Residential contracting is always in high demand. People will always need residential contracting professionals to make repairs on their homes and improve their homes. Starting your own residential contracting business can be a very lucrative endeavor, but there are things that you must do to ensure that you are successful. Here is how you can start your own residential contracting business.
1. Define Your Services
There are a lot of niches in the residential contracting industry. Your first step is to define what services you will offer. Defining your services begins with evaluating your skill set. For example, do you have roofing experience? If you do, you are well suited to becoming a trusted local roofer.
Defining what services you offer, whether you are starting a roofing business or a brick repair business, is essential. You will want to do some market research to see what services companies like the one you are starting offer and how much they charge. If you can charge a bit less and maybe add some services that can help to boost your client base.
A professional business has well-defined services that meet clients’ needs. Transparency is important to clients because they want to know what they are paying for. Defining your services and creating a menu that you can present to the client for your paving services will help build trust. Start with simple services to help keep costs down. Of course, as time moves forward, you can always add more services to the menu.
2. Have a Business Plan
A well-thought-out business plan is like a guidebook for success. The business plan for your residential contracting company should include things like your goals and objectives, market research, financial projections, the business’s legal structure (we talk more about legalities in number three), and your marketing strategy. During this development phase, you will also pick your business name.
A business plan is a dynamic document that will change as your business grows. Every business should have a plan, including a tree business. The plan will be used to help you secure financing. It is something that prepares you for success. Your plan legitimizes your business.
Creating a business plan doesn’t have to be overwhelming if you take it part by part. Some agencies specialize in helping small businesses develop a business plan that offers their services for free. Contact your local Small Business Administration, and they will point you in the right direction. Don’t skip this step.
3. The Legal Parts
Starting a residential contracting business is like starting any small business; there are legalities that you must deal with, and they may differ depending on your niche. For example, a pool contractor may have special regulations and licensing because of safety and environmental concerns. Other residential contracting niches may have other requirements and licensing needs based on their services.
In most cases, the more risk the service poses to the environment or people, the tighter the regulations and requirements are to own that business. At a minimum, every residential contracting business will need business insurance, licensing for that specific niche, and to be registered in the state in which they provide services. There are other legalities that you will also need to consider.
Will your business be a sole proprietorship, limited liability company, or a corporate entity? When setting up your business, you will need to decide how your business will be incorporated. It is strongly suggested that you get legal advice from an attorney specializing in setting up businesses. There are advantages to certain business designations that you should be aware of. You will need both a federal and a state tax ID number.
4. Think About Financing
How will you finance your residential contracting business? Whether you offer drywall services or brickwork, you will need tools, equipment, and supplies to get started. It is important to have a financial plan in place. There are ways you can find the money to get started. Many small business owners tap into their savings to get started.
You can take a small business loan (your business plan will be necessary), you can tap into your home equity, and if all else fails, you can use credit cards. A financial plan should include where the money will come from, how much that money will cost you in the long run, and how you plan on paying any loans or credit back. Some residential contracting businesses are more expensive to start than others, but they all require an initial upfront investment.
If taking a long or taking on debt is not for you, consider asking people to invest in your business for a share of your business. Ask friends and family if they are interested in backing your business. You can also check out crowdfunding sites and see if you can find investors there. You may have to get creative to fund your business.
5. Branding and Marketing
How do you plan to inform people about your residential contracting business? Your marketing plan highly depends on who you are marketing to. For example, if you are marketing directly to homeowners, your marketing will take one route. If you are marketing to other businesses and directly to the homeowner, your marketing will take a different route.
Let’s say you own a gravel delivery business, for argument’s sake. That means that you may sell your products directly to the homeowner, but you also will likely sell your products to paving companies, landscape companies, and other businesses. Your approach to branding and marketing your business must include reaching both the business and personal use audiences.
A catchy logo and slogan that people will remember can help brand your business. Investing in a marketing team can be a smart investment. A professional team can help develop your brand and market your business to build your client base. It is important to recognize the value of having a support team to get your business off the ground and push it in a positive direction.
