How To Start a Remodeling Business: Your Step-by-Step Guide

Home improvement and remodeling is a lucrative business. How lucrative? Between 2015 and 2017, American homeowners invested nearly $450 billion into their abodes. The study also revealed that 85% of homeowners can agree that their homes are their biggest investments. While 80% of homeowners say professional remodelers charge too much, 68% say the cost is well worth it to avoid the headache of making a repair or remodel a room on their own. As for the approximately 30% of individuals who tried to tackle a home improvement project on their own, they admit there are some projects best left to the professionals.


That said, if you're a handy person, and if you want to be your own boss, you may want to look into starting a remodeling business. This guide will teach you how to start a remodeling company as well as inform you of what challenges you should expect in the early months of business ownership.


How to Start a Remodeling Business: What You Need to Know


This guide assumes you've considered everything from what it will be like to be on your own to your financial outlook before you start generating revenue. If you haven't, you should take some time to really think about what business ownership entails and determine if you're cut out for entrepreneurship. If you decide that you are, it's time to learn how to start a remodeling business.



Decide on Your Specialty Before Starting a Remodeling Business


All general contractors have one or two services in which they specialize, and then they subcontract out the rest of the work. Your business plan should address which services you plan to fulfill yourself as well as which services you plan to contract out to subs. For instance, you may want to get into kitchen and bathroom remodeling but you are really only be able to do the tilework yourself. You would need to subcontract out the electrical, plumbing, cabinetry and finishing work to others.


How much work you need to sub out will dictate how large or small of projects you will be able to take on. Though larger projects generally mean more money, if you have to contract out a ton of work, you may lose more than you stand to gain.


Get Your Finances in Order


Business ownership is extremely rewarding, but it's not easy. In your first few months or even years, you may struggle financially and find that you have to pay for a lot of stuff out of your own pocket. Because of this, many people don't make it as entrepreneurs, oftentimes because entrepreneurship is not financially feasible.  


To ensure your business doesn’t flounder because of cash flow (or lack thereof) alone, thoroughly research how to start a remodeling business and get your finances in order before making any big decisions. Have a healthy cash reserve for contingencies along with available capital for standard expenses that come with starting a remodeling business, such as an LLC filing fee, payroll, advertising, home improvement leads and equipment.


You can easily expect to pay $1,000 or more just to get your business up and running. However, you need to have substantial savings to pay for your own everyday living expenses, such as shelter, food and transportation.


Form a Legal Business Entity to Start a Remodeling Business


The majority of remodeling businesses decide to use one of the four following entity types. Each one has its own unique pros and cons that should be researched and discussed with your lawyer and CPA before deciding what is best for you.


  • Sole Proprietor
  • LLC
  • General Partnership
  • C Corporation


Though you may be tempted to form a sole proprietorship, as it's the easiest to form and comes with the least amount of taxes, you should reconsider your decision. An LLC, or Limited Liability Company, is the best type of entity for solo entrepreneurs and partners alike.  An LLC can protect you from any lawsuits, debt, back taxes or judgments that belong to the company.


Once you learn how to start a remodeling business, you may wish to grow and go public, in which case you may want to look into a C corporation. Though the most complicated of business structures, it offers considerable protection for companies that generate a good deal of wealth.



Obtain the Necessary Licenses and Insurances


When you Google how to start a remodeling business, you may notice that your state requires you to obtain a contractor's license. If you plan to do strictly finishing and cosmetic work, you may be able to skip this step. However, if you anticipate making any structural changes to homes or building, installing roofing or siding, or performing electrical or plumbing work, you will definitely need proper certification.


You should also invest in general liability insurance. Though some states don't require it for all contractors, it's good to have in case something goes wrong and the home or business owner decides to blame you. For instance, if you remodel a bathroom, and two weeks later the pipes burst, you could be financially liable for property damage. If one of your employees steals from a homeowner, general liability insurance could save you from having to pay for a priceless heirloom out of your own pocket.


How to Start a Remodeling Company: Find Customers


Finally, once you learn how to start a remodeling business and have everything lined up, it's time to start marketing. In addition to advertising online, you should also send out mailers, post flyers around town, attend trade shows and encourage friends and family to spread the word about your services. It may also be worth your while to pay for general contractor leads through a company such as, as this is one of the quickest ways to get your business off the ground.


Our friends at Bankrate wrote this article where their experts highlight financially savvy steps that homeowners can take during the remodeling process to ensure it doesn’t become a pricey endeavor. They include strategic ways to save money and list various improvements that may seem small but can add long term value.


There you have it—the short and sweet version of how to start a remodeling business. Once you decide to go solo, invest the time and resources you have into making your business the success you know it can be. For help finding customers so you can hit the ground running, partner with

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