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How to Start a Home Renovation Business

If you are passionate about home improvements, starting a home renovation, repair, or re-construction business can be an exciting and rewarding venture. There’s nothing quite like being your own boss while doing something meaningful and fulfilling. Play your cards right, and you’ll also get to make a decent income and career out of it. 

The home renovation space is teeming with lucrative opportunities. Many homeowners will pay top dollar for room additions and improvements, bathroom and kitchen makeovers, landscaping , roofing and flooring, décor, HVAC services , and more. The US home remodeling market grew to $340 billion in 2020. And it could reach $450 billion by 2027, with the Do-It-For-Me (DIFM) segment taking a 60+ percent market share.

So, where do you begin? Starting any business calls for careful planning and finessing. Even a small contracting business has several moving parts. And it’s your job to put everything together that makes the business work.

This is more than a guide on how to start a home renovation business. It will take you through all the necessary steps, worthy considerations, and pitfalls to avoid when establishing a home remodeling business.

Let’s get started.

Step-by-Step Guide to Starting a Home Remodeling Business

Before you make any moves toward starting your own home contractor business, it’s important to understand what you’re getting into. Get the lay of the land and learn what to expect. So, take a step back and ask yourself the following questions:

• Why am I getting into the business?
• How will I be involved in the business?
• What will I sell?
• Where will I sell and to whom?
• What unique value does the business bring to the market?
• Who are my potential competitors?
• Is my idea financially feasible?
• What will it take to make the venture work?
• How big can the business really get? 
• What challenges lay ahead? 

Conduct some rough preliminary research into the home remodeling scene in your target area or market. You need a good picture of the market’s size, dynamics, and potential competitors. Find out what consumers want, what they’re getting, and how much they’re paying for it. After that, you can identify the market holes or niches that your business could fill. Then build your business model and unique selling points from there.

Going into any business also requires the right mindset. For starters, check your expectations, anticipate challenges, and set realistic and achievable goals.

With that in mind, here are steps to start a remodeling business.

Draft a Solid Business Plan

A business plan is a formal document that serves as a roadmap for your new business. It’s a dynamic guide that describes how to structure, run, and grow the enterprise. Business planning essentially fleshes out your business idea and represents it as a digestible and actionable blueprint. This should help you get an overview of the renovation business and spot its potential strengths and challenges.

There are generally two ways to write a business plan. One, you can draft a comprehensive traditional business plan detailing every aspect of the business. But for a small home improvement business, it’s better to keep things simple at first with a lean business plan. This type of business plan is more compact and concise. It covers just the core business elements in a few short pages.

These are the key components you should include in your lean business plan:

• Business overview – Give a general description of the business model.
• Key activities – Outline the home renovation services you’ll be offering and your role in the business. Will you be doing the work yourself or contracting outsourced professionals?
• Resources available – What key resource will your home renovation business leverage? It could be your skills and expertise in the home improvement industry, a capable labor force, construction/renovation equipment, or a proprietary asset.
• Value proposition – Explain the unique value your business brings to the consumers. These are your unique selling points (USP), the attractive qualities that distinguish you from competitors.
• Customer segments – Narrow down your target customers. Your ideal customer might be a fresh homeowner looking to turn their new house into a home. Or anyone wanting to raise their property’s value for an upcoming appraisal or sale.
• Revenue streams – Paint a picture of how the business will make money remodeling homes.
• Cost structure – Design a cost structure fitting your business model and its services. More importantly, set an affordable and competitive price point.
• General financial plan – Work out what it’ll cost to launch and run the business, how you’ll get the money, and what the cash flow will look like.
• Goals and objectives – You should have a clear vision for your new business. How far do you want to take it?

Pick a Name and Get Registered

Choose a catchy name for your business and get it registered in your state. However, there’s much more to registering a new business than simply picking a killer name.

First, you have to choose a business structure under which to register your home remodeling venture. There are several business structures to choose from. But sole proprietorship and LLC (limited liability company) are the best structures for a small home renovation business.

Registering a Sole Proprietorship

A sole proprietorship is a business that’s owned and controlled by one person. It’s also the simplest of all business structures. To register a sole proprietorship, you can either put up your own name or pick a fictitious name by filing a DBA (“doing business as”). Registering an LLC

Unlike a sole proprietorship, an LLC separates your personal and business identities, legally speaking. That means you won’t be personally liable for the business’s legal or financial obligations, such as debts and lawsuits. However, registering an LLC is a lot more involved than a sole proprietorship.

With an LLC, you’ll have to nominate (depending on your state) a “registered agent” to submit and receive legal papers on your behalf. You’ll also have to file two documents: Articles of Organization (also known as Certificate of Formation or Certificate of Organization) and an LLC Operating Agreement, though this is not required in every state.

In either case, you also need an Employer Identification Number (EIN) to hire workers, file federal taxes, open a business bank account, and apply for business permits. The federal government also requires every business with employees to have unemployment, workers’ comp, and disability insurance. Remember, business insurance laws vary from state to state. But compulsory or not, insurance is essential in the home renovation business. So, consider insuring your business anyway.

Learn more about business structures and registration in this article by the SBA.

Secure the Necessary Permits and Licenses

Every business needs a license in order to operate anywhere in the country. Business licenses are issued by local government agencies, usually the city or municipal office. But a license only allows you to do business. You’ll also need various business permits to carry out home renovation projects in specific states, cities, municipalities, or zones.

The permit requirements for your home contractor business will depend on its specialization and location. You may also need temporary work permits for specific projects. But generally, most states and cities require builders and contractors to have a professional license/certificate, health and safety permits, and general contractor permits. Check with your local industry and government authorities to see the permits you’ll need.

Nail Down the Business Logistics and Resources

By this stage, you already have a fundamental business framework. Now is the time to gather all the resources you’ll need to get going. This will obviously depend on your business model, size, and service scope. Top-of-the-list items might include:

• Funding – Get the funds to start and run the business until it can stand on its own. You can bootstrap the venture or apply for financing from banks or alternative lenders.
• Labor – Start hiring subcontractors, handypersons, project managers, etc., if needed. But you don’t have to make permanent hires right away. It’s safer and more cost-efficient to hire staff on a contract basis at first.
• Suppliers – Find the best suppliers for any construction, plumbing, or electrical materials you’ll need for various home renovation projects. Remember to consider reliability and quality above pricing when selecting suppliers.
• Assets – Acquire all the equipment, machinery, and tools you’ll need to start work (specialized construction equipment, vehicles, hand tools, etc.). Buy what you can afford and hire the more expensive machinery, such as trucks and power tools, only when needed. These assets can also include the tools needed to run a business, like an estimating and invoicing app, or setting up a template in Excel.

Define Your Remodeling Business Brand

Branding is a way of setting your business apart from its competitors. It’s a means for customers to identify and associate with your business. Branding also forms the basis for marketing. Anything that identifies your business is part of your branding, from its name and logo to USPs.

However, there’s more to branding than just the business name and logo. Branding extends beyond mere recognition to the customers’ perception of the business. Customers prefer to engage with the businesses they trust, and you can build that trust through strong branding.

Your brand should represent what your renovation business stands for, expressing its qualities, strengths, values, and personality. In other words, instill customer confidence through your business’s presentation. Make assurances, quality guarantees, and value-added advantages part of your business identity.

Start Marketing

Once everything is set up, you can start a rigorous marketing campaign. Focus your marketing efforts on spreading brand awareness and generating leads to score your first customers. That means presenting your brand to the relevant audiences and getting people excited about signing up for your home remodeling services. You can do this in any number of ways.

Here are some proven marketing ideas worth trying out:

• Create a website and optimize it for local search within your service area.
• Get your business on social media: Facebook, YouTube, Instagram, Nextdoor, Twitter, and LinkedIn.
• Involve yourself in local community activities.
• Brand your vehicles, machinery, and work sites.
• Cold pitch to homeowners using direct mail.
• Hand out flyers and branded merchandise at local gatherings and events.
• Get your business listed in local and online directories.
• Join various home remodeling and construction groups/associations to build your credibility and leverage their advertising muscle.
• Consider taking out paid ads in local publications and on the internet.
• Entice first-time customers with irresistible home renovation discounts and offers.

Avoid These 8 Rookie Mistakes

Fundera calculates that about 20% of small businesses fail in their first year. Meanwhile, about half never make it past five years. Worryingly, start-ups in the construction industry have relatively low survival rates. Only 35% of small construction businesses make it through their fifth year.

These grim figures are not meant to scare or discourage you from starting your home renovation venture. In business, failure is always an opportunity to learn, even the failures of others. And there’s a lot you can learn from failed businesses when starting your own. On that note, here are some of the costly mistakes that can easily run you out of business as a home improvement contractor:

Starting with Too Little Cash

Running out of cash is one of the top reasons many small start-ups fail. Don’t underestimate your business’s financial needs. Ensure you have enough capital to begin with and avoid unnecessary purchases or drawing money out of the business during its infancy.

Underestimating the Competition

Understand your competitors before going up against them. The home improvement sector is often a highly crowded commercial space. So, carefully gauge the possibility of carving out a niche for your business. Check whether your value proposition and unique selling points are a match for what’s already available in your target market.

Lacking a Solid Business Plan

Starting any business without a solid plan is like wandering blindly into dangerous waters. A good business plan lays out a clear path to your goals, sets up contingencies around potential obstacles, and puts guardrails to keep the business on track to success.

Ignoring Customer Satisfaction

Praise for home renovation businesses largely spreads through word of mouth and referral from past clients. Therefore, customer satisfaction is a big part of passive marketing. Plus, happy customers are more likely to contract your business again in the future. The rules of customer satisfaction are pretty simple: work on customer service, promise and deliver, and never compromise quality.

Doing Everything Yourself

A contractor business doesn’t have to be a one-man show. Besides, you surely can’t expect to juggle every aspect of the business yourself. Don’t hesitate to seek wise counsel, outside financing, subcontractors, and labor whenever you need it. Surround yourself with people and resources that support your enterprise.

Setting the Wrong Price

Writing price estimates for home renovation services is a delicate balancing act between competing and profiting. The trick is to set a price that not only best represents the value of your services but also fairs well against competitors’ benchmarks.

Poor Project Management

Develop an efficient project management strategy that prevents delays, cost overruns, and poor-quality delivery even when handling multiple projects at a time. Also, accept only the projects you’re sure can be completed in time and within budget.

Focusing on Rapid Growth

This may seem counterintuitive, but rapid growth can lead to all sorts of problems. Expanding too fast can deplete your cash reserve faster than the business can replenish it and introduce sudden risks, choices, or opportunities you were not prepared to handle. Aim for homogenous and organic growth that’s more sustainable and manageable.

Wrapping Up

Running your own home renovation business can be rewarding and liberating. However, these rewards and freedom come with great responsibility. It takes a lot just to start a business, let alone run it for years and years. But although it may be challenging, it becomes easier once you break everything down and take it one step at a time.

Once you’re ready to get started, use this guide for help and let Joist save you time, win more jobs, and get paid faster with quicker remodeling estimates , professional invoices, and payment tracking.

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Home Improvement Business Plan

The extensive marketplace and indefinite opportunities for expansion make home improvement a lucrative business venture to undertake.

Anyone can start a business, however, to captivate the highly competitive market space, one needs a comprehensive business plan. It will help you secure the funding and attain the desired growth potential.

Need help writing a business plan for your home improvement business? You’re at the right place. Our home improvement business plan template will help you get started.

Free Business Plan Template

Download our free business plan template now and pave the way to success. Let’s turn your vision into an actionable strategy!

• Fill in the blanks – Outline
• Financial Tables

How to Write A Home Improvement Business Plan?

Writing a home improvement business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan:

1. Executive Summary

An executive summary is the first section planned to offer an overview of the entire business plan. However, it is written after the entire business plan is ready and summarizes each section of your plan.

Here are a few key components to include in your executive summary:

Introduce your Business:

Start your executive summary by briefly introducing your business to your readers.

Market Opportunity:

Products and services:.

Highlight the home improvement services you offer your clients. The USPs and differentiators you offer are always a plus.

Marketing & Sales Strategies:

Financial highlights:, call to action:.

Ensure your executive summary is clear, concise, easy to understand, and jargon-free.

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2. Business Overview

The business overview section of your business plan offers detailed information about your company. The details you add will depend on how important they are to your business. Yet, business name, location, business history, and future goals are some of the foundational elements you must consider adding to this section:

Business Description:

Describe your business in this section by providing all the basic information:

Describe what kind of home improvement company you run and the name of it. You may specialize in one of the following home improvement businesses:

• General home improvement business
• Kitchen and bathroom remodeling specialists
• Painting contracting
• Flooring Companies
• Home automation contracting
• Describe the legal structure of your home improvement company, whether it is a sole proprietorship, LLC, partnership, or others.Explain where your business is located and why you selected the place.

Mission Statement:

Business history:.

If you’re an established home improvement service provider, briefly describe your business history, like—when it was founded, how it evolved over time, etc.

Future Goals

This section should provide a thorough understanding of your business, its history, and its future plans. Keep this section engaging, precise, and to the point.

3. Market Analysis

The market analysis section of your business plan should offer a thorough understanding of the industry with the target market, competitors, and growth opportunities. You should include the following components in this section.

Target market:

Start this section by describing your target market. Define your ideal customer and explain what types of services they prefer. Creating a buyer persona will help you easily define your target market to your readers.

Market size and growth potential:

Describe your market size and growth potential and whether you will target a niche or a much broader market.

Competitive Analysis:

Market trends:.

Analyze emerging trends in the industry, such as technology disruptions, changes in customer behavior or preferences, etc. Explain how your business will cope with all the trends.

Regulatory Environment:

Here are a few tips for writing the market analysis section of your home improvement business plan:

• Conduct market research, industry reports, and surveys to gather data.
• Provide specific and detailed information whenever possible.
• Illustrate your points with charts and graphs.
• Write your business plan keeping your target audience in mind.

4. Products And Services

The product and services section should describe the specific services and products that will be offered to customers. To write this section should include the following:

Describe your services:

Mention the home improvement services your business will offer. This list may include services like,

• Design Consultation
• Project planning & management
• Installation and Remodeling Services
• Repair & maintenance

Home improvement products

: List down home improvement products offered by your business. This list may include,

• Building materials
• Hardware & tools
• Fixtures and fittings
• Paint and coatings

Quality measures

: This section should explain how you maintain quality standards and consistently provide the highest quality service.

Additional Services

In short, this section of your home improvement plan must be informative, precise, and client-focused. By providing a clear and compelling description of your offerings, you can help potential investors and readers understand the value of your business.

5. Sales And Marketing Strategies

Writing the sales and marketing strategies section means a list of strategies you will use to attract and retain your clients. Here are some key elements to include in your sales & marketing plan:

Unique Selling Proposition (USP):

Define your business’s USPs depending on the market you serve, the equipment you use, and the unique services you provide. Identifying USPs will help you plan your marketing strategies.

Pricing Strategy:

Marketing strategies:, sales strategies:, customer retention:.

Overall, this section of your home improvement business plan should focus on customer acquisition and retention.

Have a specific, realistic, and data-driven approach while planning sales and marketing strategies for your home improvement business, and be prepared to adapt or make strategic changes in your strategies based on feedback and results.

6. Operations Plan

The operations plan section of your business plan should outline the processes and procedures involved in your business operations, such as staffing requirements and operational processes. Here are a few components to add to your operations plan:

Staffing & Training:

Operational process:, equipment & machinery:.

Include the list of equipment and machinery required for home improvements, such as hand and power tools, power generators, air compressors, ladders, safety equipment, etc.

Adding these components to your operations plan will help you lay out your business operations, which will eventually help you manage your business effectively.

7. Management Team

The management team section provides an overview of your home improvement business’s management team. This section should provide a detailed description of each manager’s experience and qualifications, as well as their responsibilities and roles.

Founders/CEO:

Key managers:.

Introduce your management and key members of your team, and explain their roles and responsibilities.

Organizational structure:

Compensation plan:, advisors/consultants:.

Mentioning advisors or consultants in your business plans adds credibility to your business idea.

This section should describe the key personnel for your home improvement services, highlighting how you have the perfect team to succeed.

8. Financial Plan

Your financial plan section should provide a summary of your business’s financial projections for the first few years. Here are some key elements to include in your financial plan:

Profit & loss statement:

Cash flow statement:, balance sheet:, break-even point:.

Determine and mention your business’s break-even point—the point at which your business costs and revenue will be equal.

Financing Needs:

Be realistic with your financial projections, and make sure you offer relevant information and evidence to support your estimates.

9. Appendix

The appendix section of your plan should include any additional information supporting your business plan’s main content, such as market research, legal documentation, financial statements, and other relevant information.

• Add a table of contents for the appendix section to help readers easily find specific information or sections.
• In addition to your financial statements, provide additional financial documents like tax returns, a list of assets within the business, credit history, and more. These statements must be the latest and offer financial projections for at least the first three or five years of business operations.
• Provide data derived from market research, including stats about the home improvement industry, user demographics, and industry trends.
• Include any legal documents such as permits, licenses, and contracts.
• Include any additional documentation related to your business plan, such as product brochures, marketing materials, operational procedures, etc.

Use clear headings and labels for each section of the appendix so that readers can easily find the necessary information.

Remember, the appendix section of your home improvement business plan should only include relevant and important information supporting your plan’s main content.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks and automatic financials make it easy.

This sample home improvement business plan will provide an idea for writing a successful home improvement plan, including all the essential components of your business.

After this, if you still need clarification about writing an investment-ready business plan to impress your audience, download our home improvement business plan pdf .

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Frequently asked questions, why do you need a home improvement business plan.

A business plan is an essential tool for anyone looking to start or run a successful home improvement business. It helps to get clarity in your business, secures funding, and identifies potential challenges while starting and growing your business.

