business plan for renovation company

Remodeling Business Plan Template

Written by Dave Lavinsky

Remodeling Business Plan

Over the past 20+ years, we have helped over 1,000 entrepreneurs and business owners create business plans to start and grow their remodeling 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 business plan template step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is a Remodeling Business Plan?

A business plan provides a snapshot of your remodeling 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 a Remodeling Company

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

Sources of Funding for Remodeling Businesses

With regards to funding, the main sources of funding for a remodeling 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 and bank loans are the most common funding paths for remodeling businesses.

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How to write a business plan for a remodeling company.

If you want to start a remodeling business or expand your current one, you need a business plan. Below we describe what should be included in each section of a business plan for your remodeling company:

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 remodeling business you are operating and the status. For example, are you a startup, do you want to grow your business, or are you operating remodeling businesses in multiple markets?

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the remodeling industry. Discuss the type of remodeling business you are operating. Detail your direct competitors. Give an overview of your target market. 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 remodeling company you are operating.

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

• Residential Remodeling : this type of remodeling business focuses on renovations strictly for home-based projects, such as kitchens and bathrooms.
• Design-Build and Whole House Remodeling: this type of remodeling are residential general contractors that are responsible for the architecture, design, and construction management of major home remodeling projects.
• Restoration: Restoration contractors specialize in working with insurance companies, and focus specifically on fire, wind, or water damage to restore the home to its original condition before the occurrence.

In addition to explaining the type of remodeling company 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 projects completed, number of positive reviews, 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 Remodeling industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the remodeling 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 remodeling company business plan:

• How big is the remodeling 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 remodeling company? 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 must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: homeowners looking to add on or update their home, those who have suffered a recent weather damage occurrence, and new homeowners who have purchased an older home that is in need of updates.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of remodeling company you operate. Clearly, homeowners would respond to different marketing promotions than help those affected by weather-related incidents, for example.

Try to break out your target market 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.

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

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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 remodeling businesses. 

Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes new home builders and large construction general contractors. You need to mention such competition as well.

With regards to direct competition, you want to describe the other remodeling businesses with which you compete. Most likely, your direct competitors will be remodeling businesses 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 type of remodeling businesses are they?
• 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 shorter project times?
• 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 remodeling company, your marketing plan should include the following:

Product : In the product section, you should reiterate the type of remodeling company that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to temodeling, will you provide call design and architecture, project management, and 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 remodeling company. Document your location and mention how the location will impact your success. For example, is your remodeling business located in a high traffic area, a business district, a standalone office, etc. Discuss how your location might be the ideal location for your customers.

Promotions : The final part of your Remodeling 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 websites 
• Social media marketing
• Local radio advertising

Operations Plan

While the earlier sections of your business plan 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 remodeling business, including offering free remodeling quotes, sourcing materials and labor, organizing subcontractors, client communication, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to land your Xth client, or when you hope to reach $X in revenue. It could also be when you expect to expand your remodeling business to a new city.  

Management Team

To demonstrate your remodeling 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 remodelings. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your management 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 a remodeling businesses or successfully running a construction company.  

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 take on one new client at a time or multiple new clients ? 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 Remodeling 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 your business:

• Cost of contracting licenses and permitting.
• Cost of equipment and supplies.
• Payroll or salaries paid to staff and subcontractors .
• 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 past remodeling projects or project quotes of client projects you are working on.  

Putting together a business plan for your remodeling business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the remodeling 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 remodeling business.  

Remodeling Business Plan FAQs

What is the easiest way to complete my remodeling business plan.

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

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 remodeling business you are operating and the status; for example, are you a startup, do you have a remodeling business that you would like to grow, or are you operating a chain of remodeling businesses?

Don’t you wish there was a faster, easier way to finish your Remodeling business plan?

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

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!

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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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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 Home Remodeling Business: A Comprehensive Guide

In 2022, the home remodeling industry saw a staggering growth of 5.5%, with homeowners spending more time indoors and looking for ways to enhance their living spaces. If you’ve ever considered diving into this lucrative market, you might be wondering How To Start a Home Remodeling Business . This comprehensive guide is here to illuminate the path for budding entrepreneurs like you. Dive in to discover the essentials of setting up, running, and growing a successful home remodeling venture. Let’s embark on this transformative journey together!

Essential Skills and Qualifications

Necessary Skills for Starting a Remodeling Business

Beyond the hammer and nails, a successful remodeling business owner needs a keen eye for design, strong project management skills, and a dash of salesmanship.

Training and Certifications to Consider

While a degree in construction might give you a head start, various certifications, like the Certified Remodeler (CR) designation, can boost your credibility.

Importance of Hands-on Experience

There’s no substitute for getting your hands dirty. Before diving in, consider working on a few projects or shadowing a seasoned pro. It’s the best way to learn the ropes and avoid rookie mistakes.

Crafting a Business Plan

Importance of a Well-Defined Business Plan

A business without a plan is like a house without a foundation. Wobbly and risky! Crafting a solid business plan is the first step to ensure your remodeling business stands tall and sturdy.

Key Components to Include

From financial projections to marketing strategies, your business plan should cover all bases. And don’t forget to include an analysis of your competition. Knowledge is power, after all.

Setting Clear Objectives and Goals

Where do you see your business in 5 years? Whether it’s opening a showroom or expanding to multiple cities, setting clear objectives will keep you on track.

For more insights on designing the perfect spaces, check out How to design floor plans . And if you’re looking for a deeper dive into starting a remodeling business, this guide on How to start a remodeling business is a goldmine.

Legal Considerations and Licensing

Choosing a business structure.

So, you’ve decided to take the plunge and How To Start a Home Remodeling Business . First things first, let’s talk structure. Whether you’re leaning towards an LLC for its liability protection or considering the simplicity of a sole proprietorship, your choice will have tax implications and determine your level of personal liability.

Obtaining Necessary Licenses and Permits

No one likes red tape, but it’s a necessary evil. Depending on your state, you’ll need specific licenses to operate legally. And remember, working without the required permits can lead to hefty fines. So, always better to be safe than sorry!

Importance of Insurance for Remodeling Business

Accidents happen! Whether it’s a misplaced hammer or an unexpected plumbing issue, having the right insurance can save you from a financial nightmare. Consider general liability and workers’ compensation as your safety nets.

Building a Brand and Online Presence

Crafting a memorable business name and logo.

Your brand is more than just a name; it’s the first impression you make. So, choose a name that resonates with your target audience and a logo that’s as unique as your services.

Setting Up a Professional Website

In today’s digital age, if you’re not online, you’re invisible. A sleek, user-friendly website can be your most potent marketing tool. And hey, while you’re at it, check out these Best free home design apps to give your site that extra oomph!

