How to Start a Home Renovation Business
For anyone with a good bit of experience in the construction industry or as a handyman, starting a home renovation business can put that experience to work for yourself. Aside from tools, the most important things to acquire are the proper licenses and insurance. Once outfitted legally, you can begin the hardest part of starting a home renovation company--finding your first clients.
Decide on which type of ownership structure your company will have: sole proprietorship, LLC, S-corp or C-corp. Spend the money and consult an attorney who specialises in construction law. You can find one through your local home builder's association. You should also have an accountant, who can advise you on the tax implications of each type of ownership structure. Look for an accountant who specialises in the construction industry.
Purchase bookkeeping software and learn to use it. This will simplify your accounting, estimating and billing tasks, keep all of your information in one place and greatly reduce the chances of accounting or clerical errors. QuickBooks puts out a Premiere Contractors Edition that is fairly standard issue stuff for start-ups. There are other good options as well, including CHS, Timberline and UDA Construction Suite. See the resources section for links.
Acquire a license to perform home renovations. It may be called a general or residential contractor's license--the name can vary from state to state. Check with the Secretary of State's office for your state. In most cases you will have to take an exam to prove your familiarity with common building codes and practices and most states will also require you to have worked for a year or two under a licensed builder or home renovator.
Purchase a business license for the municipality where you will have your office, even if your office is located in your home. Be aware that each different municipality or county will most likely require a business license, so be sure to ask at the government centre in any new jurisdiction that you are considering working in. Construction-related companies will usually have their own separate classification and fee structure, so expect to pay a little more than a local retail store.
Buy a general liability insurance policy. Liability insurance will protect you in cases of tool and material theft as well as personal injury of nonemployees and property damage or accidental death of someone on one of your job sites. If you are planning on having more than three employees, a worker's compensation policy is also required. This policy will cover injuries to your employees only. Nonemployees will be covered by the general liability insurance. Shop around to compare quotes, but most companies just starting out will not find much difference in policy premiums.
Purchase any tools that you may not already own. For a home renovator, this includes just about any tool currently available in the big box home improvement centres, including but not limited to a mitre saw, portable table saw, air compressor, finish nailer, brad nailer, finish stapler, framing nailer, siding nailer, roofing nailer, router, belt sander, palm sander, corded and cordless drills, circular saw, jigsaw, reciprocating saw, various air hoses and extension cords, standard hand tools, levels, ladders and a good work truck or van. Also consider a tool trailer to keep everything organised on the job site.
Look for clients. Local magazines and newspapers are a good place to run ads, and don't forget to make business cards. Once you have them, hand them out like candy. People can't hire you if they don't know you exist. Also check with larger neighbourhoods, as they often have monthly or quarterly publications that accept ads. Make magnetic signs for your vehicle, or have your logo and information painted on your truck directly. Network with your friends and anyone you meet and let them know what you do. Another option is to make the rounds of architects and interior design firms as many of them keep a list of local home renovation companies to share with their clients.
- Contractor's license
- Business license