The home improvement and remodeling industry is booming, and as people seek affordable houses, buying a home “as-is” is a popular option. Many of these economically priced homes just need a little TLC to bring them back to their former glory.

Although interest in modest DIY projects continues to rise, most homeowners lack the necessary skills to take on major repairs, such as roof replacement or upgrading an HVAC system. This means they will be reaching out to professionals for assistance with more extensive remodels and upgrades.

How to start a home renovation business

Whether a homeowner is looking to remodel a single room or an entire house, there are many opportunities today for home renovation professionals to provide home improvement services. In fact, The Joint Center for Housing at Harvard University published a report showing that while the U.S. economy shrank by 3.5% in 2020, spending on home improvements and repairs grew more than 3%, becoming a nearly $420 billion industry.

If you’re interested in running your own home renovation business, follow these 14 steps to get started.

1. Know your market

Knowledge is power, and your first and most important step when starting a home renovation business is to know your market. Research competitors to get an idea of all the products and services available in your local market; call on businesses and visit showrooms.

Also, attend design and remodeling shows. Trade shows are convenient one-stop shops filled with many vendors under one roof, giving you the perfect opportunity to network, make connections, view current home decor trends, and find suppliers.

2. Formulate your business plan

No matter what the plan is for your new business—being a self-employed jack-of-all-trades, forming a partnership with your father-in-law, or creating a corporation with multiple business partners—you need to start with a solid business plan.

Different business models to choose from are:

• Sole proprietorship
• General partnership
• Limited liability corporation
• C corporation or S corporation

Don’t skip this step! Consult with a lawyer or reach out to organizations, such as the Small Business Administration (SBA), which can help you plan, launch, and grow your business.

3. Take care of paperwork

Focus on all the paperwork necessary to start your business—from choosing and registering your business name, opening a business banking account, to obtaining your professional trade license. Check to see if you need to file extra paperwork at the state or city level, as many local governments require you to collect and file sales tax returns for certain goods and services.

You will also need to decide if you’re going to hire employees, work with independent contractors, or do a combination of the two. You may also need to get an Employer Identification Number (EIN), as well as obtain worker’s compensation insurance, general liability insurance, and commercial property insurance.

4. Create promotional materials

Run a cost analysis to help create a marketing plan of ways to promote your business. These may include social media, print/TV advertising, digital strategies, OTT (over the top), events, expos, and more.

You will also need certain marketing materials, such as a company logo, website, and business cards. If you have basic design skills, you can use Canva or Photoshop to create social media posts, brochures, banner ads, infographics, and more; or you can contract with freelancers on a per-project basis.

5. Determine the scope of work

Decide if you want to offer your services as a general home renovation expert, tailoring your projects to a client’s specific needs, or focus on a particular niche, such as outdoor kitchens, home gyms, flooring, or luxury kitchen remodels.

Outdoor improvements, including driveways, fences, pergolas, and in-ground pools, are always a popular choice with homeowners. Another option is to specialize in providing upgrade services, such as replacing roofing, siding, windows, and doors.

Maybe you’ve worked as a journeyman plumber for a plumbing and air conditioning company, and now you’re interested in starting your own home renovation business. You can begin by offering bathroom renovation services on a part-time basis. This could evolve into kitchen or laundry room remodels, outdoor spa construction, or any project with a water feature, as you work your way up to larger and more complex renovations.

6. Start small

Are you willing to work long hours as you establish a new business? It could take you upwards of 10 to 12 hours a day to get your business off the ground. It’s always better to start small and work on building your skills as you work your way up to larger, more complex renovation projects.

If you have no prior experience in the home renovation space, you can either start out by working for someone else to learn the ins and outs of the business, or remodel a room or two in your own house. Show off your new space to friends and family, then volunteer to redo a neighbors home office at a low cost in return for positive reviews and referrals.

Before you know it, people will be reaching out to you and asking for your home improvement expertise and guidance.

7. Reach out for help if needed

Can you do some, all, or most of the work yourself? Basic skills, such as painting, hanging wallpaper, and laying flooring, can usually be learned as you go; more advanced skills, such as vaulting the ceiling in a living room, typically require expert-level knowledge.

8. Know how to write an estimate

Know your numbers and how to calculate a home renovation budget to estimate how much everything will cost, including architectural drawings, building permits, supplies, materials, etc. If a client isn’t 100% certain what they want to spend on their home renovation, find out exactly what they want and present them with two or three options.