Utilizing Social Media for Marketing and Engagement

From Pinterest boards of dream homes to Instagram’s before-and-after shots, social media is where your audience is. Engage, inspire, and watch your client list grow!

Financing and Budgeting

Initial investment and startup costs.

Starting a business isn’t cheap. From tools to advertising, the costs add up. On average, initial investments can range from $10,000 to $50,000. But remember, every penny you put in is a step towards building your empire.

Securing Loans or Grants

Unless you’ve got a money tree in your backyard, you might need some financial help. Research loans tailored for small businesses or grants that support local entrepreneurs.

Importance of Budgeting and Financial Planning

A successful business is as much about smart spending as it is about earning. Budgeting isn’t just about cutting costs; it’s about maximizing profits. For more insights, this guide on How to start a home renovation business is a treasure trove of information.

How To Start Home Remodeling Business: Marketing Strategies

Traditional vs digital marketing.

In the age of TikTok and Instagram, it’s easy to dismiss traditional marketing methods like billboards and radio ads. But guess what? They still pack a punch! However, combining them with digital marketing strategies can give your business the edge it needs. Think of it as a PB&J sandwich – classic yet timeless.

Importance of Word-of-Mouth Referrals

Ever heard the saying, “A happy customer tells a friend; an unhappy customer tells the world”? Word-of-mouth referrals are the gold standard in marketing. Happy clients become your brand ambassadors, and their recommendations are worth their weight in gold.

Collaborating with Real Estate Agents and Contractors

Real estate agents and contractors can be your ticket to a steady stream of clients. Build strong relationships with them, and watch your client list grow faster than you can say “remodel”!

Building a Portfolio and Client Testimonials

Importance of showcasing your best work.

Your portfolio is your business card. It’s what potential clients will judge you on. So, make it count! Showcase a variety of projects to demonstrate your versatility and expertise.

Collecting and Displaying Client Testimonials

Nothing screams trust like genuine client testimonials. Encourage your satisfied clients to leave reviews. And for the love of all things DIY, please don’t be tempted to fake them!

Leveraging Before-and-After Photos

A picture is worth a thousand words, but a before-and-after photo? That’s priceless. It not only showcases your skills but also gives potential clients a tangible sense of what you can achieve. For more insights, check out Surviving a major home renovation .

Challenges and Solutions in the Remodeling Business

Common challenges faced by new businesses.

From managing client expectations to navigating the maze of permits, starting a remodeling business isn’t a walk in the park. But hey, if it were easy, everyone would do it!

Strategies to Overcome These Challenges

Knowledge is power. Stay updated with industry trends, attend workshops, and never stop learning. And when in doubt, seek advice. There’s no shame in asking for help.

Importance of Continuous Learning and Adaptation

The remodeling industry is ever-evolving. What’s trendy today might be passé tomorrow. Continuous learning and adaptation are not just buzzwords; they’re your ticket to long-term success. For a deeper dive into the world of home renovation, this guide on How to start a home renovation business is a must-read.

Frequently Asked Questions

What do i need to start a home remodeling business.

Starting a home remodeling business requires a combination of skills, certifications, a well-defined business plan, and the necessary licenses and permits.

How much capital is needed to begin?

Typically, the initial investment can range from $10,000 to $50,000, depending on the scale and location of your business.

Is experience in construction necessary?

While having construction experience is beneficial, it’s not mandatory. Many successful entrepreneurs start with a passion for design and then acquire the necessary skills.

How do I market my home remodeling business?

Marketing strategies can include digital advertising, word-of-mouth referrals, collaborations with real estate agents, and showcasing a strong portfolio.

What challenges can I expect in this business?

Common challenges include managing client expectations, staying updated with industry trends, and handling unexpected project complications.

How long before I start seeing profits?

Most businesses take about 1-2 years to break even and start seeing consistent profits, depending on their strategies and market conditions.

How can I ensure the growth and sustainability of my business?

Continuous learning, adapting to market needs, and focusing on customer satisfaction are key to ensuring the growth and sustainability of your home remodeling business.

Embarking on the journey of How To Start a Home Remodeling Business can be both challenging and rewarding. With the right strategies, dedication, and this comprehensive guide at your side, you’re well-equipped to carve a niche for yourself in this booming industry. Ready to transform homes and lives? Dive deeper into our guide and take the first step toward your entrepreneurial dream today!

Thank you for reading!

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.

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Here is a free business plan sample for a home renovation company.

Embarking on a home renovation business can be an exciting venture, but knowing where to start can be overwhelming.

In the content that follows, we will present you with a comprehensive sample business plan tailored for a home renovation company.

As any seasoned entrepreneur will tell you, a detailed business plan is crucial for laying the foundation of a successful business. It serves as a roadmap, guiding you through setting clear objectives, strategies, and financial projections.

To jumpstart your planning process with ease and precision, you're invited to utilize our home renovation business plan template. Additionally, our team is available to provide a free review and refinement of your plan to ensure it's polished and professional.

How to draft a great business plan for your home renovation company?

A good business plan for a home renovation business must be tailored to the unique aspects of the renovation industry.

Initially, it's crucial to provide a comprehensive overview of the home renovation market. This should include current statistics and an analysis of emerging trends, similar to what we've outlined in our home renovation business plan template .

Your business plan should articulate your vision clearly. Define your target market (homeowners, real estate investors, property managers, etc.), and establish your business's unique selling proposition (eco-friendly renovations, luxury upgrades, budget-friendly remodels, etc.).

Market analysis is a key component. You need to understand the local demand for renovation services, identify your competitors, and know the preferences and behaviors of potential clients.

For a home renovation business, it's important to detail the services you offer. Whether it's kitchen and bathroom remodels, whole-house renovations, or specialized services like historic restorations, explain how these services cater to the needs of your clientele.

The operational plan should outline the logistics of your business. This includes the location of your headquarters, the structure of your project management, sourcing of materials, and the details of your service delivery process.

Emphasize the quality of workmanship, the reliability of your subcontractors, and adherence to building codes and safety standards.

Discuss your marketing and sales strategies. How will you generate leads and maintain a steady stream of projects? Consider advertising methods, customer referral programs, and strategies for upselling services.

Incorporating digital strategies, such as a professional website, online portfolio, and social media engagement, is increasingly important for reaching today's homeowners.

The financial section is vital. It should include your startup costs, revenue projections, operating expenses, and the point at which you expect to break even.

Home renovation projects can vary greatly in size and profitability, so it's essential to have a detailed financial plan. You can refer to our financial forecast for a home renovation business for guidance.

Compared to other business plans, a home renovation plan must address specific challenges such as project management, regulatory compliance, and the potential for unforeseen issues during renovations.