Overall, a well-written plan can help you make informed decisions, which can contribute to the long-term success of your home improvement company.

How to get funding for your home improvement business?

There are several ways to get funding for your home improvement business, but self-funding is one of the most efficient and speedy funding options. Other options for funding are:

• Bank loan – You may apply for a loan in government or private banks.
• Small Business Administration (SBA) loan – SBA loans and schemes are available at affordable interest rates, so check the eligibility criteria before applying for it.
• Crowdfunding – The process of supporting a project or business by getting a lot of people to invest in your business, usually online.
• Angel investors – Getting funds from angel investors is one of the most sought startup options.

Apart from all these options, there are small business grants available, check for the same in your location and you can apply for it.

Where to find business plan writers for your home improvement business?

There are many business plan writers available, but no one knows your business and ideas better than you, so we recommend you write your home improvement business plan and outline your vision as you have in your mind.

What is the easiest way to write your home improvement business plan?

A lot of research is necessary for writing a business plan, but you can write your plan most efficiently with the help of any home improvement business plan example and edit it as per your need. You can also quickly finish your plan in just a few hours or less with the help of our business plan software .

Can a good home improvement business plan help me secure funding?

Indeed. A well-crafted home improvement business plan will help your investors better understand your business domain, market trends, strategies, business financials, and growth potential—helping them make better financial decisions.

So, if you have a profitable and investable business, a comprehensive business plan can certainly help you secure your business funding.

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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Remodeling Business Plan Template

Dec.21, 2020

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Table of Content

Remodeling business plan for starting your own building company

Whether it’s about increasing one’s property value or boosting one’s lifestyle, remodeling is the way to go. Remodeling is a type of business that can be started with simple services at the residential level. And can be expanded to performing complicated renovations needed by commercial buildings and businesses.

No matter how large or how small your startup is, you would have to create a remodeling business plan for remodeling. Creating a comprehensive business plan before you open a remodeling business will help you in:

• Recognizing the latest trends
• Acquiring the right expertise
• Avoiding troublesome situations
• Efficiently manage finances

To help you in creating a business plan that covers all the essential aspects, we’re providing a sample business plan of a startup ‘Model-It Solutions’.

Executive Summary

2.1 the business.

Model-It Solutions will be a registered, licensed, and insured remodeling business startup based in Buffalo, New York. The business will comprise expert contractors, architects, and engineers to enhance the aesthetic and comfort level of residential as well as commercial structures.

Simply put, we build what you dream!

2.2 Management of Remodeling business

As a business owner, you can’t rest after setting up a remodeling company. You have to be proactive in organizing and analyzing various business operations. In the case of a remodeling business, you need efficient management to complete given projects in time. To make sure that clients get the work done according to their expectations, you have to properly manage communication, finances, and resources among various channels.

2.3 Customers of Remodeling business

Exploring who are going to be your customers is extremely important. Before you search for how to start a remodeling company, you should identify your customers.

The target customers of Model-It Solutions will be the homeowners, construction firms , contractors, and government agencies. To turn them into our potential customers, we will be taking effective steps.

2.4 Business Target

Our major targets are:

• To maintain a customer return rate of 20% throughout our service years
• To maintain a CSAT score of above 85%

Our financial targets to cover our expenses and investments through the profits earned are summarized in this table.

Company Summary

3.1 company owner.

Anna Huston will be the owner of Model-It Solutions. Anna is an MBA. After completing her education at Stanford University, she started working in Skanska.

But 5 years into the service, she decided to start a remodeling business of her own.

3.2 Why the remodeling business is being started

Anna always remained a woman of creative ideas. After serving in a multinational firm, she decided to move to her hometown and serve people with her talent. She realized that the remodeling business has never-ending scope in the years to come as people keep thinking of bringing improvement to their property.

3.3 How the remodeling business will be started

Step1: Plan your business

As the first step, Anna studied various business plan examples for remodeling company to make a business plan for remodeling. From analyzing the market shares to creating a financial plan, Anna put everything on her business plan.

Through this remodeling business plan sample you can study the business’ requirements, balance sheets, personnel plan, and other aspects of Model-It Solutions.

Step2: Define your brand

The second step after creating a remodeling business plan is to get your business registered. You will have to acquire the required licenses and permits. Moreover, this is the time when you have to physically establish your business office.

Step3: Hire the staff

The third step is to conduct interviews and tests to hire the most competent employees.

Step4: Get ready to promote & market

The next step is to promote your services and competitive aspects to reach your target customers. This step also involves the strategy you will adopt to gain and retain your client base.

Step5: Establish a web presence

In this age, people use Google to find the right service provider whenever they need any service. Therefore, it has become essential that you establish a strong social media and web presence.

Anna decided to hire a professional IT expert to create a website for Model-It Solutions. The website will also enable users to make online bookings. Moreover, the website will also keep a record of repeat customers so that Anna could evaluate her business performance time-to-time.

Our startup expenses including costs of all the things we could need for the startup are given below:

Before exploring how to start your own remodeling business, you should decide your services. Deciding your services even before the launch can help you in identifying the ways through which you can facilitate your customers.

To give you a notion of services you can provide as a remodeling firm, we are enlisting the services provided by Model-It Solutions in this remodeling business plan template.

• Full House Remodeling: Our primary service will be to do the whole house remodeling. In this, we will work to redesign an old building to fulfill modern needs such as increasing the living space or making the interior/ exterior more appealing.

Depending on the clients’ needs we will remodel their kitchen, laundry, bath, deck, and more. We also install sidings, flooring, new windows and doors, cabinets, and whatever else our customers would need.

• Handyman Remodeling: This service will include doing minor changes in homes such as installing a modern lighting system, carpeting, painting the walls and cabinets, installing wallpapers, and doing small repairs.
• Historic Home Remodeling: Our third service will be to remodel historic and significant architectural buildings without affecting their historic aspects.
• Individual Structural Re-design: We will offer the services of adding/ removing the bathroom, room, kitchen, and laundry, installing a staircase, modern roofing, etc.

Marketing Analysis of Remodeling Business

Marketing analysis is an important part of a remodeling contractor’s business plan as it enables the business owner to keep pace with the demands of their customers. Through efficient marketing analysis, you can recognize remodeling domains that have high demand. Moreover, this part also gives you a clear idea of your customers before you open a remodeling business.

5.1 Market Trends

According to a report by IBISWorld, remodeling businesses have seen a growth rate of 1.7% in the past five years. More than 455 thousand remodeling companies are operating throughout the United States. The market size, according to the same outlet, is reported to be $97 billion.

The market stats are quite satisfying and the growth rate also indicates that there is still room for other startups to join the venture. If you want to ensure that you get customers from the very beginning of your startup, you should study the market trends of individual locations. That will help you locate an area where competition is low and people who need remodeling service are greater in number.

5.2 Marketing Segmentation

Identifying your customers before investigating how to write a business plan for remodeling is necessary. Dividing the wide populations into distinct groups can help you in recognizing their demands. And thus enabling you to plan ways to fulfill their expectations.

The groups that were identified by Model-It Solutions as potential customers are given below:

5.2.1 Real Estate Owners: Our primary customers will be the people who own any sort of building. They can need our services in two cases:

• They want to enhance the interior design / exterior for themselves.
• They want to remodel the property to increase its value so that it could be sold at a greater price.

In any of the cases, we’ll go to all extents to make sure they are happy and satisfied with our remodeling services. For them, we’ll provide full property remodeling services as well as individual services like installing new cabinets and remodeling the kitchen, etc.

5.2.2 Contractors & Construction Companies: The second group of our target customers will include contractors and construction companies. They will need our services whenever they get some project or even when they are building some structure from scratch.

5.2.3 Government Agencies : Our third category comprises government agencies who will be needing us to remodel structures of historic, artistic, and cultural importance – in a way that their integrity and historic aspects are maintained.

The detailed market analysis of our potential customers is given in the following table:

5.3 Business Target

Anna set her business financial and other goals before starting a remodeling company. She realized that by doing so, she would be able to provide a direction to her resources and talent.

The business targets of Model-It Solutions are

• To earn a net profit of $24k per month by the end of the first year
• To lower the costs of our operations by 5% by the end of the 3 years by improving our techniques and methods

5.4 Product Pricing

The prices of our services will be lesser than those of our competitors. It is because we want to capture as many customers as possible in the initial phases of our startup.

Marketing Strategy

A remodeling business plan is incomplete unless you include in it, the ways to capture the attention of your target audience. In this marketing plan for remodeling business we are enlisting the exclusive sales strategy plan of Model-It Solutions.

6.1 Competitive Analysis

Anna realized that hundreds of remodeling firms are already operating in Buffalo. Therefore, she decided to come up with distinct features to outperform her business rivals.

The competitive aspects of Model-It Solutions are:

• We are highly client-oriented. We will always be willing to amend the remodeling designs as per our clients’ wants and needs.
• Our workers are highly skilled and highly collaborative.
• We provide online booking and payment facilities to our customers.
• Our repeat customers will be offered several discounts.
• Our prices are lower than our competitors, so you can easily try our services for a minor/ major task.

6.2 Sales Strategy

To get introduced to our target customers, we will:

• Advertise our startup through local newspapers, Google Local ads service, and social media
• Keep our prices lower than our competitors
• Establish a strong web presence using SEO techniques
• Provide a 25% discount to our repeat customers on every second visit

6.3 Sales Yearly

6.4 sales monthly, 6.5 sales forecast, personnel plan.

While writing a business plan for remodeling, you should also define your employees, their job responsibilities, and requirements. It will enable you to judge the applicants on a definite criterion when you are going through the hiring phase.

7.1 Company Staff

Anna will manage the business herself. However, she’ll hire the following staff:

• 1 Co-Manager
• 1 Architect to design/ remodel complicated projects
• 2 Contractors to implement remodeling designs
• 5 Field Workers to work as laborers
• 1 Accountant to maintain financial records
• 1 Technician to maintain the machinery
• 1 IT Expert to manage the company’s website, online record, and social sites
• 1 Driver to provide transportation

7.2 Average Salary of Employees

Financial plan.

In the last part of your business plan, you should analyze your estimated cash flows. Before you make a remodeling business plan, you should have a clear idea of how much amount you intend to spend on which aspect of your business. Moreover, you should also have a plan to achieve your business goals by optimizing your profits.

In this business plan sample, you can explore the financial projections, break-even analysis, business ratios, gross margins, and other financial estimations done by Model-It Solutions to gauge its progress and business value.

However, while you go through this financial plan, remember, its projections are based on the assumption that there will be no major recession in the coming 5 years.

8.1 Important Assumptions

8.2 brake-even analysis, 8.3 projected profit and loss, 8.3.1 profit monthly, 8.3.2 profit yearly, 8.3.3 gross margin monthly, 8.3.4 gross margin yearly, 8.4 projected cash flow, 8.5 projected balance sheet, 8.6 business ratios.

Download Remodeling Business Plan Template in pdf

OGS capital professional writers specialized also in themes such as engineering consulting , HVAC business plan, real estate flipping business plan ,  architecture firm business plan etc.

OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.

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How To Start A House Renovation Business: A Comprehensive Guide

Starting a house renovation business can be a lucrative venture, especially in today’s real estate market. A 2022 survey found that renovation activity and spending are at a four-year high, with 55% of homeowners planning to renovate before the end of the year. If you are considering entering this industry, our comprehensive guide on ‘How To Start A House Renovation Business’ will provide you with all the essential information you need to get started. From understanding the basics of house renovation to managing your cash flow effectively, this guide covers it all. So, let’s dive in and start building your successful house renovation business!

Understanding the Basics of House Renovation

Before diving into the world of house renovation, it’s crucial to understand the basics. One common confusion is the difference between renovation and remodeling. Renovation involves repairing, restoring, or updating a space, while remodeling typically implies larger projects that alter a building’s structure and almost always require a team. Typical home renovation projects involve updating a kitchen or bathroom with new appliances and fixtures or upgrading a home’s floors, windows, or doors. On the other hand, remodeling projects could be adding a new room to a house or combining multiple apartment units into one. Depending on the complexity of a home renovation or remodeling job, a general contractor may need to hire a team of subcontractors, in addition to a designer, an architect, or even a structural engineer.

Developing Your Skills for Home Renovation

Starting a house renovation business requires a specific skill set. The essential skills required for home renovation and remodeling include carpentry, electrical, HVAC, plumbing, concrete, masonry, flooring, carpeting, tiling, drywall, windows and doors, and painting. It’s often a great idea to build up your home renovation skill set before you launch your small business. You can develop these skills through courses, hands-on training, and working as a subcontractor or apprentice.

For example, carpentry comes into play in most home renovation jobs, so getting a carpentry certification is a good start. Other skills like electrical, plumbing, and HVAC are also in high demand for home renovations but take longer to master. Each trade has its own licensing and certification requirements that vary by state.

Many aspiring home renovators level up their skills by working as a subcontractor for a general contractor. This can get you invaluable first-hand experience and help you find a mentor who can be there for you when it’s time to start your own construction business.

It’s important to note that while it’s beneficial to have a broad skill set, you don’t need to be an expert in everything. When you’re a general contractor running your own home renovation or remodeling business, you’ll typically specialize in a few of these skills and subcontract out the rest to electricians, plumbers, and more.

For more detailed information on starting a home renovation business, visit ZenBusiness .

Getting Licensed and Insured for House Renovation Business

Starting a house renovation business involves more than just having the right skills. You also need to be properly licensed and insured. State general contractor license requirements vary, so it’s important to check with your local government or a legal advisor to understand what is needed in your area. Generally, you will need to pass an exam, have a certain amount of experience, and pay a fee to get licensed.

Next, you need to get the right insurance coverage and bonds . Essential insurance for home renovation or remodeling projects includes general liability insurance, workers’ compensation, commercial auto, tools and equipment, and commercial property coverage. This protects you financially if something goes wrong, and project owners and licensing agencies often require it. Many general contractors also get a bond, which is like an added level of insurance on your coverage plan.

To obtain general contractor insurance and bonds , you can approach insurance companies that specialize in construction or renovation businesses. It’s important to compare quotes from different providers to ensure you get the best deal. Some online platforms, like NEXT, offer an easy option to get general contractor coverage within a few minutes online.

Focusing on Your Customers

Once you are licensed and insured, it’s time to focus on your customers. The success of your house renovation business largely depends on your ability to attract and retain customers. An online presence is crucial in this digital age. It costs very little to make a website and social media profiles, and you can boost their reach with Google and Facebook ads. However, even with a good online presence, word-of-mouth from satisfied customers is the number one source of referrals for many self-employed home renovation entrepreneurs.

To build strong relationships with satisfied customers , remember to follow up after each job to make sure they are happy and address any issues. Take photos before, during, and after your home renovation work, with your customer’s permission, and use these pictures on your website and social platforms. For your potential customers, seeing is believing.

Utilizing website and social media platforms for marketing and customer reviews is also essential. Offer discounts and ask people to help spread the word. Doing jobs for lower costs at the beginning is an excellent way to sharpen your skills as you ramp up. It’s also a huge marketing opportunity, as you can start filling up your website and social media with genuine and positive customer reviews.

For more detailed information on starting a home renovation business, visit AllBusiness .

Building Industry Relationships for Success

In the house renovation business, it’s not just what you know, but who you know. Networking with other contractors, industry professionals, and suppliers is crucial for your business’s success. These relationships can lead to referrals, and partnerships, and can even help you get better deals on materials.

Joining local chapters of organizations like the National Association of the Remodeling Industry (NARI), the National Association of Home Builders (NAHB), and the National Kitchen & Bath Association (NKBA) can also be beneficial. These organizations often host networking events, provide educational resources, and can help you stay updated on industry trends and regulations.

Investing in relationships with suppliers and other industry professionals is also important. Suppliers can sometimes refer you to potential clients, and other industry professionals, like architects and interior designers, can recommend your services to their clients. Remember, a good word from a trusted colleague can go a long way in this industry.

Managing Your Cash Flow Effectively

Cash is king in any business, and the house renovation business is no exception. Cash flow management is crucial for covering materials and labor costs. You need to have enough cash on hand to pay your suppliers and employees, even if your clients haven’t paid you yet.

Planning for client payment collection and potential client fall-through is also important. Make sure you have a clear payment schedule outlined in your contract, and consider asking for a deposit upfront. This can help cover your initial costs and protect you if the client falls through.

Utilizing accounting basics invoicing and business finance tools can also help you manage your cash flow effectively. There are many software options available that can help you track your expenses, send invoices, and manage your finances. Some popular options include QuickBooks, Xero, and FreshBooks.

For more detailed information on starting a home renovation business, visit Chron .

Frequently Asked Questions

How can i start a house renovation business.

To start a house renovation business, you need to follow these steps:

• Understand the basics of house renovation and remodeling.
• Develop your skills in carpentry, electrical, HVAC, plumbing, etc.
• Obtain the necessary licenses, insurance coverage, and bonds.
• Build an online presence and strong relationships with satisfied customers.
• Network with other contractors, industry professionals, and suppliers.
• Manage your cash flow effectively.

What Skills Are Required To Start A House Renovation Business?

The essential skills required to start a house renovation business include:

• Windows and doors

Do I Need A License To Start A House Renovation Business?

Yes, depending on your state’s general contractor license requirements, you will likely need a license and insurance coverage to work on a home renovation or remodeling project.

How Can I Market My House Renovation Business?

To market your house renovation business, you should:

• Create a website and social media profiles.
• Boost your online presence with Google and Facebook ads.
• Rely on word-of-mouth referrals from satisfied customers.
• Join local chapters of organizations like NARI, NAHB, and NKBA.
• Network with other industry professionals and suppliers.