You’ll also want to prepare for unexpected emergencies and set aside a certain percentage of your client’s budget as a contingency fund to cover unplanned surprises. Once you start tearing down walls, ripping up floors, and removing dropped ceilings, you never know what you’ll find. Leaky roofs, busted water pipes, and an electrical system not up to code can all take a large chunk out of a renovation budget.

9. Plan the construction process

If you’re removing walls to give your client an open concept home, you should consult with a structural engineer who will take a detailed look at the existing structure. The engineer will point out if the walls you are removing are load-bearing or not, and let you know if you need to install temporary support walls or add an engineered wood or steel structural support beam.

Before you can even start the permitting process, you’ll need a finalized set of building plans to bring to your local building department. You can work with a home builder, architect, draftsman, building designer, or structural engineer to help draft the new construction plans.

The general rule of thumb is if you’re changing a home’s footprint, such as building a kitchen addition or adding a covered porch, you’ll need a new set of plans to pull a permit. Check with the local building department to find out what’s needed.

10. Obtain all necessary permits

Get all permits and licenses in place before starting any job, or hire someone to be in charge of this process. Every city, town, and municipality has its own set of building code rules and regulations you need to follow.

Start the permitting process early—as soon as you have drawn up the final construction plans. Depending on the size and complexity of the project, permits can take weeks, or even months, to get approval.

Each stage of the remodeling process needs to be approved by an inspector, so don’t rush to start a job before you have the permits. You might think you’re saving time by immediately throwing up drywall after roughing in a new guest bathroom, but a building inspector could shut down your project or have you tear down walls to inspect the new plumbing.

11. Find reliable suppliers

Do your homework to find reliable and trustworthy suppliers and vendors. Ask for recommendations from friends and family, read online reviews, and view customer testimonials.

You can go to any big box home improvement store and find most items on your list. But, what if you are trying to source unusual or specialty items, such as hand-painted Moroccan tiles or the latest smart home innovations? In that case, you may have to go directly to a supplier for the best selection.

Basic home renovation suppliers to research include:

• Tile and flooring
• Paint and wallpaper
• Doors and windows
• Small appliances
• Electrical and plumbing
• Heating and cooling
• Lighting and ceiling fans
• Roofing and gutters
• Landscaping and gardening materials
• Home decor and furniture
• Kitchen and bathroom cabinets
• Hand tools and power tools
• Wood, drywall, screws, nails, and other basic building materials

When you’re gathering building supplies, it’s always a good idea to get more materials than you think you’ll need to finish the job. For instance, dye lots are often hard to match, or you could discover your item is on backorder if you underestimated the amount of tile you need to complete a guest bathroom remodel.

And, don’t forget to ask for a trade discount. Most suppliers offer 10 to 20% off retail prices. Usually, all you have to do is show your federal tax ID or professional license to register your business and get the contractor’s rate.

12. Focus on the end goal

Stay focused on the end goal when you do a remodeling project. It’s easy to get distracted, so make sure you’re always looking at the big picture and not getting hung up on minor details. Organization is also key to staying on track and preventing small details from slipping through the cracks.

Many home renovation experts keep a detailed punch list of things they need to do to finish a project. Suggested items to include on the punch list:

• Project name
• Task
• Description
• Notes
• Location
• Subcontractor
• Status
• Date completed

Punch lists are a great project management tool—simply check off items as they are completed and add new items as necessary. While a pad of paper is all you need, you can create an Excel or Google Docs spreadsheet template and print it out for each project.

Also, it’s a good habit to carry the punch list with you when doing the final walk-through of a property so nothing gets missed or forgotten.

13. Post on social media

As you grow your business, you’ll want to create a book of finished projects to help bring in new clients. Take plenty of pictures showing stages of the home renovation process, and post the photos on your website and social media sites like Facebook, Pinterest, and Instagram. Short videos are another excellent marketing tool to display your work—share them on social media, embed in blog posts, and upload to YouTube.

Consistency is key when posting to social media. Using an editorial calendar to keep track of your marketing efforts on your various platforms helps keep everything organized and lets you know if there are any gaps in your coverage. Most social media sites allow you to schedule posts in advance, or you can use social media management tools, such as Hootsuite or Sprout Social.

14. Ask for customer reviews

Always ask your current and past clients to leave reviews for your business, as referrals and endorsements from happy customers are a great way to attract new clients. You can use these word-of-mouth testimonials on your website, in the form of quotes or short videos, to help generate trust and build social proof.

Top sites for online customer reviews:

• Your website
• Google
• Facebook
• Yelp

The best ways to collect reviews are to include a review form on your website, ask customers for feedback via email, create surveys and polls on your social media sites, or send an SMS text message with a link to fill out an online review.