Whether we are in a recession or the economy is booming, starting a remodeling business can be a very profitable venture. Most people interested in this type of business have carpentry skills and are familiar with other aspects of the construction trade. Not saying that you have to have carpentry or construction trade skills to start a remodeling business, just that most do.
I am writing this article on starting a remodeling business with the assumption that most who read it will have carpentry and construction skills. If you do not have home improvement skills you may have to hire employees or sub-contractors that do.
Time to take inventory. What are your skills, strengths and weakness’s? When I first started my remodeling business I had not worked as a carpenter for quite a while. When it came to siding, my experience was in cedar wood siding. Where I live now everyone wants vinyl siding for their remodeling projects. My answer to that was to hire a fellow that was very good at installing vinyl siding and I learned from my employee. Which actually brings up more questions. Do you want to do the remodeling work yourself? Do you want hire employee’s or sub-contractors? Do you want to manage the business and let others do the manual labor?
Even if you have no money, you can still hire sub-contractors to do the remodeling jobs that you contract for. They get paid when you get paid. The point being, even if you are broke does not mean you have to do the manual labor. I know of a guy that lost his job as a window salesman when the company he worked for closed down. He decided that he really liked the home improvement business. This fellow went out, found a window supplier, started knocking on doors until he had a sale, hired sub-contractors to install the windows and is now quite wealthy.
In assessing your remodeling and business skills it is important to be honest with yourself. What skill are you lacking in and of those, what skills in the realm of remodeling or business are you willing to spend the time to improve on?
If you have the remodeling skills, a truck full of tools and are sick of working for someone else, start trying to get remodeling jobs. Some states and cities require that you get a license to start your new business, some will require that you take a test to prove your knowledge in the particular remodeling or home improvement specialty you intend to work. You can usually get that information through the Secretary of State and your local city hall. I would recommend that even if you do not need a special license to start a remodeling business that you consider formally starting your business as a Limited Liability Company and not as a sole proprietor. Approximately ninety percent of all business fail in the first year. Setting up as a Limited Liability Company insures that if the company gets sued or goes bankrupt, it does not necessarily mean that you will lose everything you and your family own. Setting up a Limited Liability Company is usually done through the Secretary of State and in some states the paperwork can be done on line. In a previous article I wrote on how to “Obtain A New Credit File” I included a section on setting up a Limited Liability Company. If in doubt contact a local attorney for advice.
If you are a carpenter or are sufficiently skilled in the remodeling business I would recommend that in the evenings you study books on business. A good one to start with is Og Mandino’s “The Greatest Salesman in the World.” It is not a long book, yet is considered one of the best books on sales ever written and if you can’t sell, you will not be able to get work. I am not talking high pressure car sales, just the basics. One of the hardest things most carpenters seem to misunderstand is the attitude change needed to become a businessman. Once you hang out your shingle, people expect a different level of professionalism.
If you are a carpenter and have lived in the same area for a while, chances are you will not have to try to hard to get the first few jobs. I have a friend that has lived in the town I am in for his whole life, 44 years. He always gets plenty of referral work and stays very busy in the summer. Almost every winter he has no work and barely makes it. I told him to get a listing in the phone book under remodeling, home improvements and general contractors, one line will do it. He understands construction and remodeling, but refuses to learn the business end of it. Another guy I know has a decent reputation for his work, not great, just decent. Every year his business gets bigger. He is not only skilled at remodeling, but has been studying business for years.
One of the biggest problems many people have when starting a remodeling or home improvement business is deciding what to charge. In my area we have a Lowe’s and a Menard’s store. Both carry books on how to bid and how much to charge for most remodeling and home improvement tasks. The local Office Depot, Office Max or Staples will have forms you can use to do your estimating and bidding. I also ask around at the local supply houses to find out what other people are charging. The more information you have the better. When you start bidding you should only be getting about 25% of your bids accepted. If you are getting to much more than that, you are bidding to low.
Another problem many have is deciding on a niche in the remodeling business. Some guys like to do a little bit of everything as it keeps things from getting boring. The problem with that is that is it requires to many different tools, some very expensive. The other problem is you can’t have 60% of your work be roofing, 30% siding and windows and 10% ceramic tile and expect to be that good or fast at the tile work. Now it may be that you have to do something like the tile work in the winter, I am just saying pick your niche in the remodeling business and market your business in that niche. Personally I specialize in energy efficiency. I do most of the things my friends do, siding, doors and window, but I also seal and insulate homes. Where they sell siding, doors, windows etc., I sell warm cozy draft free homes with low energy bills. Set your remodeling business up so that it is different from the average remodeling company.
Starting your own remodeling business can be very rewarding. The potential for financial gain is a lot better than swinging the hammer for someone else. Make your plan and work your plan. Good Luck!
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