How Can I Manage My Cash Flow Effectively?

To manage your cash flow effectively, you should:

• Calculate your start-up costs, materials, and labor costs.
• Plan for client payment collection and potential client fall-through.
• Utilize accounting basics invoicing and business finance tools.

Starting a house renovation business can be a rewarding and profitable venture if you have the right skills, licenses, and a solid business plan. Our comprehensive guide on ‘How To Start A House Renovation Business’ has provided you with all the essential information you need to get started and succeed in this industry. Remember to focus on your customers, build strong industry relationships, manage your cash flow effectively, and keep growing. Good luck with your house renovation business!

Thank you for reading!

How To Write a Business Plan for Home Remodeling in 9 Steps: Checklist

By henry sheykin, resources on home remodeling.

• Financial Model
• Business Plan
• Value Proposition
• One-Page Business Plan
• SWOT Analysis
• Business Model
• Marketing Plan

Welcome to our blog post on how to write a business plan for home remodeling! Home remodeling is a thriving industry in the US, with an estimated market size of over $450 billion in 2020. With the increasing demand for renovation projects, it is essential for home remodeling companies to have a well-defined plan to stand out from the competition and offer exceptional services to their clients. In this blog post, we will guide you through the nine essential steps to create a comprehensive business plan for your home remodeling venture.

Step 1: Identify target market and potential customers

Before diving into the business planning process, it is crucial to identify your target market and the potential customers you want to serve. Understanding the demographics, preferences, and needs of your target audience will help you tailor your services to meet their specific requirements.

Step 2: Conduct market research and analysis

Market research is an indispensable part of any business plan. It involves analyzing the industry trends, competitors, and customer demands. Gathering key insights from the market will enable you to make informed decisions and position your business for success.

Step 3: Define business goals and objectives

Clearly defining your business goals and objectives is crucial for creating a roadmap to success. Whether it's achieving a certain revenue target or expanding your clientele, having specific and measurable goals will help you stay focused and motivated on your home remodeling journey.

Step 4: Determine the scope of services to be offered

Decide on the range of services you plan to offer to homeowners. Whether it's kitchen renovations, bathroom remodels, or whole-house makeovers, identifying your specialization will help you build a reputation as an expert in your chosen area of home remodeling.

Step 5: Assess competition and identify unique selling proposition

Analyzing your competitors' strengths and weaknesses will enable you to identify your unique selling proposition (USP). Whether it's superior craftsmanship, innovative designs, or exceptional customer service, your USP will set you apart from the competition and attract potential clients.

Step 6: Develop a pricing strategy

Establishing a pricing strategy that aligns with your target market and delivers value for your services is crucial. Analyze your costs, consider industry standards, and determine a pricing structure that ensures profitability while remaining competitive in the market.

Step 7: Create a comprehensive budget and financial projections

Developing a detailed budget and financial projections will help you understand the financial viability of your home remodeling business. Consider all expenses, including materials, labor, overhead costs, and marketing expenses, and forecast your revenue to have a clear picture of your financial health.

Step 8: Establish a marketing and promotion plan

Having a well-defined marketing and promotion plan will help you reach your target audience and generate leads. Utilize various channels, such as online advertising, social media, and local networking, to reach potential customers and showcase your expertise in the home remodeling industry.

Step 9: Identify and secure necessary resources and partnerships

Identify the resources, such as skilled labor, subcontractors, suppliers, and tools, required to execute your home remodeling projects successfully. Establishing partnerships with reliable and reputable professionals in the industry will help you deliver high-quality workmanship and provide a seamless experience for your clients.

By following these nine steps, you'll be well-equipped to create a comprehensive business plan for your home remodeling venture. Stay tuned for our subsequent blog posts, where we will dive deeper into each step, providing you with more insights and tips to turn your business plan into reality.

Identify Target Market And Potential Customers

Identifying your target market and potential customers is a crucial first step in writing a business plan for home remodeling. Understanding who your customers are and what they want will help you tailor your services and marketing efforts to meet their specific needs.

Here are some important factors to consider when identifying your target market:

• Demographics: Consider factors such as age, income level, location, and family size. This information will help you narrow down your target market and focus your efforts on those who are most likely to require home remodeling services.
• Psychographics: Look beyond basic demographics and consider the values, interests, and lifestyles of your potential customers. This will help you understand their motivations and preferences, allowing you to tailor your services and marketing messages accordingly.
• Needs and Pain Points: Identify the specific needs and pain points that your target market faces when it comes to home remodeling. This could be anything from outdated designs to lack of space or inefficient layouts. Understanding these challenges will enable you to position your company as the solution provider.

Tips for identifying your target market and potential customers:

• Conduct market research to gather data and insights about your target market.
• Segment your target market into smaller, more specific groups to tailor your services and marketing efforts.
• Consider conducting surveys or interviews with potential customers to gain a deeper understanding of their needs and preferences.
• Stay updated on industry trends and changes in consumer behavior to adapt your business strategy accordingly.

By taking the time to identify your target market and potential customers, you will be able to develop a more focused and effective business plan for your home remodeling company. This will enable you to better meet the needs of your customers and stand out in a competitive market.

Conduct Market Research And Analysis

Conducting market research and analysis is a crucial step in developing a successful business plan for home remodeling. It allows you to gain a deep understanding of your target market, competition, and industry trends, which will guide your decision-making process and help you position your business effectively.

Market research involves gathering and analyzing data about your target market, including demographics, purchasing behaviors, and needs. This information will help you identify the specific segments of the market that are most likely to be interested in your services. Conducting surveys, interviews, or focus groups with potential customers can provide valuable insights into their preferences and expectations.

Tips for conducting market research:

• Use online survey tools to reach a wider audience and collect data more efficiently.
• Consider hiring a market research firm to conduct a comprehensive analysis of the industry and competitive landscape.
• Analyze data from online platforms, such as social media and home improvement forums, to identify trends and popular renovation ideas.

Market analysis involves examining the broader market conditions, industry trends, and competitive landscape to understand the opportunities and challenges your business may face. This analysis should include an assessment of the demand for home remodeling services, the size of the market, and the growth potential.

Tips for conducting market analysis:

• Research industry reports and publications to gain insights into the current and future trends in the home remodeling market.
• Examine the strengths and weaknesses of your competitors to identify gaps in the market that your business can exploit.
• Identify emerging technologies and innovative approaches in the home remodeling industry that could give you a competitive advantage.

By conducting thorough market research and analysis, you will be equipped with the knowledge and understanding necessary to make informed decisions about your target market, pricing strategy, and marketing efforts. This information will also help you identify opportunities for differentiation and develop a unique selling proposition that sets your business apart from the competition.

Define Business Goals And Objectives

Defining clear and specific business goals and objectives is crucial for the success of your home remodeling business. These goals will serve as a roadmap, guiding your decisions and actions towards achieving the desired outcomes.

When defining your business goals and objectives, consider the following:

• Long-term vision: Start by envisioning what you want your business to become in the future. This could include becoming a market leader, expanding into new territories, or offering specialized services. Your goals should align with your long-term vision.
• SMART goals: Ensure that your goals are Specific, Measurable, Achievable, Relevant, and Time-bound. This will provide clarity and help you track your progress.
• Customer-centric approach: Your goals should be centered around providing value to your customers. Consider how you can exceed their expectations, enhance their experience, and build long-term relationships.
• Operational efficiency: Set goals that focus on improving the efficiency and effectiveness of your operations. This could involve streamlining processes, reducing costs, or implementing new technology.
• Growth and profitability: Aim to achieve sustainable growth and maximize profitability. Set clear targets for increasing revenue, profit margins, and market share.

Tips for defining business goals and objectives:

• Involve key stakeholders: Seek input from your team members, clients, and industry experts. Their insights can provide valuable perspectives and help you set realistic goals.
• Regularly review and adapt: Business goals should not be set in stone. As market conditions and customer demands change, be prepared to review and adapt your goals to stay relevant and competitive.
• Break down goals into actionable steps: Once you have defined your goals, break them down into smaller, manageable tasks. This will make it easier to implement and track progress.
• Communicate goals to your team: Ensure that everyone in your organization understands and is aligned with the business goals and objectives. Regularly communicate progress and celebrate milestones to keep the team motivated.

Defining well-defined business goals and objectives will provide the direction and focus necessary to drive your home remodeling business towards success. Take the time to carefully consider and articulate your goals, as they will serve as a guiding force throughout your business journey.

Determine The Scope Of Services To Be Offered

Before starting a home remodeling business, it is crucial to determine the scope of services that will be offered. This step will help define the types of projects the company is capable of handling and ensure that the business aligns with its target market's needs and expectations.

When determining the scope of services, it is essential to consider the company's expertise, available resources, and the target market's demands. Here are some key factors to consider:

• Specializations: Identify specific areas of expertise within home remodeling that the company will focus on. This could include kitchen renovations, bathroom makeovers, or whole-house remodeling.
• Types of projects: Determine whether the business will handle small-scale projects, such as room additions or minor renovations, or larger-scale projects, such as complete home overhauls.
• Design services: Decide if the company will offer design services in-house or collaborate with external designers and architects. This choice will affect the company's capabilities and the overall customer experience.
• Permits and legal requirements: Understand the permits and legal requirements necessary to offer the chosen scope of services. This includes obtaining any licenses or certifications needed to comply with local regulations.
• Materials and suppliers: Research and establish relationships with reliable suppliers to ensure access to high-quality materials for the projects. Having a network of trusted suppliers can help streamline operations and provide consistent results.

Tips for determining the scope of services:

• Consider market demand and analyze competitors to identify potential gaps or niche opportunities.
• Consult with industry professionals or experts to gain insights into market trends and customer preferences.
• Regularly reassess the scope of services offered to adapt to changing customer needs and market conditions.
• Ensure alignment between the company's capabilities and the chosen scope of services to deliver exceptional results consistently.

By determining the scope of services to be offered early in the business planning process, home remodeling companies can establish a clear direction for their operations. This clarity will help attract the right customers, enhance operational efficiency, and ultimately contribute to the business's success in the competitive home remodeling market.

Assess Competition And Identify Unique Selling Proposition

Assessing the competition in the home remodeling industry is crucial to understanding the market landscape and identifying opportunities for differentiation. By thoroughly researching and analyzing competitors, you can gain valuable insights into their strengths, weaknesses, and strategies.

Start by identifying key competitors in your target market. Look for companies that offer similar services and cater to a similar customer base. Visit their websites, read customer reviews, and analyze their portfolios to get a sense of their work quality and project approach.

Here are a few important factors to consider when assessing your competition:

1. Services Offered:

• Take note of the range of services your competitors offer. Are they specializing in a particular type of home remodeling project or offering a comprehensive suite of services?
• Identify any gaps or underserved areas in the market that your business can capitalize on.

2. Pricing and Value:

• Compare the pricing strategies of your competitors. Are they charging flat fees, percentages, or hourly rates?
• Assess the value proposition of each competitor. What unique features or benefits do they offer to attract customers?

3. Reputation and Customer Feedback:

• Take note of the reputation of your competitors. Are they known for delivering high-quality workmanship and exceptional customer service?
• Read customer reviews and testimonials to understand their strengths and weaknesses from the customer's perspective.

4. Marketing Strategies:

• Analyze the marketing and promotional activities of your competitors. What channels do they use to reach their target audience?
• Identify any unique marketing tactics or messaging that sets them apart.

Once you have assessed the competition, it's time to identify your unique selling proposition (USP). Your USP is the key factor that sets your business apart from the competition and makes you stand out in the market.

Consider your strengths, expertise, and the needs of your target market. What unique qualities or advantages do you possess that others don't? This could be your exceptional project management skills, specialization in a specific type of home remodeling, outstanding customer service, or innovative design solutions.

Clearly define your USP and incorporate it into your marketing and communication strategies to differentiate your business from the competition. By showcasing your unique strengths, you can attract customers who value what you have to offer and establish a strong position in the home remodeling industry.

Develop A Pricing Strategy

A crucial aspect of running a successful home remodeling business is developing a pricing strategy that is both competitive and profitable. Here are some important points to consider when developing your pricing strategy:

• Research the market: Conduct thorough research to understand the pricing trends in your target market. Take into account factors such as labor costs, material costs, and overhead expenses. This will help you determine a competitive yet profitable pricing structure.
• Value-based pricing: Instead of solely basing your pricing on costs, consider the unique value you provide to your customers. Highlight your expertise, quality of workmanship, and ability to meet timelines and budgets. This approach allows you to charge a premium price based on the perceived value you deliver.
• Transparent pricing: Customers appreciate transparency when it comes to pricing. Clearly outline the cost breakdown for different services and clearly communicate any additional charges or potential cost variations. This helps build trust and credibility with your clients.
• Offer different pricing packages: Consider offering a range of pricing packages tailored to different customer needs. This can include basic packages with essential services and premium packages with additional features or customization options.
• Regularly review and adjust pricing: Keep an eye on market trends, material costs, and changes in demand to ensure your pricing remains competitive and profitable. Regularly reviewing and adjusting your pricing strategy will help you stay ahead of the competition.

Developing a pricing strategy requires a careful balance between meeting customer expectations and ensuring your business remains profitable. By researching the market, considering value-based pricing, and being transparent with your customers, you can establish a pricing strategy that sets your home remodeling business up for success.

Create A Comprehensive Budget And Financial Projections

Creating a comprehensive budget and financial projections is a crucial step in developing a successful business plan for home remodeling. It allows you to have a clear understanding of the financial aspects of your business and helps you make informed decisions about pricing, expenses, and potential profitability.

When creating your budget, it is essential to consider all the costs associated with your home remodeling business. This includes both direct costs, such as materials, labor, and subcontractors, as well as indirect costs like insurance, permits, marketing, and office expenses. It is important to be as detailed as possible when estimating costs to ensure you have a realistic and accurate representation of your expenses.

In addition to outlining your expenses, you should also develop financial projections for your home remodeling business. These projections will allow you to forecast your revenue and expenses over a specific period, typically over the first three to five years of your business. It is crucial to be realistic when setting your revenue projections to avoid overestimating your income.

Tips for creating a comprehensive budget and financial projections:

• Research industry benchmarks and average costs to ensure your estimates are in line with the market.
• Consider different scenarios and potential risks to assess the financial viability of your business.
• Regularly review and update your budget and projections as you gain more information and experience in the industry.
• Consult with a financial advisor or accountant to ensure accuracy and reliability of your financial projections.
• Develop a contingency plan to account for unexpected expenses or changes in the market.

Creating a comprehensive budget and financial projections requires careful analysis and consideration. By accurately estimating your expenses and forecasting your revenue, you can ensure that your home remodeling business is financially sustainable and has the potential for long-term success.

Establish A Marketing And Promotion Plan

Once you have identified your target market and defined your business goals, it is crucial to establish a comprehensive marketing and promotion plan to effectively reach your potential customers.

1. Identify your target audience: Determine who your ideal customers are based on demographics, interests, and preferences. This will help you tailor your marketing efforts to resonate with your target audience.

2. Create a strong brand identity: Develop a compelling brand image that reflects your company's values and unique selling proposition. Design a memorable logo, establish brand guidelines, and create consistent branding across all marketing channels.

3. Build an online presence: In today's digital age, having a strong online presence is essential for any business. Create a professional website that showcases your previous projects, services offered, and testimonials from satisfied customers. Utilize search engine optimization techniques to improve your website's visibility in search engine results.

4. Utilize social media: Leverage the power of social media platforms to engage with your target audience and promote your home remodeling services. Develop a content strategy that includes informative and visually appealing posts, share before-and-after photos of your projects, and encourage satisfied customers to leave reviews on your social media profiles.

5. Implement email marketing: Build an email list of potential customers and existing clients to regularly stay in touch and provide updates on your latest projects, special offers, and industry trends. Send out informative newsletters and personalized emails to nurture relationships and generate repeat business.

Tips for an effective marketing and promotion plan:

• Offer special promotions or discounts to incentivize potential customers to choose your services over competitors.
• Attend home shows and industry events to network with potential customers, industry professionals, and suppliers.
• Collaborate with local interior designers, architects, and real estate agents to establish mutually beneficial referral partnerships.
• Showcase your expertise by publishing informative blog posts, articles, and how-to guides related to home remodeling on your website and social media platforms.
• Monitor and analyze the effectiveness of your marketing efforts using tools like Google Analytics to make data-driven decisions and optimize your strategies.

Remember, consistency and creativity are key when establishing a marketing and promotion plan for your home remodeling business. Continuously evaluate and refine your strategies to ensure you are effectively reaching your target audience and staying ahead of your competitors.

Identify And Secure Necessary Resources And Partnerships

When starting a home remodeling business, it is essential to have the right resources and partnerships in place to ensure the smooth execution of projects. Identifying and securing these resources not only contributes to the success of your business but also helps you deliver high-quality workmanship and meet client expectations.

1. Determine the resources needed: Begin by assessing the specific resources required for your home remodeling projects. This could include a team of skilled workers, specialized tools and equipment, construction materials, and reliable suppliers.

2. Build a reliable network of suppliers: Research and establish partnerships with suppliers who can provide you with high-quality materials at competitive prices. Having reliable suppliers ensures a smooth supply chain, reduces project delays, and helps maintain your reputation for delivering timely projects.

3. Recruit a skilled team: Hire talented individuals with expertise in various aspects of home remodeling, such as carpentry, plumbing, electrical work, and painting. Building a competent team ensures that you have the necessary skill set to handle all aspects of the projects you undertake.

4. Establish partnerships with subcontractors: Sometimes, certain projects may require specialized expertise that your team may not possess. In such cases, establishing partnerships with subcontractors who specialize in specific areas can add value to your business. It allows you to offer a wider range of services and ensures high-quality workmanship.

