The competitiveness in creativity has increased over the past few years. Nowadays, there is a trend of showing creativity at home. Many people renovate their home every 4-5 years to make it creative and the latest trend. Home renovation has a broader scope, and starting its business will be very profitable.
Do you also want to start the home renovation/ repair business and need help in the execution? If yes, then you come to the right place because today we will discuss a detailed business plan on the home renovation business, which will be helpful for every person who is planning to start it.
Home renovation Business Plan
So a lot to know, a lot to discuss, and without wasting any time, let us now begin.
Things to keep in mind
There are some basic things which you should keep in mind before starting this business which is as under:
#1 Verify the owner
The first step is to verify the ownership of a home or property. Verifying the owner is very important because sometimes the actual owner appoints a false owner who made a home renovation contractor in his place with the company and, after completion, refuses to pay the amount by simply saying that the contractor does not have the authority to make the contract because he is not the valid owner of the property.
Afterward, if you file a case, the court will decide against you because,e as per the contract law, you must verify the owner before forming a contract. So be sure to verify the owner before taking the work in your hand.
#2 Form an adequately written contract
After verifying the owner, form a valid written contract by adding all the agreed terms and conditions. To avoid future losses, you must add all the essential clauses like the inflation clause ( I will explain in the next point). A written contract is necessary because it gives both the contractor and contractee power to file a suit against the other party in case of any dispute.
As you have already verified the owner, now if in case the owner refuses to pay the total amount or partial amount, then you can file a suit against him, and this time court will declare the result in your favor if all the terms and conditions related to the contract are clearly specified in your favor.
#3 Add inflation clause in the contract
An inflation clause simply means a change in the price of a contract as per inflation. In simple words, if the labor wages is $20 per hour at the time of contract but during execution, it increased to $25 per hour, then to avoid this loss of $5 hour, you can add the inflation clause( with the consent of contractee) which adjusts the contract price as per the increase and decrease in wages.
In the above example, labor wages are just taken as an example. The inflation clause can also be applied to raw materials.
The main motive of this clause is to remove the uncertainty of price. So if you add the inflation clause in the contract and the cost of direct material falls, you also need to adjust and decrease the contract price.
#4 Take some amount in advance
The next step is taking some payment in advance. Advance payment is significant because it gives you work confidence that the contractor will pay the whole amount at work completion. You also need some money for arranging raw materials and paying the wages of the workers.
You should take 15-20% of the contract price in advance, another 30% after half completion, another 20% after ¾ completion, and the left amount after full realization of the work.
#5 Fulfill all legal formalities
There are a lot of formalities that you need to fulfill for starting the home renovation business. If you form a home renovation company, you need to register it in company law by paying the prescribed fees and have to wait until the date of issuing a certificate of incorporation. After incorporations, there are other formalities of auditing, indirect taxes, etc., which your company has to fulfill regularly.
#6 Make a budget in advance
Always prepare a budget in advance to estimate all the expenses and income. Your budget should be calculative, and estimates must be at least 90% accurate because inaccuracy is the main reason for a budget failure.
You can take the help of professionals like accountants or lawyers to correctly estimate all your business’s legal and working expenses.
#7 Do the best work
Now, at last, you should focus on giving the best work to the customer as per their choice because performing the best result is one and the only factor in business growth in the long term. Doing the best work creates brand value in the market, and an affluent customer will definitely prefer a good brand for his home renovation, and we know affluent customers means rich profits.
How to advertise a home repair business?
Use social media platforms for advertising your business because nowadays, people search almost everything on the internet. Show ads on specific keywords like “Home renovation services near me,” “Best company for home renovation,” etc., because there is a lot of chance that people will come to your website and give the renovation contract to you if they like the offer.
How to reduce home renovation costs?
Hiring skilled labour and making a proper budget is the best way to reduce the cost of the home renovation business. I know that hiring skilled labour might be a bit expensive, but it is better for you and your organization in the long term because skilled labour will do less wastage of material than unskilled labour. Apart from that, he will perform work effectively and efficiently compared to unskilled labour, which will reduce the project’s net cost.
I am emphasizing skilled labour more because I recently made a contract to renovate my home with a contractor. The contractor appointed unskilled labour for it, who did a lot of waste of material and time, which eventually increased my contract cost. That is why I always prefer skilled man force over unskilled.
How to decide to price?
Pricing is one of the most critical factors which you should consider before starting a business. Pricing depends on factors like quality of work, cost of labour, competitor’s brand name, and competitor’s pricing. Since you are new, your pricing should be less than that of the competitor so that middle class and fixed budgeted people approach you for work. Once they come you, provide them with the best position to make your market value which in the long term helps you to compete and survive in the market.
I think we have discussed all the essential details about starting the home renovation business. Now, if you have any questions, then feel free to ask me in the comment section. Till then, GoodBye, and as always, God Bless You All.
Frequently Asked Questions
What is the first step of starting a home renovation business?
Preparing a good business plan is the first step of starting a home renovation business.
Which is the most important thing to do before starting home renovation?
You must make a written contract with the customer before starting a home renovation.
How much does it cost to start a home renovation business?
You need about $7,500 to start a home renovation business.