A well-crafted business plan will not only help you define your strategy and approach but also prove invaluable when seeking investment or loans.

Lenders and investors will look for a thorough market analysis, realistic financial projections, and a clear plan for managing renovation projects effectively.

By presenting a comprehensive and substantiated business plan, you showcase your professionalism and dedication to the success of your home renovation business.

To streamline the process and ensure you cover all necessary elements, you can start with our home renovation business plan template .

A free example of business plan for a home renovation company

Here, we will provide a concise and illustrative example of a business plan for a specific project.

This example aims to provide an overview of the essential components of a business plan. It is important to note that this version is only a summary. As it stands, this business plan is not sufficiently developed to support a profitability strategy or convince a bank to provide financing.

To be effective, the business plan should be significantly more detailed, including up-to-date market data, more persuasive arguments, a thorough market study, a three-year action plan, as well as detailed financial tables such as a projected income statement, projected balance sheet, cash flow budget, and break-even analysis.

All these elements have been thoroughly included by our experts in the business plan template they have designed for a home renovation .

Here, we will follow the same structure as in our business plan template.

Market Opportunity

Market analysis and projections.

The home renovation industry is a robust and ever-evolving market with significant growth potential.

Recent studies have shown that the global home improvement sector is projected to reach a value of over $1,000 billion by the next few years. This growth is driven by a rising trend in home ownership and the increasing interest in personalizing living spaces.

In the United States, there are over 500,000 businesses operating in the home renovation industry, generating an annual revenue of approximately $450 billion. This underscores the critical role home renovation services play in the American economy and the housing market.

These statistics highlight the vast opportunities available for businesses within the home renovation sector.

Industry Trends

The home renovation market is witnessing several key trends that are shaping the future of the industry.

Smart home technology integration is becoming increasingly popular, with homeowners looking to enhance convenience and energy efficiency through automated systems and intelligent devices.

Eco-friendly and sustainable home improvements are also on the rise, as consumers become more environmentally conscious and seek out green materials and renewable energy solutions.

There is a growing demand for multi-functional spaces and flexible design, reflecting the need for homes to adapt to remote work and changing family dynamics.

Additionally, the DIY movement continues to flourish, supported by online tutorials and the availability of home improvement tools and materials. However, for more complex projects, professional renovation services are still in high demand.

Online platforms and mobile applications are streamlining the way homeowners find and engage with renovation professionals, making the process more accessible and transparent.

These trends indicate a shift in homeowner preferences and priorities, which home renovation businesses must consider to stay competitive and relevant.

Key Success Factors

Several factors contribute to the success of a home renovation business.

Quality of workmanship is paramount. A company that consistently delivers high-quality renovations will build a strong reputation and a base of repeat customers.

Innovation in design and the ability to offer customized solutions can set a business apart in a crowded market.

Location and accessibility are important, as a local presence can influence homeowners' choice of renovation service providers.

Exceptional customer service is essential for ensuring client satisfaction and fostering positive word-of-mouth referrals.

Lastly, effective project management, competitive pricing, and the ability to incorporate sustainable practices are crucial for the long-term viability and profitability of a home renovation business.

The Project

Project presentation.

Our home renovation business is designed to cater to the increasing number of homeowners looking to enhance their living spaces. Situated in a region with a booming real estate market, our service will offer comprehensive home renovation solutions, from kitchen and bathroom remodels to full home makeovers, all executed with top-notch craftsmanship and high-quality materials.

We will focus on creating functional, modern, and aesthetically pleasing spaces that reflect the unique style and needs of each homeowner. Our renovations will not only improve the visual appeal of a home but also its market value and energy efficiency.

Our home renovation business aims to set the standard for quality and customer satisfaction in the local market, transforming houses into dream homes and thereby improving the quality of life for our clients.

Value Proposition

The value proposition of our home renovation business is centered on delivering personalized and high-quality home transformations that cater to the specific desires and requirements of homeowners.

Our commitment to reliability, craftsmanship, and attention to detail ensures that every project we undertake enhances the functionality and beauty of the home, providing a tangible improvement to the homeowner's quality of life.

We are dedicated to fostering long-term relationships with our clients by providing exceptional service and transparent communication throughout the renovation process, and we aim to educate our customers on the best practices for maintaining and enhancing their newly renovated spaces.

As a trusted partner in home improvement, we strive to be a cornerstone in the community, offering a reliable and professional service that homeowners can depend on to turn their renovation dreams into reality.

Project Owner

The project owner is a seasoned professional with a passion for home improvement and a keen eye for design.

With years of experience in the construction and renovation industry, he possesses the technical knowledge and leadership skills necessary to deliver projects that exceed expectations. His expertise extends to project management, interior design, and sustainable building practices.

Driven by a vision of transforming living spaces into personalized sanctuaries, he is committed to using his skills to enhance the comfort and satisfaction of homeowners. His dedication to quality and his zeal for innovation make him the driving force behind this venture, aiming to elevate the standard of living for those seeking to renovate their homes.

The Market Study

Target market.

The target market for our home renovation business encompasses a variety of homeowners.

Firstly, we cater to homeowners looking to update or modernize their living spaces to enhance comfort, functionality, or aesthetic appeal.

Secondly, we serve individuals preparing to sell their homes who wish to increase property value through strategic renovations.

Additionally, our services are sought after by new homeowners desiring to personalize newly purchased properties to suit their tastes.

Lastly, real estate investors and property managers represent a significant segment, as they often require renovations to maintain or improve their rental or sale properties.

SWOT Analysis

Our SWOT analysis for the home renovation business highlights several factors.

Strengths include a skilled team with extensive renovation experience, a strong network of suppliers, and a reputation for reliability and high-quality workmanship.

Weaknesses may involve the cyclical nature of the housing market and the dependency on economic conditions that influence homeowners' renovation investments.

Opportunities can be found in the growing trend of home improvement and the potential for green renovations that appeal to environmentally conscious consumers.

Threats include the intense competition from other renovation companies and the potential for supply chain disruptions affecting material availability and costs.

Competitor Analysis

Our analysis of competitors within the home renovation industry indicates a competitive landscape.

Direct competitors range from other local renovation businesses to larger contracting firms and specialized service providers.

These competitors vie for homeowners' attention by offering various services, from full-scale remodels to specific upgrades like kitchen or bathroom renovations.

Competitive edges may be gained through superior craftsmanship, customer service, turnaround times, and the ability to provide comprehensive solutions from design to execution.

Understanding the strengths and weaknesses of these competitors is crucial for carving out a niche and ensuring customer loyalty.