5. Invest in professional development: To stay ahead in the competitive home remodeling industry, it is crucial to continuously improve your skills and knowledge. Encourage your team to attend relevant workshops, seminars, and training programs that can enhance their expertise. This investment in professional development contributes to the overall growth of your business.

• Regularly evaluate the performance of your resources and partners to ensure they meet the desired standards.
• Maintain open lines of communication with suppliers, team members, and subcontractors to address any issues promptly.
• Consider establishing long-term relationships with reliable partners to foster trust and loyalty.

By identifying and securing the necessary resources and partnerships, you set the foundation for a successful home remodeling business. Working with a skilled team, reliable suppliers, and strategic partners not only enhances your project execution but also helps you build a reputation for delivering exceptional results.

In conclusion, writing a business plan for a home remodeling company requires careful research, analysis, and planning. By following the steps outlined in this checklist, entrepreneurs can develop a comprehensive and effective business plan that sets them up for success in the competitive home remodeling industry. From identifying the target market and defining business goals to establishing a marketing plan and securing necessary resources, each step plays a crucial role in creating a strong foundation for a thriving home remodeling business.

By adopting a project-based model and focusing on efficient project management, effective communication, and high-quality workmanship, home remodeling companies can meet the demands of homeowners seeking one-time renovations. With a well-executed business plan in place, entrepreneurs can confidently pursue their dreams of running a successful home remodeling business.

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How to Start a Remodeling Business

If you're wondering how to start your own home renovation business, this guide on starting a remodeling business is best for you..

Are you considering starting a renovation company but are concerned about the amount of competition? Don’t worry about it.

There’s plenty of opportunity in the remodeling and home renovation world for contractors who accomplish as little as $100,000 in total volume per year and work their way up.

In this article, we’ll go over some of the steps you’ll need to do to get started in the remodeling business. 

We’ll also go over some helpful hints for starting and growing a remodeling business in this industry.

So, if you’re considering to change career and becoming a contractor, keep reading!

Step 1. Decide on a specialty

All general contractors specialize in one or two services and then subcontract out the rest of the work. Which services you plan to fulfill yourself and which services you plan to contract out to subs should be addressed in your remodeling business plan. 

For example, you may want to start remodeling your kitchen and bathroom, but you will only be able to do the tile work yourself. You’d have to hire others to do the electrical, plumbing, cabinetry, and finishing work. The amount of work you need to sub out will determine how big or small projects you can take on.

Larger projects usually mean more money, but if you have to contract out a lot of work, you may lose more money than you gain.

Step 2: Make a budget plan ahead of time

Home renovation businesses, in contrast to construction businesses, which are typically large corporations, are easier to manage financially. However, don’t expect everything to go smoothly. With so many other entrepreneurs in your field doing the same work as you, the most important thing you can do is make sure you have enough money to cover your initial costs.

This budget should include the wages of your employees (direct labor), overhead expenses (the total cost of all the tools you’ll need to complete the job), and direct materials (pretty self-explanatory). When you’ve figured out all of your upfront costs, it’s time to look into financing options. 

Make appointments with several banks to see if they can provide you with some reasonably priced business loans. Additionally, look into government grants for small businesses. Even if you don’t qualify for one right now, knowing what options you have in the future is beneficial.

If you’re just offering your time and skills as a part-time re modeler, the start-up cost will be around $50,000 to $75,000 , as you’ll need a full set of tools, a vehicle to transport tools and supplies, and the necessary licencing and insurance to operate in your state and locality. If you are starting a remodeling business providing major renovation services, you’ll need $250,000 to $500,000 in start-up capital, as you’ll need to buy your first few orders of materials and hire staff before your customer pays you for the job.

Step 3: Your remodeling business name

Choosing the right business name is crucial and difficult. If you run a sole proprietorship , you should consider using a different remodeling business name than your own.

When registering a business name, we recommend conducting the following research:

• The business records of your state
• Platforms for social media
• Records of federal and state trademarks
• The availability of a web domain.

Step 4. Create a legal business entity

• Sole Proprietor
• C Corporation
• General Partnership

Find out how to form an llc yourself

Learn about llc formation, including information on registered agents, naming rules, business licenses, and more.

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Step 5. Acquire the required licenses and insurances

You may discover that your state requires you to obtain a contractor’s licence if you Google how to start a remodeling business. You might be able to skip this step if you’re only doing finishing and cosmetic work. If you plan to make any structural changes to homes or buildings, install roofing or siding, or perform electrical or plumbing work, you will need to be properly certified.

In addition, you should purchase general liability insurance. Even if some states don’t require it for all contractors, it’s a good idea to have one in case something goes wrong and the homeowner or business owner decides to blame you. 

For example, if you remodel a bathroom and the pipes burst two weeks later, you may be liable for property damage. General liability insurance could protect you from having to pay for a priceless heirloom out of your own pocket if one of your employees steals from a homeowner.

Ready to Protect Your Remodeling Business

Let us help you with your business insurance needs.

• General business liability insurance
• Medical insurance
• Term life insurance
• Workers’ Comp
• Surety bonds
• Commercial auto

Step 6. Make friendship with subcontractors and suppliers

People who provide you with the materials you need for your home renovation business, as well as your collaborators, should be treated as family. Despite the fact that it is a business partnership, it should be built on mutual trust and support.

The most important rule to follow is that you should always pay your suppliers and collaborators on time. Your company will rely on them just as much as it will rely on your own abilities. 

For example, you could use online invoicing to speed up the payment process and your company’s workflow. These practical tools not only help with workflow, but they also help with cash flow, resulting in smooth and quick business collaboration. If you need invoice templates, visit our invoice template page to download the professional free invoice templates.

Many new businesses can be found in the home renovation market. While becoming a successful business owner in this field will take a lot of time and effort, there is plenty of room for (both personal and professional) growth. As a result, take the plunge and start your own remodeling business.

Step 7. Create a business bank account and a credit card for it

Personal asset protection necessitates the use of dedicated business banking and credit accounts. When your personal and business accounts are mixed, your personal assets (such as your home, car, and other valuables) are put at risk if your company is sued. This is referred to as piercing your corporate veil in business law.

Furthermore, learning how to build business credit can help you obtain business credit cards and other financing in your business’s name (rather than your own), lower interest rates, and increase credit lines, among other benefits.

Open a bank account for your business

• Separates your personal assets from your company’s assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Create a net 30 account

Get a credit card for your remodeling business.

• Put all of your business expenses in one place to separate personal and business expenses.
• Build your company’s credit history, which will come in handy if you need to raise money in the future.

Step 8. Set up a phone system for your business

Getting a business phone is one of the most effective ways to keep your personal and professional lives separate and private. That isn’t the only advantage; it also aids in the automation of your business, provides legitimacy to your company, and makes it easier for potential customers to locate and contact you.

Wise business plans offer a variety of features for businesses, including Toll-free numbers, Coverage in US and Canada, team messaging and more. Try our business phone services today.

Step 9: Promote your expertise

Your company will require excellent marketing in order for people to be aware of and use the services you provide. One of the things you should do in the first few months of your remodeling business is market it.

You can advertise your business by handing out flyers, putting up billboards, or using the internet. Putting your brand on Craigslist is the best way to market today. You’ll get more leads and make more money if you use online marketing.

Tips for Growing a Remodeling Business

Here are some tips for contractors on how to handle increased demand and expand their remodeling business during a recession.

1. Keep your money safe

2. keep your lien rights safe, 3. carefully select remodeling clients, 4. make a precise bid, 5. keep track of your financial results, 6. don’t use your cash flow as a source of funding, 7. set up proper deposit and billing schedules, 8. make invoicing and payment collection more efficient, 9. learn the fundamentals of accounting, 10. make a backup plan , 11.  examine the length of your sales cycles, 4 key success factors.

• Possessing a high success rate in the past (including completed prior contracts):  Companies with a strong reputation for having the financial, managerial, and technical capacity for remodeling projects attract potential clients. Successful remodeling companies can show a portfolio of previous work and testimonials from happy clients.
• Workforce that is multi-skilled and adaptable:  Reputable tradespeople and subcontractors are available on a project-by-project basis for successful remodeling companies.
• Controlling costs effectively: Successful remodeling businesses maintain tight cost controls and have access to low-cost input materials to maintain competitive pricing.
• Product promotion which effective: To generate publicity and new contracts, successful remodeling companies have a strong marketing department.

The highlights of our recently developed remodeling business plan

Market analysis summary: remodeling business plan.

Over the five years to 2020, operators in the Commercial Property Remodeling industry have benefited from increased demand as a result of falling office rental vacancy rates and rising consumer spending, at least through 2019. 

Furthermore, in recent years, rising corporate profits have prompted businesses to renovate commercial properties, boosting demand for industry services. 

As a result, IBISWorld expects industry revenue to grow at a 4.4% annualized rate to $35.8 billion over the forecast period. However, the spread of COVID-19 (corona virus) has brought the global economy and, with it, industry activity to a halt in 2020. 

Industry revenue is expected to fall in 2020 due to expected decreases in the value of private nonresidential construction and corporate profit. At the same time, due to the rise in stay-at-home orders, office rental vacancies have increased.  As a result, revenue growth is expected to slow by 11.3% in 2020.

Product and Services

Interior room additions and alterations will account for 22.3 percent of industry revenue in 2020, according to industry contractors. Interior room alterations and additions are required for all downstream markets, including office buildings, commercial buildings, and other structures. 

When businesses relocate, commercial property contractors, for example, renovate their office interiors. Removing walls, doors, and other interior infrastructure can also help industry operators expand warehouses and other facilities. 

Over the last five years, demand for interior alterations and additions has risen in tandem with a rise in commercial construction spending.

Frequently Asked Questions

You’ll need to keep track of your material suppliers’ accounts, pay your crews on time, and keep your vehicles and tools in good working order. Fortunately, you can keep your office space to a minimum.

Owners of residential and commercial properties who want their property professionally renovated and are willing to pay a reasonable price for labor and materials. Large businesses that require renovations may have more space, allowing you to charge a higher rate.

Customers pay you for labor and materials for their renovation, which is how your remodeling business makes money. As part of your trade, you are responsible for providing your own tools. Paint, hardware, lumber, flooring, and other supplies, on the other hand, are purchased at wholesale prices and then charged to your customer at a premium. Your hourly labor costs will be determined by your level of expertise, the type of job you’re doing, and local labor rates.

The size and complexity of the job will determine your rates. Rates range from $45 to $85 per hour, with the possibility of lower or higher rates. To ensure that your client is getting a good deal, you should conduct a thorough competitive analysis. Between $3,000 and $15,000 is the average cost of a renovation project.

The standard markup on materials is 15%. A one-man company with multiple crews can earn around $20,000 per year working part-time, while a large contractor with multiple crews can earn in the seven figures when they complete multiple large jobs throughout the year.

Providing high-quality work that completely satisfies your customers is the most effective way to increase business and profit. For a successful remodeling business, you’ll need to make sure that quality control and customer service are always top priorities.

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Here's how you launch a profitable home renovation business.

Embarking on a home renovation project can be an exciting journey for homeowners looking to breathe new life into their living spaces.

Whether you're a seasoned DIY enthusiast aiming to tackle the project head-on or a novice seeking to transform your home with the help of professionals, renovating requires meticulous planning and commitment.

In this blog post, we'll navigate you through the crucial phases of home renovation, from conceptualizing your dream space to the final touches that make your house a home.

How you should prepare to launch a home renovation business

Market research and concept, choose a concept.

Choosing a concept is one of the first steps in starting a home renovation business because it defines the scope of your services, the style of your projects, and the target clientele. It's the blueprint that shapes your business identity and influences all subsequent decisions, such as the services you offer, the materials you use, the pricing structure, and your marketing approach.

A well-defined concept helps your renovation business stand out in a crowded market and attracts customers who are looking for the specific style or service you provide.

In essence, selecting the right concept is like sketching the initial design for a renovation project before you start the actual construction work.

To assist you in making an informed choice, we have summarized the most popular concepts for a home renovation business in the table below.

Pick an audience

When embarking on a home renovation business, it's crucial to understand the different needs and preferences of your potential clients. The concept of your renovation services should align with the specific requirements of the customer segment you aim to serve.

For instance, if you're targeting families with children, you might focus on creating safe, functional spaces with durable materials that can withstand the wear and tear of family life. You might also consider offering services that can be completed quickly to minimize disruption to the family's routine.

Conversely, if your ideal clients are young professionals, you might offer smart home integrations and modern, sleek designs that cater to a more tech-savvy and style-conscious demographic. These clients may also appreciate a focus on energy efficiency and low-maintenance solutions.

Understanding your audience is essential because it shapes every aspect of your home renovation business, from the services you offer to the marketing strategies you employ. It's akin to tailoring a suit; you need to measure and understand the client's preferences to ensure a perfect fit.

Moreover, knowing your target market enables you to communicate with them more effectively. If you're aware of who you're trying to reach, you can tailor your advertising and promotional efforts to the channels they are most likely to engage with.

In our guide to home renovation businesses , we've identified various customer segments that could be relevant for your company.

To help you visualize the potential customer base for your home renovation services, we've compiled a summary table with examples of different segments below.

Get familiar with the industry trends

When venturing into the home renovation business, it's crucial to stay abreast of the latest consumer trends to ensure your services meet the evolving demands of homeowners. By aligning your renovation offerings with these trends, you can attract a broader clientele and differentiate your business from competitors who may be adhering to outdated practices.

Emerging trends in home renovation reflect the changing lifestyles and preferences of homeowners. For instance, there's a growing emphasis on sustainability and energy efficiency, with many seeking renovations that reduce their carbon footprint and lower utility bills.

Additionally, the rise of smart home technology has led to an increased demand for renovations that integrate these systems seamlessly into the home environment. Homeowners are also looking for flexible living spaces that can adapt to their changing needs, such as multi-functional rooms and open-plan designs.

We regularly update our business plan for home renovation to include these new emerging trends, which we believe will help you create a thriving home renovation business.

For example, there's a significant interest in incorporating natural materials like wood and stone, which not only enhance the aesthetic appeal but also promote a connection with nature.

Moreover, as remote work becomes more common, creating dedicated home offices or workspaces is a trend that's gaining traction.

And let's not forget the importance of wellness-focused renovations, such as the inclusion of home gyms, saunas, or even spaces designed for meditation and relaxation.

Below is a summary table of the emerging trends in home renovation and their descriptions.

However, there are also some declining trends in the home renovation industry.

For instance, as sustainability becomes more important, there's a decline in the use of materials that are not eco-friendly or that have a high carbon footprint.

Also, with the shift towards more personalized and functional spaces, generic, one-size-fits-all renovations are becoming less popular.

Finally, with the increasing awareness of the impact of volatile organic compounds (VOCs), the use of paints, finishes, and other materials that emit these harmful chemicals is on the decline.

Choosing the ideal location

Choosing the right location for your home renovation project is essential for maximizing your investment and ensuring the end result meets your lifestyle needs and preferences.

Begin by assessing the local housing market. Understanding the value of homes in your area can guide your renovation budget and ensure you don't overcapitalize. If the neighborhood consists of starter homes, a modest renovation might be more appropriate. In contrast, upscale areas might warrant high-end finishes and additions.

Consider the logistics of renovation. A location that's easily accessible for construction crews and delivery of materials is crucial. Proximity to hardware stores and design centers can also be beneficial, reducing travel time and potentially speeding up the renovation process.

While you may not face direct competition in home renovation, being aware of the local real estate market is important. Are there many newly renovated homes in the area, or is yours set to be one of the first? A pioneering renovation could potentially uplift the neighborhood's value, but it also carries more risk.

Cost is a significant factor. Ensure that the renovation costs are in line with the home's post-renovation market value. It's often wise to consult with a real estate agent or appraiser to understand the potential return on investment for your specific renovation plans.

Negotiating with contractors can have a substantial impact on your budget. This might include getting multiple quotes, discussing timelines that could affect costs, or sourcing materials yourself to save money.

Consider the potential for future developments in the area. Is the neighborhood growing, with new amenities that could enhance your lifestyle and home value? The ability to adapt your space in the future without relocating can be a significant advantage.

Accessibility for heavy machinery and the availability of parking for contractors are often overlooked but can significantly influence the ease of your renovation. A location that's contractor-friendly is more likely to ensure a smooth renovation process.

Using market research and housing trend analysis tools can provide insights into the best areas for your renovation. These tools can help identify neighborhoods with the most potential for increased property values.

The decision between renovating in a city center or a suburban area depends on your personal preferences and lifestyle. City centers offer proximity to amenities but might come with restrictions on renovations and higher costs. Suburban areas might offer more space and flexibility for extensive renovations but could be further from work or entertainment.

Being near schools, parks, or transport hubs can increase the desirability of your home post-renovation, particularly if you plan to sell or rent it out in the future.

Understanding local zoning laws, building codes, and other legal requirements is crucial to ensure that your renovation is permissible. Compliance with these regulations from the start can save you time, money, and legal headaches in the long run.

Finally, evaluating the long-term potential of your renovation is essential. Consider future area developments that could affect your property's value, either positively by enhancing the neighborhood or negatively by increasing congestion or changing the area's character.

Startup budget and expenses

Calculate how much you need to start.

On average, the initial budget for a home renovation can vary significantly, ranging from $15,000 to $45,000 for minor updates and cosmetic changes to $60,000 to $200,000 or more for major remodels and high-end finishes .

If you want to know the precise budget you will need for your home renovation and also get a comprehensive list of expenses, you can use the financial plan we have created, tailored to home renovations . This excel file is extremely user-friendly and will provide you with an instant and detailed analysis of your renovation project.

The budget can fluctuate greatly depending on the scope of the renovation. Structural changes, such as removing or adding walls, can significantly increase costs, as can updating old electrical or plumbing systems.

