If you’re hoping to escape your current day job and find yourself skilled at DIY tasks, a renovation business could be the perfect sector to deliver on your creative abilities. Starting a business in this division doesn’t require you to obtain any particular qualifications or pass a surplus of exams, making it ideal for those who just want to jump in feet first and do a good job.
You can cover starting costs by considering a business loan, particularly if you plan to hire others to help you with your new venture. Alternatively, you could work another job alongside running your business during its initial stages.
To help you devise your business plan, we’ve supplied a step-by-step guide to ensure your home renovation company becomes a success.
How do you establish a legal entity?
Before any work commences, you initially need to form a legal entity, which will be the official company that you conduct your work through. There are a few options that you can choose between, which include:
- Sole trader – You run your business as an individual and are essentially self-employed. You may keep the profits from your business once tax has been paid but are personally responsible for any losses that incur.
- Limited Liability Company – A limited company is limited by ‘shares’ or by ‘guarantee’. Companies limited by shares typically make a profit and are a separate legal entity from the people who run it. Those limited by guarantee are normally not for profit, have guarantors and any money made is re-invested.
- Partnership – You and a partner both share the responsibility for the business including any bills, losses and taxes. A limited company can also be classed as a partner.
Once you’ve decided on what the best option is for your business, you then need to register with the relevant government bodies and open a bank account in your business’ name.
What licenses do you need?
Depending on the nature of your business, you’ll need to apply for certain licenses, insurance and certificates. Home renovation and construction businesses will typically require specific licenses. For example, any business working with gas appliances will need to be registered with Gas Safe.
Insurance is also important should you or an employee become injured as a result of your work, or if a client’s home becomes damaged. This is normally covered in general liability insurance. You will also need workers’ compensation to cover any employees should they get hurt on the job.
What will you offer to clients?
It’s impossible to know everything about renovating homes and, unless you already have years of experience under your belt, it’s not manageable to start overseeing large home renovation projects from the outset. You may specialise in certain areas and subcontract out other jobs to skilled plumbers and electricians, for example.
Focusing on your skills and what you excel at is vital to offering the best possible service to customers, especially if there is competition in your area. Remember, customers talk and word-of-mouth can make or break your business. Also, see if there are any gaps in the market – are there any services that your competitors aren’t offering and you could?