Competitive Advantages

Our home renovation business prides itself on a customer-centric approach, ensuring that each project is tailored to the homeowner's specific needs and vision.

We offer a wide range of renovation services, from simple cosmetic updates to complex structural changes, all executed with meticulous attention to detail.

Our dedication to sustainability and energy-efficient options sets us apart, as we provide innovative solutions that benefit both the environment and our clients' long-term expenses.

Transparency in pricing, timelines, and project management processes fosters trust and reassures our clients that their home is in capable hands.

You can also read our articles about: - how to launch a home renovation business: a complete guide - the customer segments of a home renovation company - the competition study for a home renovation company

The Strategy

Development plan.

Our three-year development plan for the home renovation company is designed to establish us as a leader in the industry.

In the first year, we will concentrate on building a strong reputation in our local area through exceptional workmanship and customer service.

The second year will be focused on expanding our services to neighboring regions and increasing our service offerings to include eco-friendly and smart home solutions.

In the third year, we aim to form strategic alliances with real estate firms and architects to offer comprehensive renovation packages and further solidify our market position.

Throughout this period, we will remain dedicated to using sustainable materials, maintaining transparent communication with clients, and staying abreast of the latest industry trends and technologies.

Business Model Canvas

The Business Model Canvas for our home renovation company targets homeowners looking for reliable, high-quality renovation services.

Our value proposition is centered on delivering personalized renovation solutions that enhance the comfort, functionality, and value of our clients' homes.

We offer our services through direct consultations and digital platforms, utilizing our skilled workforce and project management expertise as key resources.

Key activities include project design, construction management, and client relations.

Our revenue streams are generated from the provision of renovation services, while our costs are mainly associated with labor, materials, and marketing efforts.

Access a detailed and customizable Business Model Canvas in our business plan template .

Marketing Strategy

Our marketing strategy is centered on building trust and showcasing our expertise.

We plan to engage with potential clients through home renovation workshops, before-and-after showcases, and testimonials from satisfied customers.

We will also develop partnerships with suppliers of high-quality materials to offer exclusive deals and promotions.

Our online presence will be strengthened through social media, SEO, and influencer collaborations to reach a wider audience and demonstrate our renovation successes.

Risk Policy

The risk policy for our home renovation company is designed to mitigate risks associated with construction projects, client satisfaction, and workplace safety.

We adhere to strict building codes and safety regulations, ensuring all projects are compliant and our team is well-trained in safety protocols.

Quality control checks are conducted at key project milestones to ensure standards are met. We also implement a careful financial management strategy to prevent budget overruns.

Comprehensive insurance coverage is maintained to protect against potential liabilities. Our focus is on delivering safe, high-quality renovation services that exceed client expectations.

Why Our Project is Viable

We are committed to establishing a home renovation company that stands out for its quality, reliability, and innovative solutions.

With a growing market for home improvements and our dedication to customer satisfaction, we are poised for success in the competitive renovation industry.

We are enthusiastic about transforming living spaces and enhancing the lifestyles of our clients while building a sustainable and profitable business.

We are adaptable to market demands and client needs, and we are excited about the future prospects of our home renovation company.

You can also read our articles about: - the Business Model Canvas of a home renovation company - the marketing strategy for a home renovation company

The Financial Plan

Of course, the text presented below is far from sufficient to serve as a solid and credible financial analysis for a bank or potential investor. They expect specific numbers, financial statements, and charts demonstrating the profitability of your project.

All these elements are available in our business plan template for a home renovation and our financial plan for a home renovation .

Initial expenses for our home renovation business include acquiring essential tools and equipment, obtaining the necessary licenses and insurance, setting up a workspace or office, purchasing a reliable work vehicle, and investing in marketing to establish our brand presence. We will also allocate funds for skilled labor, either by hiring employees or subcontractors, and for training to ensure compliance with the latest building codes and regulations.

Our revenue assumptions are based on a thorough market analysis of the local demand for home renovation services, taking into account the current trends in home improvement and the potential for high-quality, sustainable renovation options.

We anticipate a steady increase in client projects, starting with smaller renovations and gradually taking on larger, more complex jobs as our reputation for quality workmanship and reliability grows.

The projected income statement outlines expected revenues from our renovation services, direct costs (materials, labor, subcontractor fees), and operating expenses (office rent, marketing, insurance, vehicle maintenance, etc.).

This results in a forecasted net profit that is essential for assessing the long-term viability of our home renovation business.

The projected balance sheet will display assets such as tools, equipment, and any real estate owned by the business, along with liabilities including loans and accounts payable.

It will provide a snapshot of the company's financial standing at the end of each fiscal period.

Our projected cash flow statement will detail the cash inflows from client payments and outflows for expenses like materials and wages. This financial tool is crucial for ensuring we maintain adequate cash reserves to fund ongoing operations and growth initiatives.

The projected financing plan will identify the sources of capital we intend to tap into for covering our initial outlay, such as bank loans, lines of credit, or investor funding.

We will closely monitor the working capital requirement to ensure we have sufficient funds on hand to cover day-to-day expenses, such as purchasing materials, paying workers, and managing inventory.

The break-even analysis will determine the volume of renovation contracts we need to secure to cover all our costs, including the initial investment, and to start generating profits.

It will signal the point at which our business becomes financially sustainable.

Key performance indicators we will track include the gross margin on our renovation services, the current ratio to evaluate our short-term financial resilience, and the return on investment to gauge the efficiency of the capital we have deployed into the business.

These metrics will assist us in measuring the financial health and success of our home renovation enterprise.

If you want to know more about the financial analysis of this type of activity, please read our article about the financial plan for a home renovation company .

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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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Construction Business Plan Template

Written by Dave Lavinsky

Construction Business Plan

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

We have helped over 100,000 entrepreneurs and business owners create business plans and many have used them to start or grow their construction companies.

Sample Construction Business Plan Outline

Below is a construction business plan example to help you create each section of your own construction business plan:

Executive Summary

Business overview.

VB Residential Construction Company is a startup construction company located in Milwaukee, Wisconsin. The company is founded by two cousins, Victor Martinez and Ben Schmidt. Together they have over 20 years of experience in constructing homes from design concept, remodeling and renovating homes. They are highly skilled in all aspects of construction and have garnered a positive reputation in the local construction community for their ethical practices and competitive skill set. Now that Victor and Ben have an extensive network of clients and contacts, they have decided to begin their own residential construction company.

Product Offering

The following are the services that VB Residential Construction Company will provide:

• Custom home building/design build
• Home remodeling and renovation
• Project Management
• Kitchen and bath construction

Customer Focus

VB Residential Construction Company will target those individuals and industry professionals requiring home construction services in Milwaukee, Wisconsin. Those individuals are landowners looking to develop homes on their lots, architects who have clients needing homes built, developers who have the vision but need a company to make it a reality, and households needing home remodeling services.