The size of the home is another important factor. Larger homes require more materials and labor, which can raise the overall cost of the renovation.

The quality of materials and finishes also impacts the budget. High-quality, durable materials are more expensive but can offer better aesthetics and longevity. On the other hand, opting for more affordable materials can lower upfront costs but may not last as long or look as appealing.

Even with a limited budget, it's possible to undertake a home renovation, but it requires careful planning and prioritization. The very minimum budget could be around $15,000 to $30,000 if you focus on essential updates, choose cost-effective materials, do some of the work yourself, and keep the project scope small.

To maximize a limited renovation budget, consider the following tips.

Identify all your expenses

The expenses for a home renovation can include costs for materials, labor, permits, design and architecture services, insurance, and a contingency fund for unexpected expenses.

Materials for a home renovation can vary greatly depending on the quality and type of materials chosen. This can include anything from paint and flooring to fixtures and cabinetry. On average, material costs can range from $10,000 to $60,000. Choosing high-end finishes or custom work will increase these costs, while opting for more standard or budget-friendly options can help save money.

Labor is another significant expense, as skilled tradespeople such as electricians, plumbers, carpenters, and painters are needed to complete the work. Labor costs can range from $20,000 to $100,000 or more, depending on the scope and complexity of the renovation.

Permits are necessary for most renovation projects to ensure that the work complies with local building codes. Permit costs can vary widely by location and project size, typically ranging from a few hundred to several thousand dollars.

Design and architectural services are important for planning your renovation, especially for extensive remodels or structural changes. These services can cost between $2,000 and $20,000, depending on the complexity of the design work required.

Insurance is essential to protect your property and the renovation process against damage or accidents. Additional insurance coverage for a renovation project can range from $500 to $3,000, depending on the project size and value.

Finally, it's wise to have a contingency fund for unexpected expenses that may arise during the renovation. A good rule of thumb is to set aside 10-20% of the total project cost for this purpose.

Here is a summary table to make it easier to digest. For a full breakdown of expenses, please check our financial plan for home renovations .

Business plan and financing

Make a solid business plan.

Embarking on a home renovation project is an exciting venture, and just like writing a business plan when opening a bakery , crafting a detailed plan for your renovation is essential.

Why is this so important? A business plan for home renovation acts as a strategic guide, detailing your vision, the scope of work, timelines, and the resources required. It's a critical tool for keeping the project on track and within budget. Moreover, if you're seeking funding or partnerships, a robust business plan can showcase the feasibility and profitability of your renovation project.

The core elements of a home renovation business plan should include a thorough market analysis, financial projections, and an operational strategy. Market analysis will help you understand the demand for renovated properties in your area, the types of renovations that add the most value, and the competitive landscape. This research will inform your decisions on the extent of renovations and the target market for the finished property.

Financial planning is crucial. This section should detail the estimated costs for materials, labor, permits, and any other expenses related to the renovation. It should also include financial forecasts such as expected increase in property value, potential rental income, and a break-even analysis. A comprehensive financial plan provides a clear picture of the expected return on investment (ROI) and helps in securing financing. You can find an example in our financial plan for home renovation .

While there are commonalities with other business plans, a home renovation plan will focus on specific areas such as project management (timelines and milestones), contractor selection and management, and regulatory compliance (building codes and permits).

To create an effective home renovation business plan, thorough research and realistic financial projections are vital. Engage with real estate experts, potential buyers or renters, and renovation professionals to gain insights into the market and validate your strategy. Also, consider the scalability of your renovation model, whether you plan to renovate a single property or establish a renovation business.

For a home renovation project, it's also important to establish a strong brand and marketing strategy. This could involve showcasing before-and-after photos of your projects, sharing customer testimonials, or highlighting any unique features or eco-friendly aspects of your renovations.

Success in home renovation depends on meticulous planning, a deep understanding of the market, prudent financial management, and efficient execution of the project plan.

Remember, a business plan is a dynamic document that should be reviewed and adjusted as your renovation project progresses and as market conditions change.

Get financed

Planning a home renovation but find yourself short on funds? Don't fret, there are numerous financing options available to help you turn your house into your dream home.

Home renovations can be funded through various means: personal savings, home equity loans, personal loans, credit cards, and even government grants or rebates for certain energy-efficient upgrades.

Each financing method comes with its own set of benefits and considerations.

Using personal savings is the most straightforward method, as it involves no borrowing and no interest. However, it requires having a significant amount of money set aside and may deplete your emergency or other savings.

Home equity loans or lines of credit allow you to borrow against the equity in your home. These often have lower interest rates than personal loans or credit cards and can provide a substantial sum for major renovations. The downside is that your home serves as collateral, which means you could risk foreclosure if you can't make the payments.

Personal loans are unsecured loans that don't require collateral, but they usually come with higher interest rates. They're a good option for smaller projects if you have a good credit score and don't want to risk your home.

Credit cards can be convenient for purchasing materials or paying contractors, and they may offer rewards. However, they typically have high-interest rates, making them a costly option if the balance isn't paid off quickly.

Government grants or rebates are available for specific types of renovations, such as those that improve energy efficiency. These don't have to be repaid, but they often have strict eligibility requirements and may only cover a portion of the costs.

To secure financing, whether through loans or credit, you'll need to demonstrate your creditworthiness and have a clear plan for your renovation. This might include detailed quotes from contractors , a timeline for the renovation, and an appraisal of your home's value post-renovation.

Lenders will look at your credit score, income, and debt-to-income ratio to determine your loan eligibility. For home equity loans, they'll also consider the amount of equity you have in your home. you should have a realistic budget and to ensure that the renovation will not only improve your quality of life but also add value to your home.

Here's a summary table of the various financing options mentioned for home renovation, along with their advantages, considerations, and potential uses:

Legal and administrative setup

Permits and licenses.

Starting a home renovation business involves careful consideration of various regulations and requirements to ensure the safety of your clients' properties, the well-being of your employees, and the legal protection of your business.

The specific permits, licenses, building codes, inspection schedules, consequences of non-compliance, and insurance policies you'll need will vary by location, but there are general guidelines that apply in many places.

First, you'll need to obtain the necessary business permits and licenses.

This typically includes a general contractor's license from your state or local licensing board, which may require passing an exam and proving a certain level of experience or education in construction. Depending on the services you offer, you might also need specialty licenses for plumbing, electrical, or HVAC work. A business license from your city or county is also essential, along with a sales tax permit if your state collects sales tax on the services you provide.

It's crucial to check with your local government and professional licensing boards to understand the specific requirements for your area.

Regarding building codes and regulations, home renovation projects must comply with local construction codes to ensure the safety and structural integrity of the renovated properties.

This includes obtaining the proper building permits before starting any significant work, following zoning laws, and adhering to specific codes related to electrical, plumbing, and structural work. Inspections are conducted at various stages of the renovation process to ensure compliance with these codes. The frequency and type of inspections can vary depending on the scope of the project, but they often include an initial inspection, several follow-up inspections during the renovation, and a final inspection upon completion.

Non-compliance with building codes and regulations can result in consequences ranging from fines to a stop-work order on the project until violations are corrected.

In severe cases, non-compliance can lead to legal action or the requirement to undo or redo work. It's essential to take these regulations seriously and ensure your home renovation business complies with all local construction standards.

Insurance is another critical aspect of protecting your home renovation business. At a minimum, you'll need general liability insurance to cover accidents or damage that occur on your clients' properties.

Property insurance is also important to protect your business's physical assets, such as tools and equipment, from damage or theft. If you have employees, workers' compensation insurance will likely be required by law to cover injuries or illnesses that occur as a result of their work.

Additionally, considering builder's risk insurance might be wise, as it can protect your business from specific risks associated with construction projects, such as damage due to weather or vandalism during the renovation process.

Business Structure

The three common structures for starting a home renovation business are LLC (Limited Liability Company), partnership, and sole proprietorship. Each has distinct features and implications for your business operations.

Please note that we are not legal experts (our expertise is in business and financial planning) and that your choice should be informed by your willingness to take on risk, your preferred tax handling, and your plans for growing and potentially selling your home renovation business.

In simple terms, a sole proprietorship is the easiest to manage but comes with personal liability. A partnership allows for shared responsibility but necessitates clear agreements to mitigate risks. An LLC provides a balance of liability protection and operational flexibility, which can be advantageous for businesses aiming to expand.

Consider your long-term objectives, and seek advice from a financial advisor or attorney to make the most informed decision for your home renovation business.

To help you decide, here's a summary table.

Getting started to launch a home renovation business

Offer development, craft your offer.

Your services and the quality of your work will be the reason why your home renovation business is successful (or why it is failing).

To start, identify the preferences and needs of your target market through direct engagement, such as in-home consultations and social media interactions, and indirect research, like observing trends in your area and reviewing what successful competitors are doing.

Once you have a clear picture of your target market's preferences, you can begin to craft a service offering that not only meets their needs but also stands out.

Incorporating sustainable and energy-efficient materials into your renovation projects is a fantastic way to enhance appeal and responsibility towards the environment.

This approach not only supports local suppliers and reduces your carbon footprint but also ensures that your renovations are modern and of high quality. Make connections with local vendors to understand what materials will be available throughout the year. This knowledge allows you to plan your projects seasonally, offering special promotions that can attract customers looking for the most eco-friendly and cost-effective options. Seasonal planning also creates anticipation among your customers, as they look forward to the perfect time to start their renovation projects.

To ensure your home renovation services stand out in a competitive market, focus on uniqueness and quality.

This can be achieved by offering specialty services that are hard to find elsewhere, such as restorations of historic homes, smart home integrations, or catering to specific design preferences like minimalist or industrial styles. Telling the story behind your projects, such as the transformation journey or the inspiration behind a design, can also add a unique appeal.

Ensuring consistency and quality in your renovation work involves establishing rigorous standards and processes.

This can include detailed project plans with precise timelines and instructions, thorough training for your renovation staff, and regular quality checks. Consistency is key to building trust with your clients, as they will know exactly what to expect at each stage of their home renovation. Invest in high-quality materials and equipment, and don’t shy away from refining your service offerings until you're confident they meet your standards.

Also, utilising customer feedback is essential for continuous improvement and refinement of your home renovation services. Create channels for feedback, such as follow-up calls, online surveys, and social media engagement, to understand what your clients love and where there might be room for improvement.

Be open to constructive criticism and willing to make changes based on client input. This not only helps in refining your services but also shows your clients that you value their opinions, fostering loyalty and repeat business.

Determinate the right pricing

When embarking on a home renovation business, it's crucial to establish a pricing strategy that balances profitability with customer satisfaction. Here's a methodical approach to setting your prices.

Firstly, you must calculate your costs thoroughly, which include materials, labor, permits, equipment, overhead, and any other expenses related to the renovation projects you undertake.

Ensuring your prices cover these costs is fundamental to your business's financial health.

Next, analyze the competition and the general market to gauge the going rates for renovation services. While you don't need to mimic these prices, this research provides a valuable reference point.

Understanding the price sensitivity and preferences of your target market is also key. Gather insights through customer interactions, surveys, or by experimenting with different price points and observing the effect on demand. This will help you find the sweet spot where customers feel they're getting good value without being overpriced.

Psychological pricing strategies can be effective in the home renovation industry as well.

For example, pricing a project at $9,950 instead of $10,000 can make a significant psychological difference to a client, even though the actual price difference is relatively small. However, this should be used sparingly to maintain the perceived value of your services.

The perceived value is crucial in home renovation pricing.

By using high-quality materials, providing exceptional workmanship, and delivering excellent customer service, you can justify higher prices. Clients are often willing to pay more if they believe the renovation will enhance their home's value and their quality of life.

Seasonal pricing strategies can also be beneficial. For instance, offering discounts for renovations during the off-season can help maintain steady business throughout the year.

When introducing new services, consider introductory pricing such as limited-time discounts or package deals to entice customers to try them. Once these services gain traction, you can adjust the prices based on demand and cost factors.

For services booked online versus in-person consultations, consider the different costs and customer expectations. Online bookings might include additional convenience fees or offer a slight discount to encourage digital engagement.

Finally, the psychological impact of discounting services in the home renovation sector should be carefully considered. While discounts can stimulate business and attract new clients, too much discounting can undermine your brand's perceived value and lead to a reputation for being cheap. Use discounts strategically, for instance, to fill your schedule during slower periods without setting a precedent for constant price reductions.

Manage relationships with your suppliers

Poor relationships with suppliers could derail your home renovation business swiftly.

Conversely, cultivating robust partnerships with suppliers ensures a consistent supply of high-quality materials and fixtures.

Engage in regular communication, ensure prompt payments, and show appreciation for their products and services to build loyalty and dependability. Be clear about your expectations and requirements, and make an effort to visit their showrooms or manufacturing sites. This will enhance your understanding of their offerings and constraints, which is crucial for effective collaboration.

Consider negotiating long-term contracts for essential materials to lock in favorable prices and secure availability. However, it's also wise to have a network of alternative suppliers to protect against potential shortages.

For inventory management, strategies such as Just-In-Time (JIT) can be particularly useful in home renovation. This method means materials are delivered exactly when needed for a project, reducing the need for storage space and minimizing the risk of damage or loss. Keep a close eye on project timelines to adjust material orders accordingly, avoiding excess inventory that could tie up capital.

Technology can significantly enhance inventory management and reduce material waste in home renovation.

Adopting an inventory management system that integrates with project management software allows for real-time tracking of material usage and project progress. This technology can help with precise ordering, streamline procurement processes, and identify trends that can inform future project planning and cost estimation.

Additionally, digital tools can improve communication with suppliers, making it easier to adjust orders quickly and collaborate on project needs.

Scaling home renovation operations presents challenges such as ensuring consistent quality, managing increased material costs, and maintaining high standards of workmanship. Address these challenges by standardizing work procedures, providing comprehensive training to your team, and investing in tools and equipment that boost efficiency without sacrificing quality.

As you scale, you'll need more materials, so negotiate with suppliers for volume discounts without compromising on material quality. Quality control becomes increasingly important as your business grows, necessitating strict adherence to building codes and more frequent inspections.

Implementing effective cost control measures involves a meticulous review of every aspect of sourcing and using materials for home renovations. Regularly renegotiate with suppliers to ensure you're receiving the best value for your money without sacrificing quality.

Also, explore alternative materials that may offer cost savings or are more readily available at certain times of the year. Use technology to track and analyze expenses, waste, and inventory levels to pinpoint opportunities for improvement. Reducing waste not only lowers costs but also supports sustainable practices, which can be a selling point for eco-conscious clients.

Hire the right people

When starting a home renovation business, you should carefully consider your staffing needs. Initially, you may not need a full team, especially if you're working with a tight budget.

At the core, your home renovation business will require a team that can handle construction, design, and project management.

For construction, you'll need experienced general contractors and specialized tradespeople such as electricians, plumbers, and carpenters. A lead contractor with a strong track record and the ability to manage a crew is essential.

For design, an interior designer or architect can help translate client visions into practical renovation plans. They should have a good eye for aesthetics and be up-to-date with building codes and regulations.

Project management is crucial for keeping renovations on schedule and within budget. A project manager or owner-operator with experience in the renovation industry can oversee operations, manage timelines, and coordinate between clients and the construction team.

Some roles, like specialized stonemasons for custom work or landscape designers for outdoor projects, may not be necessary right away. These positions can be filled as your business expands and the demand for such services increases. Outsourcing tasks such as accounting, marketing, and legal services can be a strategic way to focus on your core competencies while utilizing external expertise.

When hiring, prioritize candidates with a mix of technical skills, experience, and a commitment to quality workmanship.

For construction roles, look for certifications and hands-on experience in the renovation or construction industry. Design staff should have formal training in design or architecture, as well as a portfolio of past work. For project managers, seek individuals with a background in construction management, strong organizational skills, and leadership qualities.

To ensure a good fit for your company's culture and the specific demands of home renovation, consider practical assessments such as mock design challenges or problem-solving scenarios related to construction.

Look for candidates who show a genuine passion for renovation and design, as well as the ability to adapt to the dynamic nature of the industry.

Finding the right candidates can be challenging. Utilize trade schools, professional networks, and social media platforms to reach potential hires. Networking within local trade associations and attending industry job fairs can also be effective. Offering apprenticeships can help you connect with emerging talent from trade programs.

Here is a summary table of the different job positions for your home renovation business, and the average gross salary in USD.

Running the operations of your home renovation company

Daily operations.

Managing the day-to-day operations of your home renovation business can be streamlined with the right approach and tools, ensuring projects are completed on time and within budget.

Firstly, utilizing a project management software tailored for home renovations can significantly improve efficiency.

Choose a project management tool that integrates task scheduling, budget tracking, and client communication. This integration allows you to monitor project timelines, control costs effectively, and maintain clear communication with clients throughout the renovation process.

Many project management platforms also offer mobile access, which is crucial for updating tasks and accessing information on-site.

For budget management, you need software that can track your expenses and compare them with your initial estimates in real-time.

The best systems enable you to set up alerts for budget overruns and provide reports on financial performance, helping you stay on top of your finances. This is key in preventing cost overruns and ensuring profitability by allowing you to adjust your plans based on ongoing financial insights.

Some budget management tools also offer features like receipt scanning and categorization, which are essential for keeping track of all expenses and streamlining the accounting process.

As mentioned earlier in this article, maintaining strong relationships with suppliers and subcontractors is vital for a home renovation business's success.

Establish clear communication channels and set expectations early on regarding material quality, delivery schedules, and payment terms. A solid relationship can lead to better pricing and reliability. It's also prudent to have alternative suppliers and subcontractors to ensure you can always meet your project needs.

Keeping your team motivated and efficient is about creating a supportive work environment and promoting a culture of safety, appreciation, and professional development.

