trade work experience
- Pass relevant exams
- Show proof of General Liability insurance and Workers’ Compensation coverage (if applicable)
- Pay application and license fees
- Renew your general contractor license every few years
It may be illegal to work as a home renovation contractor without a general contractor license. It’s wise to check the requirements in your area before accepting your first job.
Recommended reading: Handyman vs. General Contractor: What’s the Difference
2. Small business basics
With years of experience under your belt and a general contractor license in hand, you’re technically ready to launch your home renovation startup. However, you may want to do more prep work to help set yourself up for success.
Write a business plan
A business plan is a written document that helps guide your business decisions. It contains information about your business, including your business goals, market research, budgets, cash flow projections, and marketing plans. A well-developed plan can help you track and measure your success as your business grows.
This may sound complicated, but it doesn’t have to be. Your first business plan might be simple, just a few pages long. As you get closer to launch day, you may be able to add more details to yours. A business plan is also a ‘living’ document that is meant to be updated and revised over time as your business grows and changes.
There are many guides available online to help you write your own business plan. You may also enlist the help of an accountant, marketing specialist, and other professionals to help you draft specific sections.
Consider business insurance
You may need certain types of contractor insurance, such as General Liability insurance, to get a general contractor license. However, you might consider many forms of coverage to protect your business, even if they are not mandatory.
General contractors often consider:
- General Liability – Also referred to as Commercial General Liability (CGL) or “slip and fall coverage”, this insurance can protect your business against bodily injury or property damage lawsuits from outside parties.
- Professional Liability – Also known as E&O insurance, this protects your business against claims of negligence, misrepresentation, or mistake, as well as document or paperwork errors.
- Business Owner’s Policy – Often shortened to BOP, this is a combination of policies, combining covers such as General Liability insurance and business personal property coverage, to help protect small businesses from costly interruptions to service.
- Workers’ Compensation – This coverage provides protection for employers if an employee suffers a work-related illness or injury.
Creating an online presence
Many homeowners head online to find general contractors in their area. Creating and maintaining a professional online presence could help customers find your business. You may consider:
- Your business website – There are many free, user-friendly sites available to help you build and host a professional business website. You can also hire a graphic designer or web developer to help you do this.
- Social media accounts – Creating business accounts on one or two social media platforms could also help you reach new customers. Sites like Facebook and Instagram are popular with many demographics and are great places to showcase before and after photos from projects.
- Online reviews – Like a word-of-mouth referral, positive online reviews can help recommend your services to new customers. Consider asking happy clients to leave a review on Google, Yelp, or another site.
- Search Engine Optimization (SEO) – This is how websites make it to the first page of search results. A marketing or SEO specialist could help your site rise in the ranks!
Marketing & advertising
Creating a steady stream of customers is essential to building success as a contractor. There are many ways to market and advertise your business, with options to suit just about any budget:
- Online ads
- Mailbox flyers
- Radio and TV spots
- Local sponsorships
- Booths at home reno fairs and other local events
A marketing specialist can help you create a marketing plan, as well as professional-looking ads and branding that help you stand out from your competition.
3. Industry relationships
The people you know within the home renovation field could help you create a successful home renovation startup. They can provide advice, a helping hand, or better pricing on the materials you need.
- Mentors – If you started your home reno career as an apprentice or subcontractor, you might know many experienced contractors who can help you get your business off the ground. They may give you helpful advice or refer clients your way.
- Subcontractors – General contractors typically specialize in one or two areas and subcontract work to other contractors. For example, if you’re an electrical whizz, you may need a trusted carpenter and plumber to finish a bathroom remodel.
- Suppliers – Successful contractors look for savings wherever they can. Negotiating with your suppliers could help you lock in great prices on materials you buy and bulk or secure free shipping and delivery.
4. Building your home renovation company
When you start a remodeling business, you can expect to put in many hours of hard work to make it a success. This begins with getting the correct licenses and contractor insurance, as well as creating a marketing plan and building strong relationships with others in the industry. With time, you will hopefully build a successful home renovation startup!
The number of quotes provided varies between products, occupations and other underwriting factors determined by the insurers.
This information is a general guide only and does not take into account your objectives, financial situation or needs. Always check with your local licensing board when getting or renewing your general contractor license to ensure you are meeting their current licensing requirements.
© Copyright 2022 BizInsure LLC, 2015 ALL RIGHTS RESERVED BizInsure LLC; CA DBA: Simple, Smart, BizInsure Insurance Agency LLC; NY DBA: BizInsure Services LLC; NH DBA: Simple, Smart, BizInsure Insurance Agency; PA DBA: BizInsure Services LLC. 2950 Buskirk Ave Suite 300, Walnut Creek, CA 94597. License #0H81929