Management Team

VB Residential Construction Company will be led by Victor Martinez and Ben Schmidt. Together they have over twenty years of construction experience, primarily in residential builds, remodeling, and renovation. They both started at a young age working and learning from their fathers. When they graduated from high school, their fathers got them jobs at the construction company they were employed at. The four family members worked together for ten years at the construction company. The fathers recently decided they were going to retire from the industry which prompted Victor and Ben to branch out on their own and start their own residential construction company.

Success Factors

VB Residential Construction Company will be able to achieve success by offering the following competitive advantages:

• Friendly and knowledgeable contractors who are able to take any project from concept to reality.
• Unbeatable pricing – Clients will receive the best pricing in town for services on any project while maintaining the best quality and customer satisfaction.

Financial Highlights

VB Residential Construction Company is seeking $200,000 in debt financing to launch its construction business. The funding will be dedicated towards securing a small office space, purchasing two trucks, and purchasing all the construction equipment and supplies. Funding will also be dedicated towards the advertising agency and three months of overhead costs to include payroll of the staff, rent, working capital, and monthly fees to the accounting and human resources firm. The breakout of the funding is below:

• Trucks: $40,000
• Construction equipment, supplies, and materials: $100,000
• Advertising agency in charge of promotions: $10,000
• Three months of overhead expenses (rent, payroll, HR and accounting firms): $40,000
• Working capital: $10,000

Company Overview

Who is vb residential construction company.

VB Residential Construction Company is a newly established contracting company located in Milwaukee, Wisconsin. Founded by cousins, Victor Martinez and Ben Schmidt, they have over 20 years experience in the construction industry. VB specializes in residential remodeling, kitchen and bath construction, as well as custom home building. VB Residential Construction Company also offers residential design, construction, and project management services. VB prides itself in delivering a level of expert craftsmanship to fulfill the vision for the client while exceeding expectations at exceptional value.

Company History

VB comes from the initials of the owners, Victor Martinez and Ben Schmidt, two cousins who have been working in the construction industry most of their lives. Both of their fathers spent decades as contractors and raised their sons working and learning the construction trade. The four have been working for another residential contractor in Milwaukee and have built and remodeled numerous homes for multiple builders and clients. Now that both of their fathers are retiring from the construction industry, Victor and Ben have decided to start their own residential construction company and use their years of experience, expertise, and contacts to be an independent residential contractor.

Since incorporation, VB Residential Construction Company has achieved the following milestones:

• Registered VB Residential Construction Company, LLC to transact business in the state of Wisconsin.
• Located a small office space to have a physical address for the company as well as a receptionist.
• Reached out to their numerous contacts to include real estate agents, developers, architects, and landowners to advise them on their upcoming construction company in order to start getting construction contracts.
• Began pricing out costs for trucks and necessary construction equipment.
• Began recruiting a team of contractors that cover different areas of construction to include mechanical, plumbing, electricians, and roofing.

The following will be the services VB Residential Construction Company will provide:

Industry Analysis

Revenue for the Construction industry is expected to continue growing over the five years as demand for new housing expands. Revenues are expected to reach $107 billion.

Relatively low interest rates, coupled with rising per capita disposable income, is expected to support individual investment in new homes, providing an opportunity for industry revenue growth over the next five years.

Per capita disposable income is expected to rise steadily over the next five years, while concurrently, unemployment will drop, proving favorable conditions for industry growth.

Housing starts are expected to rise an annualized 2.9% and this growth is projected to stem partly from forward-looking consumers that choose to purchase homes while interest rates are low. Relatively low housing stock and relatively low interest rates are expected to lead demand for industry services to increase over the next five years.

Customer Analysis

Demographic profile of target market.

The precise demographics for Milwaukee, Wisconsin are:

Customer Segmentation

VB Residential Construction Company will primarily target the following customer profiles:

• Households in search of home remodeling services
• Landowners who would like to build homes on their lots
• Architects who have clients that need home building or remodeling services
• Developers who have already partnered with landowners and/or architects and are in search of a residential contractor

Competitive Analysis

Direct and indirect competitors.

VB Residential Construction Company will face competition from other companies with similar business profiles. A description of each competitor company is below.

JM Remodeling

JM Remodeling has been in business in Milwaukee, Wisconsin since 1990. They are a full-service design and build company. JM Remodeling specializes in residential and commercial restoration and renovation including custom carpentry, kitchens, bathrooms, roofing, siding, dormers, additions, home gyms, home offices, porches and decks, and mechanical services. JM Remodeling carries a staff of plumbers, electricians, journeymen carpenters, restoration specialists, roofers, siders, sheet metal workers, and expert estimators. JM Remodeling also has an apprenticeship program to train employees within the company. They are licensed, bonded and insured and also part of the National Association of Remodeling Industry (NARI). JM Remodeling also provides warranties on all their services. The work is guaranteed by labor warranties, factory warranties, and extended warranties.

Cream City Construction

Cream City Construction has more than 50 years experience in home design, remodeling and renovation in the Greater Milwaukee area and Southeastern Wisconsin. The home remodeling services they provide are additions, whole house remodeling, kitchens, bathrooms, lower levels, master suites and historic renovations. Cream City Construction is a design build company that works with the client to create the design plans, generate project costs, and build the project.

Cream City Construction is owned and managed by Todd Badovski and Jim Grote. Together they have decades of experience and have spent years refining the skills required to run a high end, quality driven remodeling company. The majority of their projects come from repeat business or referrals from clients delighted with their previous service. Cream City Construction is also a member of the National Association of Remodeling Industry (NARI) as well as the Historic Milwaukee Incorporated.

Sazama Design Build Remodel, LLC

Former restaurant owner Don Sazama established Sazama Design Build Remodel, LLC in 1987 after becoming a Master Carpenter. He wanted to merge his passions of business and design and expand his skills in carpentry and architecture. Don’s firm has completed over 700 homes and won 11 awards from the Milwaukee Home and Living magazine. Sazama Design Build Remodel builds homes that are modern and luxurious and have completed many large remodels of bathroom and kitchen renovations. Sazama likes to collaborate with firms such as Ivy Interiors and an award-winning landscape designer, Gingko Leaf Studio. Sazama Design Build Remodel can build and design all aspects of a home – from a home office, outdoor entertaining area, serene spas, and inviting kitchens. The team at Sazama is able to do a historic renovation, build or renovate into something modern and posh, or keep it traditional.

Competitive Advantage

VB Residential Construction Company will be able to offer the following advantages over their competition:

Marketing Plan

Brand & value proposition.