Regular safety briefings, clear communication of project goals and expectations, and constructive feedback are essential. Acknowledging and rewarding excellent performance also helps in maintaining high morale. Ensure that work schedules are fair and considerate of your employees' well-being.

Ensuring that every client is satisfied starts with the professionalism of your team, the quality of your work, and the communication you maintain with the client.

Train your staff to be professional, courteous, and detail-oriented. Encourage them to provide regular updates to clients, making the renovation process transparent and reassuring.

Maintaining a clean and safe work site, with clear signage and respect for the client's property, also contributes to a positive client experience.

Effective customer service policies for a home renovation business might include a quality guarantee, clear change order procedures, and a system for gathering and acting on client feedback.

Make it easy for clients to provide feedback, whether in person, through your website, or via email. Respond to feedback promptly and constructively, showing that you value their opinions and are dedicated to addressing their concerns.

Handling client feedback and complaints professionally is crucial. Always listen to the client's concerns fully before responding. Apologize where necessary and offer a solution or compensation, such as corrective work or a discount on future services.

Use negative feedback as an opportunity to refine your operations, craftsmanship, or client service. Turning a less-than-ideal situation into a positive outcome can often secure a satisfied client and lead to future referrals.

Revenues and Margins

Know how much you can make.

Understanding the financial dynamics of a home renovation business is crucial for success in this industry.

We have an in-depth article on the profitability of home renovation businesses that you might find useful. Below, we'll provide a brief overview.

One key metric for home renovation businesses is the average project size, which is the average amount a client spends on a renovation project.

The average project size can vary greatly depending on the scope of services offered and the target market. For full-scale renovation companies that handle extensive projects, including structural, electrical, and plumbing work, the average project size could be quite substantial, ranging from $50,000 to $300,000 .

For businesses specializing in cosmetic updates, such as painting, flooring, or cabinetry, the average project size might be smaller, perhaps $10,000 to $50,000 .

Specialized renovation services, like kitchen or bathroom remodels, can also command higher project sizes due to the complexity and high-end materials often involved, with averages between $20,000 and $60,000 .

When it comes to revenue, it's highly variable and can be influenced by factors such as location, market demand, and the scale of operations. Urban renovation companies might see annual revenues ranging from $500,000 to several million dollars , depending on their size and reputation.

Rural renovation businesses may have lower revenue expectations due to a smaller client base, with annual revenues often ranging from $100,000 to $500,000 .

Newly established renovation businesses may experience lower revenues initially as they work to establish a reputation and client base, with monthly revenues potentially under $20,000 .

Conversely, well-established renovation companies with strong brand recognition and a solid portfolio of completed projects can achieve higher and more consistent revenues.

Specialized renovation services may see revenues that fluctuate based on the popularity of the specific renovations they offer and the seasonality of the industry.

Home renovation businesses don't just earn money from the actual renovation work. They can diversify their income with various revenue streams.

If you're looking for inspiration, here's a table that outlines many different ways a home renovation business can generate income.

Understand your margins

When considering a home renovation, you should understand that the total cost of the project doesn't equate to the value it adds to your home. To get a clearer picture of the financial impact, we need to delve into the margins and profitability of home renovation projects.

Let's explore the concepts of gross and net margins in the context of home renovations.

If you're looking to calculate your own margins and determine the potential return on investment for your renovation project, you can adjust the assumptions in our financial model designed for home renovations .

Gross margins for home renovation projects can vary significantly, typically ranging from 30% to 50%.

Gross margin is calculated by subtracting the direct costs associated with the renovation (such as materials, labor, and subcontractor fees) from the total revenue, which in this case is the added value to the property. This figure is then divided by the total revenue and multiplied by 100 to get a percentage.

Net margins consider not only the direct costs but also additional expenses such as permits, design fees, insurance, and interest on loans if applicable. This figure is obtained by subtracting all these operating expenses from the gross profit.

Net margins provide a more comprehensive view of a renovation project's profitability and are generally lower than gross margins, with industry averages often ranging from 10% to 20%, reflecting the true profitability after all costs are considered.

Different types of renovation projects—basic upgrades, full remodels, and luxury renovations—can have varying profit margins due to differences in their scale, complexity, and target market preferences. Here is a table to illustrate these differences.

Margins in home renovation are influenced by factors such as the scope of the project, material choices, and the efficiency of the work performed.

A project with a wide scope can attract a larger market but may also lead to increased costs and complexity.

Material selection is critical; choosing cost-effective yet durable materials can help maintain healthy margins. The efficiency of labor, including the work of subcontractors, can significantly affect the overall cost and thus the net margin.

Ongoing expenses that impact renovation margins include material costs, labor, permits, and design fees. Material costs can fluctuate based on market conditions, which can affect gross margins. Labor is a significant expense, especially for specialized trades. Permits and design fees are necessary costs that can vary depending on the project's complexity and location.

Renovations targeting niche markets, such as eco-friendly or smart home upgrades, may have different margin dynamics compared to more traditional renovations.

While niche renovations can command higher prices, they also face higher production costs and potentially limited market size, which can impact overall margins.

External factors such as housing market trends, economic conditions, and consumer preferences also play a crucial role in renovation margins. A booming housing market can increase the value added by renovations, while economic downturns can reduce the return on investment. Staying informed about consumer trends and tailoring renovations to meet current demands can help manage these fluctuations.

Overcoming the challenge of maintaining healthy margins amidst rising material and labor costs is significant. Renovators can address these challenges through strategic planning, efficient project management, and by leveraging technology for productivity enhancements.

Regularly tracking and analyzing financial performance, including gross and net margins (which you can do with our financial model specific to home renovations ), is crucial for ensuring the financial success of a renovation project.

Implement a strong marketing strategy

Marketing for a home renovation business doesn't have to be overly complicated or time-consuming. We understand that you'll be focused on managing projects and ensuring client satisfaction. That's why we've crafted a straightforward and impactful marketing strategy, which you can find in our business plan for home renovation services .

Establishing a strong brand for your home renovation business is essential.

Your brand represents your company's identity and reputation. It's not just your business name or logo; it's the quality of your work, the customer service you provide, and the values you uphold, such as reliability or innovative design. A well-defined brand sets you apart in the competitive home renovation market and helps to cultivate a base of loyal clients.

Begin your marketing plan by identifying your target audience. Who are your ideal clients? What are their priorities? Do they value energy-efficient upgrades, luxury remodels, budget-friendly solutions, or perhaps historical restorations? Knowing your audience will shape your branding and marketing efforts.

When it comes to promotion, digital marketing is a potent tool for home renovation businesses. Platforms like Pinterest and Instagram are excellent for showcasing your renovation projects with before-and-after photos and engaging stories.

Offer insights into your renovation process, which adds authenticity and demonstrates the skill and attention to detail that your team brings to each project.

Client testimonials and reviews can foster trust and inspire potential customers to choose your services. Sharing home renovation tips or design trends can also engage your audience, positioning your business as a knowledgeable leader in the industry.

Effective content strategies for home renovation businesses include highlighting the transformation of spaces, showcasing unique or challenging projects you've completed, and emphasizing any eco-friendly or innovative materials and techniques you employ. Partnering with local real estate agents or interior designers can also increase your visibility.

However, not all marketing tactics will be suitable for your business. For instance, if you serve a specific local area, national advertising may not be cost-effective. Similarly, if your specialty is kitchen remodels, focusing on landscaping services won't align with your expertise.

Even with a modest budget, there are clever ways to attract new clients.

First, consider participating in local home shows or community events where you can showcase your work and connect with potential clients face-to-face.

You might also offer free consultations or estimates to get people interested in your services.

Collaborating with local suppliers or home improvement stores can broaden your network.

Implementing a referral program can incentivize satisfied clients to recommend your services to others. Simple referral discounts or rewards for both the referrer and the new client can be quite effective.

Lastly, never underestimate the power of word-of-mouth marketing. Encourage your happy clients to share their positive experiences by offering them a discount on future services for successful referrals.

Grow and expand

We want you to thrive with your home renovation business. We trust that the insights provided here will help you on your journey to growth and success.

Imagine you're at the helm of a thriving home renovation business, with solid profit margins and robust cash flow. Now is the time to strategize on scaling and expanding your enterprise.

There's always potential for greater achievements, and we're here to show you the path to even more success.

Also, please note that we have a 5-year development plan specifically designed for home renovation businesses in our business plan template .

Successful home renovation business owners often possess qualities like resilience, adaptability, a comprehensive understanding of their trade, and the ability to connect with and understand their clients. These traits are essential as they navigate the complex process of growing their business.

Before expanding your service offerings, consider the existing market demand, how new services complement your current ones, and the impact of these additions on your operations.

Market research is critical in this decision-making process. By examining client preferences, current home design trends, and the performance of similar services in the market, you can make informed decisions that align with your business's capabilities and client expectations.

Evaluating the success of current operations involves analyzing project timelines, client feedback, and operational efficiency. If your business consistently completes projects on time, receives positive feedback, and operates efficiently, it may be time to consider expansion.

Opening additional branches should be based on clear evidence of demand, a deep understanding of the target market, and the financial health of your current operation.

Franchising offers a way to expand with lower capital risk, leveraging the entrepreneurial spirit of franchisees. However, it requires a strong brand, proven operational systems, and the ability to support franchisees. Opening owned branches provides more control but requires more capital and direct management. Each model has its pros and cons, and the choice depends on your business goals, resources, and preferred growth strategy.

Digital channels, including social media and a robust website, can significantly increase a home renovation business's visibility and client base. Establishing an online presence allows you to showcase your work to a broader audience and adapt to the increasing demand for digital engagement.

This strategy requires an understanding of digital marketing, project portfolio management, and maintaining a strong online reputation.

Branding is crucial as it sets your business apart in a competitive market. A strong, consistent brand identity across all branches and platforms can enhance client loyalty and attract new business. Strengthen your brand by ensuring that every client interaction reflects your business's values, professionalism, and quality of work.

Maintaining consistency across multiple branches is challenging but vital. This can be achieved through detailed operational manuals, training programs, and quality control systems.

Regular visits and audits, along with fostering a strong, shared culture, help ensure each branch upholds the standards that contributed to your original location's success.

Financial metrics and business benchmarks indicating readiness for expansion include consistent profitability, a strong cash flow, and meeting or exceeding project projections over a significant period.

Additionally, having a scalable business model and the operational capacity to support growth is crucial.

Partnerships with suppliers and participation in home shows can introduce your home renovation business to new clients and markets. These opportunities allow for creative collaboration, community engagement, and brand visibility, contributing to your business's growth.

Scaling operations to meet increased demand involves logistical considerations such as hiring additional skilled labor, efficient project management, and possibly expanding your office or warehouse space. Ensuring that your supply chain can handle the increased volume without sacrificing quality is key.

Finally, it's essential that your expansion efforts stay true to your home renovation business's core values and long-term goals. Growth should not come at the expense of the quality and customer service that made your business successful in the first place.

Regularly revisiting your business plan and values can help ensure that your expansion strategies align with your vision and mission, sustaining the essence of your business as it grows.

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How to Start a Remodeling Business

Your remodeling business might be a one person show where you personally complete kitchen, bathroom, bedroom remodels or additions to homes and businesses. In another business model, you could serve as a general contractor and hire employees or subcontractors to help complete jobs in a more efficient manner.

Learn how to start your own Remodeling Business and whether it is the right fit for you.

Ready to form your LLC? Check out the Top LLC Formation Services .

Start a remodeling business by following these 10 steps:

• Plan your Remodeling Business
• Form your Remodeling Business into a Legal Entity
• Register your Remodeling Business for Taxes
• Open a Business Bank Account & Credit Card
• Set up Accounting for your Remodeling Business
• Get the Necessary Permits & Licenses for your Remodeling Business
• Get Remodeling Business Insurance
• Define your Remodeling Business Brand
• Create your Remodeling Business Website
• Set up your Business Phone System

We have put together this simple guide to starting your remodeling business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas .

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

What will you name your business?

• What are the startup and ongoing costs?
• Who is your target market?

How much can you charge customers?

Luckily we have done a lot of this research for you.

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Remodeling Business Name Generator

If you operate a sole proprietorship , you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name , we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability .

It's very important to secure your domain name before someone else does.

Want some help naming your remodeling business?

Business name generator, what are the costs involved in opening a remodeling business.

If you are simply offering up your own skills and time as a part-time remodeler, the start-up cost will be around $50,000 to $75,000 as you will need a complete set of tools, a vehicle for transporting tools and supplies, and the proper licensing and insurance in order to operate in your state and locality.  If you are looking to enter the business world offering major renovation services, expect to have start-up capital of $250,000 to $500,000 as you'll need to be able to purchase your first few orders of materials and hire staff before your customer pays you for the completed job.

What are the ongoing expenses for a remodeling business?

You will need to maintain accounts with material suppliers, pay your crews on a regular basis, and maintain vehicles and tools. Fortunately, your office space can be fairly minimal.

Who is the target market?

Home and business owners who are seeking to have their property professionally renovated and are willing to pay a fair price for labor and materials. Large businesses that need renovating may have more space, allowing you to charge more for your work.

How does a remodeling business make money?

Your remodeling business generates income by charging your customers for labor and materials for their renovation. You are responsible for providing your own tools, as part of your trade.  However paint, hardware, lumber, flooring, and other supplies are purchased by you at wholesale prices and then you charge your customer for them at a premium price.  Your hourly labor costs will be determined by level of expertise, the type of job that is being completed, and local competitive rates.

Your rates will vary depending on size and complexity of the job. Rates vary from $45/hr to $85/hr and can be lower or higher. You will want to complete an extensive competitive comparison to ensure your client is getting a good value. The average renovation project costs between $3,000 and $15,000.

How much profit can a remodeling business make?

The typical markup on materials is 15%.  Income for a one-man company can be around $20,000 a year working part-time while a large contractor with multiple crews can see income in the seven figure range when they complete multiple large jobs over the year.

How can you make your business more profitable?

Ensuring quality work that completely satisfies your customer is the number one means of generating more business, and therefore additional profit. You will need to ensure the quality control and customer service are always of top priority for your successful remodeling business.

Want a more guided approach? Access TRUiC's free Small Business Startup Guide - a step-by-step course for turning your business idea into reality. Get started today!

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship , partnership , limited liability company (LLC) , and corporation .

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your remodeling business is sued.

Form Your LLC

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services . You can choose to hire a registered agent or act as your own.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

You can acquire your EIN through the IRS website . If you would like to learn more about EINs, read our article, What is an EIN?

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil .

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history , which can be useful to raise money later on.

Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a remodeling business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits .

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses .

Services Contract

Remodeling businesses should require clients to sign a services agreement before starting a new project.  This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership. Here is an example of one such services agreement.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance . This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance . If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

FInd out what types of insurance your Remodeling Business needs and how much it will cost you by reading our guide Business Insurance for Remodeling Business.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners , we'll give you helpful tips and advice for creating the best unique logo for your business.

Recommended : Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker .

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator . Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market a remodeling business

Direct Mail campaigns can help your name appear in front of local homeowners. Ask to sponsor a do-it-yourself workshop at your local big box store.  Make sure to add your company name on the side of all the vehicles that appear at the job site and where you order supplies. Consider joining groups such as the National Association of Home Builders or the National Association of the Remodeling Industry to add their advertising power to your own.

How to keep customers coming back

Potential clients love to see an example of the work they might hire you to complete.  Position signs in front of homes that you are working on or have recently completed. Ask satisfied customers if you can add pictures of their new kitchen to your website and social media. Encourage customer feedback, as their word will carry far more weight than a simple advertisement. Be willing to return to the jobsite to complete touch ups for up to a year, as that happy customer is the most likely individual who will hire you again. Always provide professionally prepared contracts and business cards and make sure your phones are answered in a businesslike manner.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business .

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

• All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
• Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
• Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Recommended : Get started today using our recommended website builder or check out our review of the Best Website Builders .

Other popular website builders are: WordPress , WIX , Weebly , Squarespace , and Shopify .

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.

Recommended Business Phone Service: Phone.com

Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.

Is this Business Right For You?

A remodeling business is a great investment for the person who has a passion for home improvement, with extensive knowledge of multiple construction skills and enjoys a background of business and accounting.  Dedication to completing work thoroughly with close attention to detail while providing superior customer service is also required.

Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

Entrepreneurship Quiz

What happens during a typical day at a remodeling business?

Whether you simply manage the business or are swinging a hammer with the crew, you might be expected to:

• Participate in demolition, installation of flooring, walls, and cabinetry
• Source supplies and materials for the job site
• Maintain open communication channels with the customer, updating them on progress
• Schedule your reliable crews and subcontractors in a time-efficient manner
• Maintain proper licensing to operate in your state
• Train new crew members to maintain your high standards
• Complete punch lists after you finish a job
• Establish relationships with tool and materials vendors/suppliers
• Maintain payroll records/pay your crews on a timely basis
• Collect payment from customers
• Create contracts for customer approval
• Promote your business to generate new jobs for the future

What are some skills and experiences that will help you build a successful remodeling business?

Your remodeling business will find greater success when you have a wide range of skills under your belt as the owner/operator. These may include, but are not limited to:

• Solid understanding and experience in construction techniques with regards to kitchen, bathrooms, siding, windows, additions, and flooring
• Appreciation and knowledge of quality materials and their fair pricing structure
• Good accounting knowledge to maintain accurate records for accounts payable/receivable and payroll requirements
• Excellent time management that lines up additional crews to complete the next phase of construction without waiting
• Good ability to establish and maintain positive relationships with customers by providing clear and honest communication throughout the remodel
• Ability to identify experienced crew members you are hiring as subcontractors or as employees
• Knowledge of safety standards, permits, and licenses required to operate a safe workplace

What is the growth potential for a remodeling business?

