It’s 2023! What better time to start a home renovation business than now?

In light of the economic headwinds Canada is facing, you might think the demand for home renovation projects is waning. Yet, data from home improvement company HomeStars suggests otherwise. 

HomeStars’ 2022 Reno Report finds homeowners spent an average of approximately $13,000 for interior renovations between March 2021 and February 2022, up from $8,300 one year earlier. Furthermore, the report states homeowners are expected to spend an average of more than $25,000 on interior renovation work into 2023.

That bodes well for general contractors and others providing handyman services looking to expand their services to interior residential renovation work.

A home renovation contractor working at a job site.

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If you’re a new entrant to the home renovation industry, here are nine steps to take to build and grow a home renovation business to take advantage of the opportunity:

1. Decide what renovation work you will do

In interior design and construction circles, renovation and remodelling are similar concepts that you will hear, but each has its definition and is not the same.

A renovation is the work of improving or repairing a structure or refreshing and updating a living space. Often, one professional can manage a renovation project depending on its scope. Remodelling involves completely changing or adding to a structure and is often a large project that requires a team of professionals to complete.

So, a home renovation project could be updating the look of a kitchen in a house, and a remodelling job could be adding a room to a house or reconstructing a room entirely. If you choose to get into remodelling residential properties, you’ll likely need to hire subcontractors and possibly a structural engineer for the jobs you take.

2. Up your skills

Every profession demands improving your knowledge and skills as you progress through your career. For home renovation experts, you might need to learn new skills before diving headlong into finding customers. 

Hiring subcontractors can help fill gaps in your skill set for sure, especially for specialty trades like plumbing, electrical work, or HVAC services. But it doesn’t hurt to expand your know-how by getting into work you may have little or no experience in, such as carpentry, flooring, painting, drywalling, or window and door repairs. While pursuing expertise and certification as a plumber or electrician can take a significant amount of time, these other skills can be learned quicker, especially if you can find a general contractor who will hire you as a subcontractor or an apprentice while you’re taking courses and hands-on training at a college.

3. Licensing and certification

Depending on which province you live and work in, there may be steps you need to take to be legally licensed and certified as a general contractor or in a specialty trade. Compulsory trades like electricians or plumbers must be certified.

For example, in Ontario, Skilled Trades Ontario is the provincial agency that provides training programs and issues certificates of qualification for tradespeople and maintains a public register of people authorized to work in compulsory trades. 

4. Get insurance protection for your business

Get a customized renovation contractor insurance policy. A comprehensive policy will protect you from financial risk related to the work you do, including providing support if you are sued. 

A renovation contractor policy usually includes several coverages such as general liability (covers third-party bodily injury or damage claims), tools and equipment insurance (protects your tools if they’re stolen, vandalized, or damaged by fire or flooding), pollution liability (cover for third-party injuries or illnesses and cleanup costs resulting from you work), commercial auto (to protect your vehicle), and commercial property insurance (for your office and business contents). There may be other coverages you need to add to maximize your protection. Speak to a Zensurance broker to get their advice.

5. Promote your renovation business

You’ll need to create a website to promote your business online and establish a Google business profile, and you might want to look into using social media networks. You may also consider targeting your customers using Google or Facebook ads to extend your reach. Over time, you can build an email marketing list of former customers and prospects to keep in touch with them, continue to drive traffic to your website, and share your knowledge.

As you start, lean on friends, family, and others you know in the industry to help you by asking them to refer potential customers to you. Doing minor renovation jobs where you’ll charge less can help you build a customer base, sharpen your skills, and increase your visibility online by asking them to provide you with an online review. That leads to the next point.

6. Get customer referrals and Google reviews

Get referrals after completing a job by asking your customers to do two things: publish a positive review of your work on Google and let their friends know about your business. Despite all the internet provides, word-of-mouth referrals tend to be the top source of new business for self-employed professionals and startup businesses.

7. Establish industry relationships

Make a point of establishing and cultivating relationships with other contractors, tradespeople, and suppliers. You never know when you need their help or where your next project may come from, so networking with other industry professionals can make a significant difference as you grow your business.

Also, look for industry organizations you can join to expand your network of business contacts. For instance, you might want to become a member of the Canadian Home Builders’ Association, the Ontario Home Builders’ Association (if you’re in that province) and become an accredited RenoMark renovation contractor.

8. Manage your bids and operating budget

You don’t want to undervalue your work, but you also need to be competitive when providing a potential customer with an estimate for your services. 

It’ll take time to become proficient at giving reasonable estimates but start by getting the full scope of a project by working closely with your customer, then calculate your overhead costs and your profit margin. Be as accurate and transparent with them as possible. You don’t want to start a job, then realize you need to increase your estimate to avoid taking a loss. That’ll likely anger your customer and could prompt them to publish a negative online review of your business.

9. Monitor your cash flow

Effectively managing your cash flow will determine whether your business is profitable and successful. From purchasing materials to paying your subcontractors, you have to know your costs, how you’ll collect payment from your customers, and what to do if a customer doesn’t pay you what you’re owed (legal expense insurance helps with debt recovery). 

You may need to hire an accountant or bookkeeper to help you manage your finances, especially when filing taxes. If that isn’t doable in the early stages, you’ll need to be your own accountant and be responsible for balancing the books daily. 

Build Your Home Renovation Business on a Solid Foundation

Starting a home renovation business is an excellent endeavour with demand year-round. But make sure you protect your business and finances with a tailored insurance policy on which to base your company’s risk management plan.

That’s where we come in: Zensurance makes protecting your business quick, easy, and affordable. Fill out an online application for a free quote. We can help you get the coverage you need nailed down in no time.

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About the Author: Aharshan Thangarasa

Aharshan Thangarasa is a licensed commercial insurance broker and Team Lead, Contractors, at Zensurance.