VB Residential Construction Company will offer the unique value proposition to its clientele:

• Highly trusted and professional contractors with over 20 years of experience remodeling, renovating, and building homes.
• Unbeatable pricing to its clients – VB Residential Construction Company does not mark up its services at a large percentage. They will offer the lowest prices in town.

Promotions Strategy

The promotions strategy for VB Residential Construction Company is as follows:

Word of Mouth/Referrals

Victor and Ben have built up an extensive list of contacts over the years providing home construction services for numerous highly satisfied clients. Most of the clients are repeat customers and have also referred them to other associates for home projects. These referrals and repeat customers are very likely to use VB Residential Construction Company instead of the previous construction company Victor and Ben were employed at.

Professional Associations and Networking

VB Residential Construction Company will become a member of construction and professional associations such as the National Association of Remodeling Industry (NARI) and the Milwaukee Chamber of Commerce. VB will also become a member in associations where other builders, developers, and architects are a part of. They will focus their networking efforts on expanding their client network.

Print Advertising/Billboard

VB Residential Construction Company will invest in professionally designed print ads to display in programs or flyers at industry networking events. They will also invest in two billboards to display in highly trafficked areas of town.

Website/SEO Marketing

VB Residential Construction Company will utilize the same advertising company that designed their print ads and billboards to also design their website. The website will be well organized, informative, and list all their services that VB is able to provide. The website will also list their contact information and a gallery of pictures that show their previous projects. The advertising company will also manage VB’s website presence with SEO marketing tactics so that anytime someone types in the Google or Bing search engine “Milwaukee residential contractor”, “contractor near me”, or “residential contractor near me”, VB Residential Construction Company will be listed at the top of the search results.

The pricing of VB Residential Construction Company will be moderate and on par with competitors so customers feel they receive value when purchasing their services.

Operations Plan

The following will be the operations plan for VB Residential Construction Company.

Operation Functions:

• Victor Martinez and Ben Schmidt will be the owners and managers of the company. They will oversee all staff, contractors, and subcontractors. They will also act as project managers for every job they receive and handle all pricing and bids to the client.
• Victor and Ben will employ a team of contractors under them that will have an array of skill sets. The contractors will be trained and experienced either in plumbing, mechanical, electrical, roofing, or siding. Not all contractors need to be certified in all trades, but they need to be certified in at least one of the trades.
• Office manager/assistant to be located at the small office. This person will handle all incoming calls, assist with visiting clients, bookkeeping and maintain files.
• Victor and Ben will utilize a third-party human resources company to handle all hiring, onboarding, payroll, and benefits for the staff. The HR company will also handle all employee issues.
• Victor and Ben will also pay a third-party accounting firm to manage all the high level accounting and tax payments.

Milestones:

VB Residential Construction Company will have the following milestones complete in the next six months.

3/1/202X – Finalize contract to lease small office space

3/15/202X – Execute advertising agency contract 4/1/202X – Begin networking and placing bids for construction jobs

5/1/202X – Begin recruiting and hiring team of contractors

5/15/202X – Purchase all necessary construction equipment, supplies, and trucks

6/1/202X – Start on first official job as VB Residential Construction Company

Victor and Ben are highly skilled at project management and residential construction. They are also both certified in plumbing, electrical, and mechanical. In the next few years, they will be certified as Master Carpenters.

Financial Plan

Key revenue & costs.

The revenue drivers for VB Residential Construction Company are the upcharge they will charge to the clients for their services. VB will purchase or subcontract a service at cost and will charge a 15% markup in order to obtain the markup fee. 15% is below the normal 25%-30% that other competing residential contractors charge.

The cost drivers will be the overhead costs required in order to maintain a construction company. The expenses will be the costs to purchase and maintain construction equipment and trucks, payroll and overhead costs for the staff, and rent and utilities. Other expenses will be the cost for the advertising agency, accounting firm, human resources firm, and membership association fees.

Funding Requirements and Use of Funds

VB Residential Construction Company is seeking $200,000 in debt financing to launch its construction business. The funding will be dedicated towards securing a small office space, purchasing two trucks, and purchasing all the construction equipment and supplies. Funding will also be dedicated towards the advertising agency and three months of overhead costs to include payroll of the staff, rent, and monthly fees to the accounting and human resources firm. The breakout of the funding is below:

Key Assumptions

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Initial Monthly Average Contract Amount: $20,000
• Growth in Average Monthly Contracts: 10%

Financial Projections

Income statement, balance sheet, cash flow statement, construction business plan faqs, what is a construction business plan.

A construction business plan is a plan to start and/or grow your construction 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 construction business plan using our Construction Business Plan Template here .

What Are the Main Types of Construction Companies?

Construction companies can be classified according to the type of constructions that they perform. Some are small renovation contractors, others are new home builders and others are commercial construction companies.

What Are the Main Sources of Revenues and Expenses for a Construction Company?

Construction companies get their primary source of revenue from individual contracts for new homes, remodeling projects or commercial projects.

The key expenses for construction companies are office space rent, salaries and wages, and equipment costs. 

How Do You Get Funding for Your Construction Business Plan?

There are many options for financing a construction company like SBA loans, commercial loans, personal loans, or line of credit. There are also equipment funding opportunities that cover expenses associated with necessary tools, machinery and other equipment. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Construction Business?

Starting a construction 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 Construction Business Plan - The first step in starting a business is to create a detailed construction 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 construction 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 construction business is in compliance with local laws.

3. Register Your Construction Business - Once you have chosen a legal structure, the next step is to register your construction 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 construction 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 Construction Equipment & Supplies - In order to start your construction 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 construction 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 construction business:

• How to Start a Construction Business

Where Can I Get a Construction Business Plan PDF?

You can download our free construction business plan template PDF here . This is a sample construction business plan template you can use in PDF format.

Other Business Plan Templates

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Construction Company Business Plan

Growing a construction company is much more difficult and taxing than completing projects.

From acquiring a new project to meeting deadlines, managing the budget, and many more things in between- you will find yourself drowning in responsibilities when you start a construction company.

A construction business plan can come to your rescue in such burdensome situations. If prepared well, it can become a reference point for your company as it continues to grow.

Confused about how to write a business plan?

Well, this article will serve you perfectly. It will help you understand the contents of the business plan and offer a sample template for your construction company.

So let’s build a solid construction company business plan with this detailed guide.

Let’s dive right in.

Key Takeaways

• Venture into the market by conducting thorough industry and market analysis.
• Widen the scope of your service offerings to cater varying needs of your target audience.
• Create a detailed operations plan to get thorough guidance in your business operations.
• Conduct a SWOT analysis to identify your competitive edge over the competitors.
• Determine your marketing strategies to launch your business and get it popular amongst your target market.
• Define your business objectives, goals, and mission values to create a foundation for essential business policies.
• Account for various project costs, operating costs, and office expenses to form realistic cash-flow projections.