Some individuals work on a part-time basis by themselves completing renovations for local homeowners.  However, with the right business model in place you can be responsible for finishing interiors of apartment buildings, entire subdivisions, and large commercial spaces. The quality of your work and responsiveness of service will build your reputation, helping to land larger contracts able to expand your small business into a major general contracting business.

TRUiC's YouTube Channel

For fun informative videos about starting a business visit the TRUiC YouTube Channel or subscribe to view later.

Take the Next Step

Find a business mentor.

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

What are some insider tips for jump starting a remodeling business?

You will need to network with other contractors and potential customers. Attend the next Home Show and rent a booth as an exhibitor to get your name out and about. Ask to leave your flyer and business contact at local hardware/DIY stores and reach out to local plumbers, electricians, and even general contractors who may need help on their next big job. Word of mouth is often responsible for finding your next customer, so you'll need to work hard to build a positive reputation.

How and when to build a team

As soon as you cannot keep up with demand, start putting out feelers for qualified carpenters and installers.  Do not hesitate to complete background checks and ask for references from verifiable sources.

Useful Links

Industry opportunities.

• Membership in the National Association of the Remodeling Industry
• Remodeling Franchise Opportunity with DreamMaker Bath & Kitchen Remodeling Franchise

Real World Examples

• Wel-Vant construction & Remodeling
• Remodeling Business With Specialty in Remodeling Homes for Seniors and Physically Challenged People
• Luxury Remodels Company

Further Reading

• Tips for Moving Forward With Your Remodeling Business
• Hiring People You Can Trust With Your Business

Have a Question? Leave a Comment!

Renovation Business Plan Template & Guidebook

Are you ready to get your renovation business up and running? With the right plan in place, you can create a thriving business that resonates with customers and provides numerous growth opportunities. The #1 Renovation Business Plan Template & Guidebook is the perfect tool to help you prepare and put together a professional plan for success! This comprehensive guidebook will provide step-by-step instructions, expert tips, and all the necessary resources you need to create your business plan and make sure it is implemented with precision.

Get worry-free services and support to launch your business starting at $0 plus state fees.

• How to Start a Profitable Renovation Business [11 Steps]
• 10+ Best & Profitable Renovation Business Ideas [2023]
• 25 Catchy Renovation Business Names:

How to Write a Renovation Business Plan in 7 Steps:

1. describe the purpose of your renovation business..

The first step to writing your business plan is to describe the purpose of your renovation business. This includes describing why you are starting this type of business, and what problems it will solve for customers. This is a quick way to get your mind thinking about the customers’ problems. It also helps you identify what makes your business different from others in its industry.

It also helps to include a vision statement so that readers can understand what type of company you want to build.

Here is an example of a purpose mission statement for a renovation business:

The purpose of our company is to offer high-quality, customer-oriented renovation services that are tailored to meet the individual needs of our clients. We strive to inspire and create vibrant, personalized spaces that reflect the values and lives of our customers while delivering on time and on budget.

2. Products & Services Offered by Your Renovation Business.

The next step is to outline your products and services for your renovation business. 

When you think about the products and services that you offer, it's helpful to ask yourself the following questions:

• What is my business?
• What are the products and/or services that I offer?
• Why am I offering these particular products and/or services?
• How do I differentiate myself from competitors with similar offerings?
• How will I market my products and services?

You may want to do a comparison of your business plan against those of other competitors in the area, or even with online reviews. This way, you can find out what people like about them and what they don’t like, so that you can either improve upon their offerings or avoid doing so altogether.

3. Build a Creative Marketing Stratgey.

If you don't have a marketing plan for your renovation business, it's time to write one. Your marketing plan should be part of your business plan and be a roadmap to your goals. 

A good marketing plan for your renovation business includes the following elements:

Target market

• Who is your target market?
• What do these customers have in common?
• How many of them are there?
• How can you best reach them with your message or product?

Customer base 

• Who are your current customers? 
• Where did they come from (i.e., referrals)?
• How can their experience with your renovation business help make them repeat customers, consumers, visitors, subscribers, or advocates for other people in their network or industry who might also benefit from using this service, product, or brand?

Product or service description

• How does it work, what features does it have, and what are its benefits?
• Can anyone use this product or service regardless of age or gender?
• Can anyone visually see themselves using this product or service?
• How will they feel when they do so? If so, how long will the feeling last after purchasing (or trying) the product/service for the first time?

Competitive analysis

• Which companies are competing with yours today (and why)? 
• Which ones may enter into competition with yours tomorrow if they find out about it now through word-of-mouth advertising; social media networks; friends' recommendations; etc.)
• What specific advantages does each competitor offer over yours currently?

Marketing channels

• Which marketing channel do you intend to leverage to attract new customers?
• What is your estimated marketing budget needed?
• What is the projected cost to acquire a new customer?
• How many of your customers do you instead will return?

Form an LLC in your state!

4. Write Your Operational Plan.

Next, you'll need to build your operational plan. This section describes the type of business you'll be running, and includes the steps involved in your operations. 

In it, you should list:

• The equipment and facilities needed
• Who will be involved in the business (employees, contractors)
• Financial requirements for each step
• Milestones & KPIs
• Location of your business
• Zoning & permits required for the business

What equipment, supplies, or permits are needed to run a renovation business?

Equipment: Safety gear, power tools, demolition tools, hand saws, screwdrivers, hammers, ladders, drills, sanders, paint mixers, measuring tape. Supplies: Drywall sheets, nails & screws, sealants & caulks, drop cloths and tarps. Permits: Depending on location and scope of work some permits may be required (building permit). Check with local regulations to get information on the specific permit types needed.

5. Management & Organization of Your Renovation Business.

The second part of your renovation business plan is to develop a management and organization section.

This section will cover all of the following:

• How many employees you need in order to run your renovation business. This should include the roles they will play (for example, one person may be responsible for managing administrative duties while another might be in charge of customer service).
• The structure of your management team. The higher-ups like yourself should be able to delegate tasks through lower-level managers who are directly responsible for their given department (inventory and sales, etc.).
• How you’re going to make sure that everyone on board is doing their job well. You’ll want check-ins with employees regularly so they have time to ask questions or voice concerns if needed; this also gives you time to offer support where necessary while staying informed on how things are going within individual departments too!

6. Renovation Business Startup Expenses & Captial Needed.

This section should be broken down by month and year. If you are still in the planning stage of your business, it may be helpful to estimate how much money will be needed each month until you reach profitability.

Typically, expenses for your business can be broken into a few basic categories:

Startup Costs

Startup costs are typically the first expenses you will incur when beginning an enterprise. These include legal fees, accounting expenses, and other costs associated with getting your business off the ground. The amount of money needed to start a renovation business varies based on many different variables, but below are a few different types of startup costs for a renovation business.

Running & Operating Costs

Running costs refer to ongoing expenses related directly with operating your business over time like electricity bills or salaries paid out each month. These types of expenses will vary greatly depending on multiple variables such as location, team size, utility costs, etc.

Marketing & Sales Expenses

You should include any costs associated with marketing and sales, such as advertising and promotions, website design or maintenance. Also, consider any additional expenses that may be incurred if you decide to launch a new product or service line. For example, if your renovation business has an existing website that needs an upgrade in order to sell more products or services, then this should be listed here.

7. Financial Plan & Projections

A financial plan is an important part of any business plan, as it outlines how the business will generate revenue and profit, and how it will use that profit to grow and sustain itself. To devise a financial plan for your renovation business, you will need to consider a number of factors, including your start-up costs, operating costs, projected revenue, and expenses. 

Here are some steps you can follow to devise a financial plan for your renovation business plan:

• Determine your start-up costs: This will include the cost of purchasing or leasing the space where you will operate your business, as well as the cost of buying or leasing any equipment or supplies that you need to start the business.
• Estimate your operating costs: Operating costs will include utilities, such as electricity, gas, and water, as well as labor costs for employees, if any, and the cost of purchasing any materials or supplies that you will need to run your business.
• Project your revenue: To project your revenue, you will need to consider the number of customers you expect to have and the average amount they will spend on each visit. You can use this information to estimate how much money you will make from selling your products or services.
• Estimate your expenses: In addition to your operating costs, you will need to consider other expenses, such as insurance, marketing, and maintenance. You will also need to set aside money for taxes and other fees.
• Create a budget: Once you have estimated your start-up costs, operating costs, revenue, and expenses, you can use this information to create a budget for your business. This will help you to see how much money you will need to start the business, and how much profit you can expect to make.
• Develop a plan for using your profit: Finally, you will need to decide how you will use your profit to grow and sustain your business. This might include investing in new equipment, expanding the business, or saving for a rainy day.

Frequently Asked Questions About Renovation Business Plans:

Why do you need a business plan for a renovation business.

A business plan is important for any business, including a renovation business. It will help you create a roadmap for success, set goals and objectives, secure financing, and organize and manage the various aspects of your business. Creating a comprehensive business plan will also ensure that you have a well-defined strategy for reaching your goals and objectives.

Who should you ask for help with your renovation business plan?

It is a good idea to consult a professional business advisor or accountant for help in creating a renovation business plan. A lawyer may also be able to provide valuable advice and guidance on legal issues and regulations that may apply to your business.

Can you write a renovation business plan yourself?

Yes, it is possible to write a renovation business plan yourself by first researching other renovation businesses and the industry, then gathering information about the renovation business you want to start, such as services you plan to offer, your target market and customer base, marketing and pricing strategies, financial projections, and the steps you will take to reach your goals. Once all of that information is compiled, you can use templates or worksheets to organize your data into a comprehensive business plan.

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I'm Nick, co-founder of newfoundr.com, dedicated to helping aspiring entrepreneurs succeed. As a small business owner with over five years of experience, I have garnered valuable knowledge and insights across a diverse range of industries. My passion for entrepreneurship drives me to share my expertise with aspiring entrepreneurs, empowering them to turn their business dreams into reality.

Through meticulous research and firsthand experience, I uncover the essential steps, software, tools, and costs associated with launching and maintaining a successful business. By demystifying the complexities of entrepreneurship, I provide the guidance and support needed for others to embark on their journey with confidence.

From assessing market viability and formulating business plans to selecting the right technology and navigating the financial landscape, I am dedicated to helping fellow entrepreneurs overcome challenges and unlock their full potential. As a steadfast advocate for small business success, my mission is to pave the way for a new generation of innovative and driven entrepreneurs who are ready to make their mark on the world.

Don't bother with copy and paste.

Get this complete sample business plan as a free text document.

Rental Remodeling Business Plan

Start your own rental remodeling business plan

Victorian Renovations

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.

Victorian Renovations (VR) is a start-up company that is being formed to meet the growing need for unique restored vintage homes in downtown Portland, Oregon.  The company is initially focused on one building, located on Fifth and Pearl, which it is in the process of purchasing.  The house will be renovated by the two owners of the business, Doug Machen and Sarah Renner, both of whom are experienced in house renovation and both of whom have graduated from the MBA program at the University of Portland.  External contractors will also be used for the larger jobs, but most of the work will be completed by Doug and Sarah.

After completion, the house will be rented out, and the income stream will be used to pay the mortgage on the house and to finance the purchase of another property in downtown Portland.  Due to the rising demand of unique homes in this area, it is believed that the property at Fifth and Pearl will be rented out for a high price and will produce substantial cash flow to finance future projects.

1.1 Mission

The mission of VR is to develop rundown houses in the Portland area, to improve the look and financial viability of downtown Portland, and rent those properties out to provide a stream of income for future investments.  The company will develop unique homes targeting the discriminating renter who is willing to pay more for a top quality home.  VR seeks to be viewed as a highly visible company in the property development market.

1.2 Objectives

The following are the main objectives for VR:

• To obtain investor funding to purchase and renovate a four bedroom residence on Pearl and Fifth in the Hawthorne District of Portland, Oregon.
• To complete renovations on the four bedroom victorian residence, to convert it into two 2-bedroom units by October 2001.
• To rent out that residence to provide an income stream enough to pay the mortgage and provide additional income for future projects.
• To purchase another residence for renovation immediately thereafter.

1.3 Keys to Success

The keys to success for this project will be:

• To complete the renovation work within the scheduled time and within the budgeted amount.
• To find rental occupants for the building before renovations are completed or as soon as possible after completion.
• To maintain an average 80% occupancy rate each year.

Company Summary company overview ) is an overview of the most important points about your company—your history, management team, location, mission statement and legal structure.">

Victorian Renovations is a vintage house renovator based in Portland, OR. We purchase dilapidated buildings at low cost and renovate them in vintage Victorian style, they are then rented to young families and couples. We are a privately-owned Oregon corporation. We are relatively small, but have a good understanding of the market, a background in this industry, and a great passion for our work.

2.1 Start-up Summary

The company was started when these two business colleagues realized the number of old dilapidated homes in Portland in need of repair and correspondingly the growth in popularity of older restored homes. 

They have recently located the house on Pearl and Fifth and are in the process of obtaining a loan.  Each partner will contribute investment which will be used to cover the down payment of 20%, the mortgage payments for the first six months while the house is being renovated, and the materials and labor to develop the building.  Much of the work will be done by Doug and Sarah, since they are both owners of older homes and have completed much of the renovation and repair to those homes themselves.

Other costs associated with start-up are the legal costs of incorporating the business and building insurance.

2.2 Company Ownership

Victorian Renovations is a privately-held Oregon corporation.  It is jointly owned by friends and business partners, Sarah Renner and Doug Machen.

Currently the company has just one product, which is the house on Pearl and Fifth.

Market Analysis Summary how to do a market analysis for your business plan.">

Housing exploded into the 21st century on a high note, breaking records for home sales, home ownership rates, and the value of residential construction. Buoyed by the longest economic expansion in history, these residential real estate indicators all set records in 1999.

While Portland is occasionally an enigma when stacked next to national trends–mostly because its urban growth boundary demands greater infill development–a report released this summer is nonetheless likely to raise some eyebrows.

“The State of the Nation’s Housing: 2000,” prepared by Harvard University’s Joint Center for Housing Studies and funded by the Ford Foundation, found that Portland’s housing prices leaped 44% over the past decade–and even rivaled its neighboring peers, Seattle and San Francisco, by substantial percentage points.

This summer, metropolitan Portland’s median sales price for homes rose above the $170,000 mark–and the Lake Oswego/West Linn market soared above the $290,000 mark–according to the Residential Multiple Listing Service’s Market Action.

Crunching numbers adjusted for inflation and factoring out rises in home size and quality, the Harvard University report concluded that Portland had the third-largest leap in housing prices out of 35 U.S. cities. The heftiest increases were tallied by Salt Lake City, with 60%, and Denver, with 49%. One of the largest dips in housing prices affected another West Coast neighbor, Los Angeles, which saw prices slump 18%. Metro Councilor Rod Park attributes much of Portland’s home-pricing increases to the influx of out-of-state workers. Intel Corporation, for instance, recently announced plans to expand facilities in Hillsboro’s high-tech Sunset Corridor. Park said the global chip maker plans to fill many new jobs with out-of-state employees.

The trend with Intel snagging local tax breaks and then bringing in workers from elsewhere ought to raise the eyebrows of local officials, and especially local colleges and universities, he added.

“What we view up here as expensive has a lot to do with people with more earning potential coming in and bidding the prices up,” Park said.

According to an affordability index prepared by the National Association of Home Builders, Portland recently ranked as the 25th least affordable of 192 major U.S. cities.

(Source: The Portland Business Journal , Brian J. Back Business Journal Staff Writer.)

4.1 Market Segmentation

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The largest population group in Portland is 20-44 year olds and VR will be targeting the 25 to 30 year olds within this group.  They have been out of college for a few years and have established careers, but may not be ready to settle down yet with a home purchase.  In addition, many of them are earning high wages with high tech companies.  It is estimated that this group makes up 5% of all people in the 20-44 year old age group in Portland.

Portland Community Age Groups  

(Source: US Census. Median value is the middle value, not an average.)

4.2 Service Business Analysis

Below are the most recent figures we are able to find on the Portland housing market.  If trends in the housing market have remained similar, the vacancy rate of 5.59% looks very promising for VR, since the target is to have the building occupied 80% of the year.

City of Portland 1990 Housing Breakout:

(Source: US Census.)

4.2.1 Competition and Buying Patterns

Competition comes in a number of forms in the portion of the housing market which VR will target.  There are a large number of housing options in the Portland market, however we believe that there are very few houses that have been renovated in a unique Victorian style that are for rent.  For this reason, although this house will be converted into two 2-bedroom apartments, we will be able to charge a premium price for rental.  Where the average price for a 2-bedroom apartment in downtown  Portland is $850, we will charge $900 per unit.  We believe that there is room in the market for this vintage and quality of building in the rental market.

Strategy and Implementation Summary

Our strategy is based on the fact that there is a large portion of people in the Portland area who value comfortable, vintage living with all the modern conveniences.  The homes that we develop will be targeted towards people who are in the market for a rental property and are willing to spend more on their homes to have authentic, classic surroundings.  These people are willing to pay more for this unique property.

5.1 Competitive Edge

The company’s competitive edge is the expertise of the two owners in renovating and restoring older homes.  Both currently own vintage homs and have done much of the renovation themselves, only bringing contractors in to do very large jobs.  In addition, both have strong business backgrounds, one in marketing and one in finance and accounting.

5.2 Marketing Strategy

The marketing for VR will be limited, since the company simply needs to rent out two apartments for one year leases.  A full color leaflet will be developed that will be posted outside the property near the end of the restoring process.  In addition, newspaper advertisements will be placed in local newspapers and on rental websites.

