With the real estate marketing in a slump, the general assumption may be that home improvement professionals are not very busy. But one surprising fact is that more and more homeowners, who may have otherwise moved, are staying in their home longer and choosing to remodel to get the house of their dreams.
Some homeowners do the work themselves, but even competent DIYers sometimes call for help. Others find that hiring a professional to do the whole job is still far more cost-effective than moving.
This scenario opens the door for home improvement businesses. But even when home improvement services are in demand, you need more than a dream and truck to get started. Before you print up business cards to announce your venture to the world, you must do some research and ask questions so you can develop a business plan:
What services will you offer?
If you are thinking of starting a home improvement business, you must zero in on what you want to offer. You can broaden your scope in the future, but starting with limited offerings is a smart way to stretch your capital and effectively use your time.
Does your business meet a need in your area?
In a tight economy, potential customers tend to spend modestly so you must offer something they are likely to buy. If you specialize in installing granite or high-end flooring, there might not be much demand for your services in moderate-income areas.
How much competition is there for your service?
If there are dozens of painters or electricians or carpet cleaners in town, entering the market will be tough unless you have some competitive advantage over other more established businesses.
What type of licensing does your business require?
Many states and municipalities require you to obtain a home improvement handyman or contractor license to do any work, as well as a license to sell your services. Some services such as plumbing and electrical may require additional certifications and licenses. Homeowners want to hire competent professionals who are licensed.
How can you get leads for your business?
Word-of-mouth referrals are ideal, but you may not get enough of these until your business grows. You must figure out how to combine online, print, networking, and other resources to generate leads .
How much will you charge for your services?
You need to learn the going rates so you don't cheat yourself or price yourself out of business before you even get started. In recessionary times or when you are just getting started, you may have to compromise on prices. On the other hand, if you don't make enough to break even or profit on jobs, you end up running a charity, not a business.
How much capital do you need to get started?
Many businesses fail because they are underfunded. You need either personal resources or a loan to underwrite business start-up costs, insurance, tools and equipment, labor, marketing, and operating costs for the first year.
Should you incorporate your business?
Incorporating your business as an LLC (Limited Liability Corporation) can reduce your personal liability. Some states make this easy by having a business center on their website, such as Sunbiz in Florida. Alternatively, you can have your attorney file for you or save money by using an online company such as LegalZoom.
You need more than a dream and a truck to go into the home improvement business, but careful planning can make it happen!
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