Why do you need a construction company business plan?

Apart from the fact that investors and banks would ask for a business plan when you seek funding, here are a few more reasons you need a business plan.

• A business plan offers a roadmap to your business. It acts as a guiding block that has answers to all your how, when, where, and what.
• It helps in determining the exact target market for your business and formulating strategies to cater accordingly.
• There are millions of construction companies competing in the industry. You can identify your strengths through a business plan and design a competitive edge to stand apart.
• A well-rounded plan prepares you for emergencies that may arise in your business by making a plan for every situation.
• A whole lot of business processes repeat every day. A business plan helps bring consistency by establishing SOPs for various business activities.

And of course, you get your desired funding with a solid business plan that vouches for the potential of your construction company.

Key components of a construction business plan

Writing a business plan gets much easier with a structurally defined flow. Well, let’s have a look at key components that a construction company business plan must have.

Executive Summary

A brief summary of an entire business plan that will encourage the readers to read further.

Company Overview

A brief company description including every detail from company structure to its mission statement and future goals.

Market Analysis

A thorough analysis of the construction industry and your target market. It also includes sections for competitor analysis, future market trends, and scope of growth.

Construction Services

Outline the construction services that your company will offer. Highlight any additional services that will make you a distinct player.

Marketing and Sales Strategy

It includes a strategic plan to achieve success through marketing and sales. Determine the best course of action for your business.

Management Team

Introduce key personnel in managerial and leadership roles. Discuss their roles, qualifications, experience, and expertise.

Operations Plan

A detailed plan that streamlines the everyday operations right from construction methods to hiring employees.

Financial Plan

A financial plan highlights the prominent figures and key reports of your construction company by making necessary financial projections.

Let’s dive further into these topics and get a detailed understanding of writing your business plan.

Related Construction Company Resources

• Construction Company Marketing Plan
• Construction Company Financial Plan
• Key Stats for the Construction Sector
• Start-up Cost For Construction Company
• How to Start a Construction Business

A step-by-step guide to creating a construction company business plan

A poorly written plan serves no purpose. However, with this step-by-step guide, you will uncover every detail that goes into making a fantastic and purpose-serving business plan.

1. Get a business plan template

Writing a comprehensive business plan is taxing and time-consuming. But if you do it well, you will have a guidebook for running your construction company.

Now, there is a lot that needs to be considered, planned, and accounted for as you start writing the plan. Even if you closely follow a construction business plan outline, there are higher chances of you losing track or getting stuck at certain sections.

This is why you need a business plan template to give a solid structure to your business idea. With industry-relevant examples and a guide, the Upmetrics business plan template is easy to edit and customize.

Whether you own a general contracting firm or specialize in residential construction or specialty trades- we have plenty of construction-related templates for you to choose from.

Say goodbye to boring templates

Build your business plan faster and easier with AI

Plans starting from $7/month

2. Write an executive summary

The executive summary is a concise yet insightful description of your entire business plan.

This one-page document summarizes the most important questions that a reader might have and offers a peek into what they are about to uncover. Investors take a brief glance at your executive summary before deciding whether to proceed further or not.

An executive summary must outline the following details of your construction business in persuasive consecutive paragraphs.

• The exact business opportunity
• The target market
• The problem and the solution to it
• Products and services offered by you
• Market size and growth potential
• Financial highlights
• Management team

Maintain a personal storytelling tone while writing this section and encapsulate every minute detail that can make a difference.

But wait, don’t start writing yet. Write your executive summary only after you are done writing an entire plan. This will help you summarize effectively.

3. Prepare a company overview section

This section of a business plan will focus entirely on the details of your construction company.

From the type of construction company to the construction company’s goals- everything in this section is about your company description.

To begin with, highlight the type of construction business you will start. For instance, a residential construction company, general contracting company, industrial construction company, or specialty trade construction.

Clarify, if this will be a new business or an extension of existing business. If the business is already operating, offer a brief description of the business history.

After that, highlight the business structure of your construction company. Are you going to be a sole trader or start a limited liability company (LLC) or a limited partnership firm? The business structure you choose will decide how the finances and taxes will work in your business.

Now, this section is your chance to weave magical stories around your construction company. Present the mission statement, company’s objectives, and future goals over here.

For instance,

Mission statement : Syncore aims to become a trusted name for sustainable residential construction projects in Arizona by 2028. With our commitment to the highest quality standards, we will penetrate the market with our premium budgeted solutions.

Business goals :

• Onboarding and signing 15 construction projects in a span of 6 months.
• Generating revenue of $2 million by 2025.

Like this, you will write this entire section in parts by offering a brief overview of your construction business.

4. Conduct a competitive and market analysis

In this section of a business plan, you begin with industry analysis and then narrow it down to your particular market segment. This is important to show your potential investors that there are promising opportunities in this market.

Using market research practices determine the target market for your construction business. Create a buyer persona to identify what your ideal customer will look like.

Further, highlight your competitors in this competitive construction industry. Using SWOT analysis and PESTEL, determine the strengths and weaknesses of competing construction companies. In this section, you will also highlight your strengths to gain a competitive edge over existing players.

Don’t limit your market study to merely understanding the current scenarios. Extend the research and identify future trends and growth possibilities in your targeted market.

If you are a residential construction company focused on sustainable building practices, you must include the following details in your market analysis section.

• How large is the construction industry?
• What segment of the construction market will you capture?
• Who will avail of the construction services?
• What is the spending capacity of your target customers?
• Who are the top competing construction companies?
• What are the emerging trends in the industry and how will you leverage those?
• What is the growth potential of your target market?

Focus on quality market research as this will form the base of your further projections and strategies.

This screenshot of the construction business plan example highlights only the market size for HDFL construction. You can also include details like competitors analysis, growth potential, and market trends here.

5. Describe your construction service offerings

What construction services will you offer your potential clients?

Offer a detailed answer to this question, as you write a business plan section for service offerings.

Overall, this section should highlight every service offering that will bring you money. This could include services like,

• General contracting services
• Design and Engineering
• Construction
• Renovation and remodeling
• Project management
• Specialty services i.e. concrete work, HVAC installation, Roofing services
• Maintenance and repairs

Offer a brief understanding of these service offerings and highlight construction jobs you will specialize in. For instance, remodeling of kitchen and bathroom.

Now, will your construction company sell any construction materials for profit? If so, include details for that as well.

It’s important to consider the breadth of your service offerings to keep the customers coming back.