5.3 Sales Strategy

Because these apartments will be high quality, VR will be choosy about who they will accept as tenants.  References and proof of employment or ability to pay the rent will be needed.  Also, one month’s rent will be requested as a deposit on signing of the lease.

5.3.1 Sales Forecast

The following is the sales forecast for VR’s first apartment building on Fifth and Pearl. 

5.4 Milestones

The following Milestones table illustrate the key steps that Victorian Renovations must achieve in order to ensure the success of this venture.

Management Summary management summary will include information about who's on your team and why they're the right people for the job, as well as your future hiring plans.">

Victorian Renovations will be wholly owned and managed by Doug Machen and Sarah Renner.  Both have MBA degrees from the University of Portland and both are experienced home owners and renovators.  Victorian Renovations will be a side business for them, since they currently work time.  They will be working on renovating the building on Fifth and Pearl at night and on weekends.

Doug works for an accounting firm and deals with many real estate transactions for his clients.  This experience makes him perfect to negotiate the sales price and mortgage on the house.

Sarah works as a marketing specialist for an interior design firm that focuses on high end reproductions of antique era household items, such a victorian style sinks, taps, wall paper, tiles, and furniture.  Most of the products are sourced from overseas, so the company works on big margins.  As a result, employees can get good discounts on products from the company.  Sarah will be purchasing most products for the house renovation directly from her work.

6.1 Personnel Plan

The owners will be working on this project alone, though they will be bringing in contractors to do some of the heavier renovation work.  For the first couple of years, neither will be taking a salary.  Instead, they will be plowing profits back into the business, with the aim of buying other properties.

Financial Plan investor-ready personnel plan .">

The following financial information shows the assumptions and outcomes of the purchase, renovation, and rental of the first property on Fifth and Pearl.  No attempt has been made to discuss the implications of purchasing other buildings, since these will happen on a more ad hoc basis.

7.1 Important Assumptions

The following are conservative assumptions that will influence our financial projections.

7.2 Break-even Analysis

The regular Break-even Analysis is not appropriate for this project, but the following text explains the Break-even chart.

Investors will receive 66% of the rental income from the property.  It is estimated that this property will produce $2400 per month of rental. At maximum occupancy, the payout to investors will be fixed monthly cost of $1,600.  The remaining $800 per month will be kept in a savings account to pay for general upkeep of the building and any unexpected repairs.  It is estimated that routine bills and maintenance will be no more than $400 per month.

7.3 Projected Profit and Loss

The following Profit and Loss table illustrates that VR will lose money in the first year, but in the second year, on this single property, the company will make a healthy return of 10% in 2002 and 15% in 2003.

7.4 Projected Cash Flow

The following Balance Sheet shows healthy cash flow that will enable VR to maintain the existing location at Fifth and Pearl and allow Doug and Sarah to purchase a second property in Portland in year two of the operation.

7.5 Projected Balance Sheet

The Balance Sheet shows a healthy company with a positive net worth that will ensure future financial stability and the ability to grow through investment in other properties in the future.

7.6 Business Ratios

The following table contains important ratios for the Single-family housing construction industry, as determined by the Standard Industry Classification (SIC) Index Number 1521.

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House Flipping Business Plan Template

Written by Dave Lavinsky

House Flipping Business Plan

Over the past 20+ years, we have helped over 10,000 entrepreneurs and business owners create business plans to start and grow their house flipping businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a house flipping business plan template step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is a House Flipping Business Plan?

A business plan provides a snapshot of your house flipping business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for Your House Flipping Business

If you’re looking to start a house flipping business, or grow your existing house flipping business, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your house flipping business in order to improve your chances of success. Your house flipping business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for House Flipping Businesses

With regards to funding, the main sources of funding for a house flipping business are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.

Personal savings is the other most common form of funding for a house flipping business. Venture capitalists will usually not fund a house flipping business. They might consider funding a house flipping business with a national presence, but never an individual location. This is because most venture capitalists are looking for millions of dollars in return when they make an investment, and an individual location could never achieve such results.  With that said, personal savings and bank loans are the most common funding paths for house flippers.

Finish Your Business Plan Today!

If you want to start a house flipping business or expand your current one, you need a business plan. Below are links to each section of your house flipping business plan template:

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of house flipping business you are operating and the status. For example, are you a startup, do you have a house flipping business that you would like to grow, or are you operating a chain of house flipping businesses?

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the house flipping industry. Discuss the type of house flipping business you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.  

Company Analysis

In your company analysis, you will detail the type of house flipping business you are operating.

For example, you might operate one of the following types of house flipping businesses:

• Single Family Home : this type of house flipping business focuses on one property that is usually bought at a low price, completely renovated and then sold for a profit.
• Multi-unit Complex: this type of business focuses on a multi-unit building where a house flipper rehabs every unit within the building and then either sells those units individually or sells the complex as a whole.
• Multi-investor Flipping: this type of house flipping is where houses are flipped between multiple investors before it enters the fix and flip stage.

In addition to explaining the type of house flipping business you will operate, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to question such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of customers served, number of positive reviews, number of referrals, etc.
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry analysis, you need to provide an overview of the house flipping industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the house flipping industry educates you. It helps you understand the market in which you are operating. 

Secondly, market research can improve your strategy, particularly if your research identifies market trends.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your house flipping business plan:

• How big is the house flipping industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your house flipping business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your real estate flipping business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: homeowners, prospective homeowners, contractors and real estate agents.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of house flipping business you operate. Clearly, prospective buyers would respond to different marketing promotions than contractors, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. Because most house flipping businesses primarily serve customers living in their same city or town, such demographic information is easy to find on government websites.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.

With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other house flipping businesses. 

Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes real estate agents, online home listing services and investors. You need to mention such competition as well.

With regards to direct competition, you want to describe the other house flipping businesses with which you compete. Most likely, your direct competitors will be house flippers located very close to your location.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of customers do they serve?
• What types of housing units do they buy, rehab and sell?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide better design, construction and renovation services?
• Will you provide services that your competitors don’t offer?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a house flipping business plan, your marketing plan should include the following:

Product : In the product section, you should reiterate the type of house flipping company that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to house flipping, will you provide custom interior design services, financing or any other services?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the services you offer and their prices.

Place : Place refers to the location of your house flipping company. Document your location and mention how the location will impact your success. For example, is your house flipping business located in a busy retail district, shopping plaza, mall, etc. Discuss how your location might be the ideal location for your customers.

Promotions : The final part of your house flipping marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Advertising in local papers and magazines
• Reaching out to local websites 
• Social media marketing
• Local radio advertising

Operations Plan

While the earlier sections of your business plan for flipping houses explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your house flipping business, including scouting properties, attending house auctions, renovating homes and meeting with potential buyers. 

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to sell your 50th home, or when you hope to reach $X in revenue. It could also be when you expect to expand your house flipping business to a new city.  

Management Team

To demonstrate your house flipping business’ ability to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company. 

Ideally you and/or your team members have direct experience in managing house flipping businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing house flips or successfully running small businesses.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement : an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you purchase one new home per month or per quarter? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets : Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your house flipping business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. 

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a house flipping business:

• Location build-out including design fees, construction, etc.
• Cost of equipment and supplies
• Payroll or salaries paid to staff
• Business insurance
• Taxes and permits
• Legal expenses

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office location lease or blueprints of homes you are working on.   Summary Putting together a business plan for your house flipping business is a worthwhile endeavor. If you follow the sample template above, by the time you are done, you will have an expert house flipping business plan; download it to PDF to show banks and investors. You will really understand the house flipping industry, your competition, and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful house flipping business.

House Flipping Business Plan FAQs

What is the easiest way to complete my house flipping business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily complete your House Flipping Business Plan.

Where Can I Download a House Flipping Business Plan PDF?

You can download a house flipping business plan pdf here.

What is the Goal of a Business Plan's Executive Summary?

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of house flipping business you are operating and the status; for example, are you a startup, do you have a house flipping business that you would like to grow, or are you operating a chain of house flipping businesses?

  OR, Let Us Develop Your Plan For You Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.

Click here to see how Growthink’s professional business plan consulting services can create your business plan for you.   Other Helpful Business Plan Articles & Templates

House Flipping Business Plan Template

Written by Dave Lavinsky

House Flipping Business Plan

You’ve come to the right place to create your House Flipping business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their House Flipping companies.

Below is a template to help you create each section of your House Flipping business plan.

Executive Summary

Business overview.

SW Redevelopment is a new house flipping company that specializes in buying properties in Phoenix, Arizona and turning them into exquisite homes suitable for a better living experience. The company will operate in a professional setting, conveniently located near the center of the city. Our company partners with the best contractors and designers in the city to help renovate and design the best homes possible for Phoenix residents.

SW Redevelopment is run by Erin Briggs, an MBA graduate from Arizona State University with more than 20 years of experience working as a real estate broker. Throughout her career, she realized the hardest part of selling a house is getting it in perfect condition to put on the market. That’s why she decided to start a company that takes that pressure off residents so they can sell their homes with ease.

Product Offering

SW Redevelopment will be able to provide the following services:

• Personalize house designs (both interior and exterior)
• Property restoration or renovation
• Project cost evaluation
• Broker opinion of valuation
• Marketing property for lease/sale

SW Redevelopment will primarily offer single-family residential properties.

Customer Focus

SW Redevelopment will primarily serve house buyers and sellers interested in properties within the Phoenix, Arizona area. We expect much of our customer demographic will include middle to upper-class families and first-time homebuyers.

Management Team

SW Redevelopment’s most valuable asset is the expertise and experience of its founder, Erin Briggs. Erin has been a licensed real estate broker for over the past 20 years. She has spent much of her career working in different real estate agencies and has an in-depth knowledge of the Phoenix housing market. She knows that residents struggle to renovate their homes before selling and therefore created this company to take that process off their hands.

SW Redevelopment will employ an experienced assistant to help with various administrative duties around the office. The company will also hire or partner with the best contractors and designers to design the best-looking homes in the Phoenix area.

Success Factors

SW Redevelopment will be able to achieve success by offering the following competitive advantages:

• Design Team: The design teams are made up of creative individuals that are adept at renovation, restoration, building projects. They all highly value the opinions and preferences of their clients, making their designs personal and unique to each one.
• Management: Our management team has years of business and marketing experience that allows us to market and serve clients in a much more sophisticated manner than our competitors.
• Relationships: Having lived in the community for years, Erin Briggs knows all of the local leaders, newspapers, and other influencers. As such, it will be relatively easy for us to build branding and awareness of our company.
• Location: We are located in the heart of the city and are near prime locations where we’re exposed to individuals who have the ability to purchase properties.

Financial Highlights

SW Redevelopment is seeking a total funding of $1,070,000 of debt capital. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, marketing expenses, and working capital.

Specifically, these funds will be used as follows:

• Office space build-out: $50,000
• Office equipment, supplies, and materials: $20,000
• Initial property purchase and renovations: $600,000
• Six months of overhead expenses (payroll, rent, utilities): $250,000
• Marketing costs: $50,000
• Working capital: $100,000

The following graph below outlines the pro forma financial projections for SW Redevelopment.

Company Overview

Who is sw redevelopment, sw redevelopment history.

After 20 years of working in the real estate industry, Erin Briggs began researching what it would take to create a house-flipping company. This included a thorough analysis of the costs, market, demographics, and competition. Erin has compiled enough information to develop her business plan and approach investors.

Once her market analysis was complete, Erin Briggs began surveying the local office spaces available and located an ideal location for the business. Erin Briggs incorporated SW Redevelopment as a Limited Liability Corporation on October 1st, 2022.

Once the lease is finalized on the office space, renovations can be completed to make the office a welcoming environment to meet with clients.

Since incorporation, the company has achieved the following milestones:

• Acquired the perfect location for their headquarters
• Identified properties to start flipping
• Began recruiting key employees
• Utilized connections to find the best designers and contractors

SW Redevelopment Services

Industry analysis.

With the demand for houses increasing substantially over the past few years, there has also been a great demand for house-flipping services. House flipping helps sellers sell their homes with less work and helps buyers find the perfect home of their dreams.

The past few years have seen the largest increase in house flipping since 2006. Over 320,000 single-family homes and condos in the United States were flipped in 2021, up 26% from the previous year. This trend continued into 2022 and is expected to continue in 2023.

The factors contributing to this solid growth include rising home prices, increased sales, and greater construction combined with higher homebuyer demand. Furthermore, consumer spending will drive business expansion, and ensuing investor confidence in real estate will help raise commercial transaction volumes. Now is a great time to start a house-flipping business, as the market is sure to remain strong.

Customer Analysis

Demographic profile of target market.

The precise demographics for Phoenix, Arizona are:

Customer Segmentation

We will primarily target the following customer segments:

• Home sellers
• Home-buyers
• Middle and upper-class families

Competitive Analysis

Direct and indirect competitors.

SW Redevelopment will face competition from other companies with similar business profiles. A description of each competitor company is below.

Property Fortune Flippers

Founded in 1985, Property Fortune Flippers is an integrated network of companies concentrated on real estate opportunities. A leading acquirer of distressed residential real estate across the United States, Property Fortune Flippers has grown into a diversified, vertically integrated company, expanding its business footprint to include residential rehabilitation, non-performing loans, property management, private lending, brokerage, and escrow.

House Flippers

Established in 2004, House Flippers is a real estate investment, education, and coaching company. The company actively invests in real estate and has been involved in more than $1 billion of residential and commercial real estate investments since its inception. This success prompted the company to develop a systemized process that could be taught to prospective investors. The company manages between 25 and 40 ongoing redevelopment single-family and multi-family projects at all times, as well as acquiring apartment communities, retail shopping centers, and office buildings.

Equity Investors

Established in 2007, Equity Investors is a real estate investment firm. It seeks to invest in distressed residential and commercial real estate asset investment, management, multifamily, workouts, and turnaround strategies in the United States and internationally. It focuses on raising, investing, and managing third-party capital, originating and securitizing commercial mortgage loans. Since its inception, Equity Investors has participated in the investment of billions of dollars of equity in real estate assets.

Competitive Advantage

SW Redevelopment enjoys several advantages over its competitors. These advantages include:

Marketing Plan

Brand & value proposition.

The SW Redevelopment brand will focus on the Company’s unique value proposition:

• Client-focused designs, where the company’s design and floor plans are aligned with the customer’s specific needs
• Service built on long-term relationships and personal attention
• Big-firm expertise in a small-firm environment

Promotions Strategy

The promotions strategy for SW Redevelopment is as follows:

Direct Mail

The company will market its newly renovated homes with beautiful marketing pieces that are sent to local residents and real estate agents.

Open House Events

The company will host creative and appealing open house events to attract top real estate brokers and potential home buyers. Events will be entertaining and include food and drink.

Website/SEO

SW Redevelopment will invest heavily in developing a professional website that displays all of the features and benefits of the company. It will also invest heavily in SEO so the brand’s website will appear at the top of search engine results.

Social Media

SW Redevelopment will invest heavily in a social media advertising campaign. The marketing manager will create the company’s social media accounts and invest in ads on all social media platforms. It will use targeted marketing to appeal to the target demographics.

SW Redevelopment will resell its renovated homes at a competitive market price.

Operations Plan

The following will be the operations plan for SW Redevelopment.

Operation Functions:

• Erin Briggs will be the President of the company. She will oversee all staff and manage client relations. She will also oversee all major aspects of the development and renovation projects.
• Erin is assisted by Eva Reed. Eva will serve as the administrative assistant, helping out with all paperwork, phone calls, and other general administrative tasks for the company.
• As the company grows and invests in new properties, Erin will hire several project managers to assist her.
• Erin is also in the process of hiring teams of architects, designers, contractors, and other professionals needed to successfully flip and renovate each property.

Milestones:

The following are a series of steps that lead to our vision of long-term success. SW Redevelopment expects to achieve the following milestones in the following six months:

3/202X            Finalize lease agreement

4/202X            Design and build out SW Redevelopment

5/202X            Hire and train initial staff

6/202X            Kickoff of promotional campaign

7/202X            Launch SW Redevelopment

8/202X            Reach break-even

Financial Plan

Key revenue & costs.

SW Redevelopment’s revenues will come primarily from the earnings from property sales and revamping projects. More than half of the deals each quarter are expected to be design projects, and the rest will be from sales.

As with most services, labor expenses will be key cost drivers. Erin Briggs and future employees will earn a competitive base salary. Furthermore, the costs of transactions are projected to be roughly 45% of regular revenue and cover the advertising of listings, travel and supply costs for clients, and other direct costs for each deal.

Ongoing marketing expenditures are also notable cost drivers for SW Redevelopment, especially in the first few years as the company works to establish itself in the market.

Funding Requirements and Use of Funds

Key assumptions.

The following table reflects the key revenue and cost assumptions made in the financial model:

Financial Projections

Income statement, balance sheet, cash flow statement, house flipping business plan faqs, what is a house flipping business plan.

A house flipping business plan is a plan to start and/or grow your house flipping business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your House Flipping business plan using our House Flipping Business Plan Template here .

What are the Main Types of House Flipping Businesses?

There are a number of different kinds of house flipping businesses , some examples include: Single Family Home, Multi-unit Complex, and Multi-investor Flipping.

How Do You Get Funding for Your House Flipping Business Plan?

House Flipping businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a House Flipping Business?

Starting a house flipping business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A House Flipping Business Plan - The first step in starting a business is to create a detailed house flipping business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast. 

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your house flipping business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your house flipping business is in compliance with local laws.

3. Register Your House Flipping Business - Once you have chosen a legal structure, the next step is to register your house flipping business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.

4. Identify Financing Options - It’s likely that you’ll need some capital to start your house flipping business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.

7. Acquire Necessary House Flipping Equipment & Supplies - In order to start your house flipping business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your house flipping business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful house flipping business:

• How to Start a House Flipping Business

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