Tips to starting a successful renovation business
Tuesday, March 24, 2015
If you love design and décor, and you absolutely love the challenge of renovating homes, then this is a great time to start thinking about owning a business. There is more demand for a good renovator today than ever before.
A winning combination of the improving economy, better job markets and more homes in the market have opened up the remodeling and interior design markets. Professionals around the country are relaxing their rigid business rules to invest and expand more. They see more opportunities ahead and positive signs that the recovery will stick this time round.
Home improvement chains like Home Depot and Lowe's are gearing up for a good year. With more Americans poised to spend on home renovations, these stores are excited about increased sales and profits of more than 5 percent.
According to a new Houzz Barometer study conducted earlier this year, about 40 percent of related businesses reported a 15-24 percent rise in revenues, while 10 percent showed more than 50 percent growth in 2014. All have admitted that 2015 looks even brighter with hundreds of job orders lined up — so much so that they even have to turn down bookings.
The study consisted of more than 5,000 professionals, including builders/remodelers, interior designers, cabinet manufacturers, architects and landscape professionals. With 70 percent of businesses reporting a rise in new business, things are definitely on the mend, creating a positive market for newcomers as well.
Renovators have been typically self-employed individuals, but with the way the market is growing, experts think this industry will expand into more small- and medium-sized businesses. According to an annual survey by LightStream, more than 57 percent of homeowners plan to invest in home improvement projects in 2015.
This means more than enough jobs for renovators, both outdoor and indoor experts. Out of the 57 percent, it seems more (43 percent) are inclined toward outdoor improvements — decks, patios, backyards or landscape remodels — while about 29 percent are thinking of kitchen and bath remodeling.
For those looking to start a new business in renovation, here are some basic pointers:
- Create a startup budget to invest in all the necessary tools of the trade. Once you have a few jobs under your belt and can show solid projections, you can always opt for a loan.
- Keep abreast of the latest happenings in the industry, along with the millennial customer requirements.
- Hone your innate home improvement skills to perfection before you start publicizing big time. Start with low-value jobs or even free ones for your friends to fatten your portfolio. This will help you beat the competition later.
- Spread the word around with excellent marketing and communication skills. It's a tough market, and networking is important — social as well as local.
- Make sure you have an impressive and easily navigable website. Creating a website is easy and costs next to nothing, but it may be worth your while to hire a professional to do it.
- Get a list of vendors lined up to handle the more physical aspects of the job like plumbing, painting, flooring and electrical work, among others.
Check the more serious to-do list:
- Attend renovating vocational classes and contracting programs to get more knowledge on the subject and the industry at large.
- Take the renovator's licensing exam to get the mandatory licenses in your state and locality.
- Work with a lawyer to get other business licenses if you are expanding from an individual consultant to a firm. You can also work with an agent to know about insurances pertinent to your business.
- Register your business or your name in the local and state business directories, which gives you instant credibility.
- Get the certification from the National Association of the Remodeling Industry (NARI) to get proper accreditations.
You don't have to do the whole job every time. You can opt for specialization, but keep in mind that customers veer toward businesses that offer a turnkey solution. It is cheaper for them, less time-consuming and easier.
If you are better at designing than physical labor, don't fret. Make a list of the good vendors with whome you can partner and offer your customers holistic new looks for their homes.
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