Overall, this section is your chance to prove to potential investors that your services can stand solid in the competitive construction industry.

6. Propose marketing and sales strategies

According to the IBIS world report , there are more than 3,787,470 construction businesses in the USA. Starting a construction company will add one more to this list, but hey- How do you wish to make a brand that your target audience can recall easily?

All the market assessment and understanding of your potential clients will come in handy at this stage as you make your marketing plan and sales strategies.

Take an opportunity to lay out your sales plan in this section. If you have existing customers, explain how you plan to retain them.

After you are done making your sales strategies, touch the marketing aspect.

Firstly, identify the way you want your brand to be recognized- as an ordinary construction firm, a luxury construction company, a sustainable solutions firm, or an affordable construction company. This will help you make a marketing plan.

Your marketing strategy should answer the following questions:

• Which marketing channels will you use-  Online, offline, or a mix of both?
• How will you generate more leads?
• Online marketing methods- search engines, social media, Email marketing, content marketing, etc.
• If you are going to be utilizing social media platforms- which ones?
• How much will you budget for paid ads?
• Will you use billboards, pamphlets, and newspaper advertisements to market your business?

Keep in mind the marketing channels where you can find your potential customers. For instance, you are more likely to find conversions through Email campaigns than social media campaigns, if you are finding clients for commercial construction.

All in all, in this section you have to draw potential investors’ attention with your sales and marketing strategy.

7. Introduce your management team

Everyone is aware of the cutthroat competition in the construction industry. Knowing that you need an able team to transform your business plan into a successful venture.

After laying out your marketing strategy, it’s time to introduce the key management and leadership team to your business plan.

It’s okay to brag about the talented individuals you have in your company. From construction heads to project managers, highlight the achievements, experience, and expertise of these people and prove their asset-worthiness for your company.

Also, draw the hierarchical map to give potential investors an idea of your organizational structure.

This is your time to prove that you have both the means and manpower to run a successful company.

8. Outline your operational plan

You may know construction, but do you know how to run a construction business?

As someone said, “ Seamless operations are the silent engine of extraordinary business achievements”

Before even taking the first project, it’s important to define operations and SOPs for different business activities. Make it so thorough that it can act as a guidebook whenever a problem arises in your construction company.

As you write a business plan for this section, focus on answering the following questions:

• What construction materials will you use?
• What will be the supply chain process in your construction company?
• Who will oversee the project management on site?
• What will be the timeline for completing projects?
• What will be health and safety protocols for construction workers?
• What will be the process of construction work?
• How will the communication flow within an organization?
• What technologies and equipment will you use?
• How will you ensure quality work?
• How will you hire employees?
• What accounting software will you use?

This is just a general gist of questions that can help you prepare this section. Consider it as a living document that will undergo various changes as the business commences and grows.

A thorough operations plan will lay a clear groundwork for running a company. Moreover, it will instill investors’ faith in your ability to run a construction company.

9. Create a financial plan

Writing a sound financial plan is a challenge but nothing that your determined mind can’t handle.

Whether you plan to raise funds or get bank loans, you need a sound financial plan. Investors will analyze this section and only if they find your business financially viable, will they invest.

In this section, you will make financial projections and estimates for your construction company. This includes forecasting sales, estimating startup costs , projecting overhead costs, and making a pricing plan.

Using the startup costs projection, determine how much funding is essential to start your own construction company.

Also, prepare different reports like income statements, cash flow statements, balance sheets, and break-even analyses using the projections made earlier.

To make a financial plan more relevant, consider various progressive and aggressive situations.

Lastly, prepare graphs, charts, and diagrams to make this section visually appealing and easy to grasp.

Now, stop. Don’t start writing a financial plan yet. You need a financial forecasting tool from Upmetrics to help you with projections and calculations of cash flow, sales, revenue, and everything else. Simply enter the data and it will make detailed and precise calculations for you.

Trust us, you don’t want to scratch your heads writing the entire plan from ground level.

And that’s it! With all this information you pretty much know everything that a construction business plan must have.

Construction Industry Highlights 2023

Now that you are almost set to open a construction company, here are a few industry statistics that might interest you.

• Market size : The US construction market sector was valued at 1.8 trillion US dollars in 2022.
• Growth of the virtual construction market : The global BIM market is 7.9 billion US dollars . North America is projected to be a market leader capturing 30% of this market.
• Rise in prefabrication and modular construction : Healthcare facilities followed by hotels/motels and educational institutions are most likely to avail of modular construction facilities.
• Major concerns : The leading concerns encircling the construction industry are inflation and supply chain disruptions faced by nearly 90% of constructors.
• Sustainable and green building : There is a continuous increase in demand for sustainable and green building solutions. As for 2021, the green building market in the USA was reported to be approximately 83 billion dollars .
• Growing investment in smart cities : According to IDC, the investment in smart cities is expected to grow to 203 billion dollars by 2024.

From sustainability to tech-centric processes, the construction industry is making huge shifts in trends. Both, small businesses and large have to evolve according to changing times to keep themselves relevant.

Download a sample construction business plan

Facing difficulty writing a business plan? Well, we have a perfect resource for you.

Download the Upmetrics sample business plan template. Our template offers step-by-step instructions and prompts to ease the entire plan writing process. It’s designed to meet modern market needs and is perfectly detailed with construction-relevant examples.

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Frequently asked questions, what kind of market research should i include in my construction business plan.

The market research for your construction business plan must include the following details:

• The market size of your targeted market, i.e. commercial construction, residential construction, etc.
• The target audience of your services and their buyers’ persona
• Top competing firms and companies offering similar services
• Emerging trends in your market
• Growth potential for your firm

Is a SWOT analysis necessary for a construction company business plan?

Absolutely yes. There are more than a billion construction companies in the USA itself. Starting another business won’t guarantee success unless you have a business that can withstand the dynamic competitive environment. SWOT analysis will make you aware of the company’s strengths, weaknesses, and the opportunities it can avail

What are the initial startup costs for a construction company?

It is possible to start a construction company with as little as $10,000. However, if you plan to set up a mid-sized construction company, expect to spend anywhere around $50,000-$250,000 on getting a basic setup. This includes accounting for licenses, insurance, office setup, construction materials, and payroll for the initial months.

Can I get government grants for a construction business?

Yes, you can apply for government grants to start your construction business. Check the local, federal, and state regulations to see which grants are applicable to your business. Check the eligibility and apply accordingly.

How often should I update my construction business plan?

A business plan is a living document that can guide you toward success if mapped properly. Ideally, you should update your business plan every 4-6 months to make it relevant. Set aside time to do so as a renewed plan will offer deep and meaningful insight into your business goals.

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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Rental Remodeling Business Plan

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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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