6. Equipment and Supplies
Every residential contracting business needs equipment and supplies. Having the funding in place is half the battle, but you must still develop relationships with vendors. For example, a garage door installation company will need parts, components, trucks, tools, and other supplies to carry out the services.
The garage door company owner will need to secure vendors for all the necessary parts, components, and supplies. This type of business will also need to secure vendors for their vehicles, maintenance of their equipment and vehicles, and more. There are many working parts to owning a residential contracting business that require the support of outside sources.
The goal is to keep costs low without sacrificing quality. You may have to shop around to find vendors that can meet your needs without breaking the bank. Some vendors will offer ‘terms’ for their products, equipment, and supplies, so you don’t have to pay out of pocket upfront. Finding a reliable vendor is essential to the success of your business.
7. Hiring Employees
Will you need to hire employees? Depending on the type of residential contracting business you are starting, you may need to hire people before you can start. For example, if you offer stucco services, it is something you can do on your own, but doing it all on your own will be very limiting. You will have to do one job at a time, and it likely will take some time to complete each project.
You should have a hiring plan in place. What qualifications will you require? You must hire people who are trustworthy and dependable. You should have a background check process in place. Remember that anyone that you hire is a representative of your business.
Many small business owners prefer to use an agency to manage their recruitment and hiring. An agency does all the checks, so you don’t have to. Working with an agency can make it easier to find qualified employees. Of course, there are fees to take advantage of the service. However, it may be worth the investment.
8. Managing Your Finances
Once you have your residential contracting business off the ground, you must ensure your business finances are properly managed. There are taxes to worry about, paying vendors, payroll, and other business finances to be managed. Most small business owners outsource their bookkeeping, payroll, and tax preparation.
you must keep track of your business finances and ensure that taxes and other obligations are met on time. Using a professional to manage your business finances can come with the added value of finding tax breaks you may not be aware of. Payroll that is automated ensures that everyone gets paid on time. In other words, professional help can take a lot of stress out of managing business finances.
Outsourcing financial management can be more affordable than hiring someone full-time to manage your bookkeeping. Hiring someone full-time to manage your books during the early formation of your business can be cost-prohibitive. Outsourcing options typically allow you to pay for only the services that you use. Outsourcing can be a budget-friendly option for financial management.
9. Technology and Office
Most residential contracting companies don’t immediately open a brick-and-mortar office location, but you will still need office equipment and technology. Whether working out of your garage or at your dining room table, you will need computers, phones, a printer, and other technology to run your business. Launching a website for your business can help clients find you, but you must manage that website. You will need a place to print out bills, keep mail supplies, and track inventory. You will also need the equipment to do it all.
It is important that you put technology into your plan. Which software will you need/use for your business? Different niches have different software options to help plan projects, track inventory, and design estimates. Investing in the right software is going to make your business more productive and help you stay on top of things.
If you are not trained in using certain technology and software, you should invest some time in learning. As a business owner, you should be able to manage every area of your business on your own in case you ever have to. It is important that you know how to do everything from printing out invoices to reading expense statements. Become familiar with the technology that is there to assist you and invest in products and equipment that will make running your business easier.
10. Customer Satisfaction
Word of mouth is the best advertisement for a residential contracting company. How will you ensure that your customers are satisfied? How will you handle customer problems? What type of warranty will you offer? It is essential that you have a clearly laid out plan for dealing with customers who are not satisfied with the project and how you will deal with customers overall.
Consumers appreciate responsiveness. How long will it realistically take you to return a phone call or an email? How do you prefer your customers to contact you? These are important questions to address. Once you have the answers, it is important that you make it a part of your service guarantee. It will hold you accountable to your customers and ensure they understand what to expect.
Clear communication and shared expectations are an easy way to ensure you are satisfying your customers. Owning a residential contracting business requires hard work, but it can be a great way to earn a living. You get to be your own boss, and your income potential is only limited by the amount of work you are willing to put into the venture.
These are just a handful of tips to can follow to start your very own contracting business. By using these tips, you can ensure your business is off to a great start. Remember, things don’t happen overnight. They take time and dedication. Success is obtainable with hard work. Learn more about starting your residential contracting business today.