There’s always something happening in the real estate market. As one of the major driving forces behind every economy, it offers a wide range of opportunities for different types of businesses. Due to the lively character of this field, it attracts lots of new entrepreneurs. Furthermore it can work well as a part time business because you can purchase and renovate homes at your own pace.
According to data published by the US Census Bureau, about 592,000 new family houses were sold in the US in 2016. That figure represents a 16 percent increase year-over-year, so you can see a promising increase in this field of the economy. From this point of view, it seems that this niche has a lot of potential. Hence, it would be wise to seize the moment and start your own home renovating business.
Start out as a Subcontractor
Although the workload in the housing market is growing, the beginning will be all but simple. If you want to begin your business successfully, get ready for a multi-step process. First, start out as a regular worker in a home renovating business or a bigger (re)construction company. It will help you make connections in the field and gain some precious experience.
Then, learn the tricks of the trade regarding the financial side. As time goes by, start developing an exit strategy. For instance, start doing some less-challenging home renovation projects on your own as an extra job. If you’re good, you’ll get recommendations from your clients. As your workload keeps growing, hire assistants and increase the number of work hours. Finally, when your side job becomes your main source of income, leave your current position and launch a brand-new home renovation business.
Calculate Your Budget in Advance
As opposed to construction businesses, which are usually huge enterprises, home renovating ventures are managed more easily in financial terms. Nevertheless, don’t think it will be smooth sailing. With many entrepreneurs doing the same thing as you, the most important step is to ensure that you have enough budget to cover your initial expenses.
This budget should include your workers’ wages (direct labor), overhead expenses (the total cost of all the means you use to carry out the work) and direct materials (pretty self-explanatory). When you’ve calculated all those initial expenses, it’s time to see what financing models you can apply for. Make appointments in several banks and check if they can offer you some affordable business loans. Also, do some research on government grants for small businesses. Even if you don’t qualify for one at the moment, it’s good to know what options you can count on in the future.
Avoid Unregistered Work
Future home renovators should never work without proper licenses. When you’ve decided it’s time to pave your own business path, pay a visit to the local Small Business Administration office (e.g. on your way to the bank). Tell them about your business plans and get all the information that might be useful for the initial stage of your professional development.
Here you’ll also have to decide how you’ll to register your business. If you already know you’re going to hire employees soon, registering as a limited liability company (LLC) is the most practical solution. The greatest benefit of this business model is that your personal assets will be treated separately from your business finances.
In addition, you have to check with the authorized local government agency whether you need only to register as a home renovation office or you also need to get a license. The rules are different even from state to state, let alone from country to country.
When you’re at the beginning of your home renovating business adventure, try to narrow down the number of tasks your business performs. If you go too wide, you’ll lose focus, which might lead to issues such as missing deadlines or being late with payments. Wise entrepreneurs in the home renovation industry start from strictly limited work.
For instance, offer only bathroom renovation or only carpentry work at the beginning. Also, make your business visible for your potential clients. You can register on one of those contractor databases and become available through the mobile home remodel search. That way, it’s more likely that new customers will spot your venture and hire you for their remodeling work.
Suppliers and Collaborators
People who supply you with the materials that you need for your home renovating business and your collaborators need to be treated like your family members. Although it’s a business collaboration, it should be based on mutual trust and support.
The most important principle you should always stick to is paying your suppliers and collaborators on time. Your business will depend on them, as much as it will depend on your own skills. For instance, you could use online invoicing to speed up the payment process and accelerate the workflow of your business. In addition to the workflow, those practical tools also ensure easy cash flow, which will result in smooth and fast business cooperation.
The home renovation market can host many new businesses. While it will take a lot of time and sweat to become an established business owner in this field, it offers a lot of space for (both home and professional) improvement. Therefore, take the plunge and launch your very own home renovation business.
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Stacey Cooper is a contributor to BusinessTown.com.