Covid-19 pandemic restrictions are easing, and many homeowners are getting busy with their jobs. This has led to the need to hire pros for home improvement projects. Many professionals have started home improvement companies. And with this boom, it may become challenging for your business to thrive. Here is how you should run your local home improvement company to be successful.
Understand the Industry Basics
You must understand the basics of the home improvement industry before running a local home improvement company. And one main thing you should master is to differentiate between remodeling and renovation. They are similar concepts but with differences that you must note to easily determine what kind of services to offer your customers.
Renovation focuses on repairing, updating, or restoring a space. For instance, if you perform a roof repair to address the leaking issue or to replace a missing shingle, that’s renovation. Updating a kitchen or a bathroom with new fixtures or appliances is also renovation. You can do renovation as one person because it doesn’t require much labor.
Remodeling consists of larger projects that alter the home’s structure. If you choose to offer remodeling services, you must work as a team of professionals. For example, you may get a contract from a homeowner to add a new room to their home. Another example is removing a wall separating the living room from the dining to form one room.
Another aspect of home improvement to note is the landscaping. There is hardscaping which consists of non-living landscape elements like stone, bricks, concrete, metal, etc. If a homeowner hires you to build a patio or design walkways along the yard, that’s hardscaping.
On the other hand, softscaping involves living elements like trees, flowers, grass, etc. So, if you plan to offer tree planting or tree removal service, that’s softscaping. In landscaping, you’ll require several professionals to complete both softscaping and hardscaping projects. For instance, you need arborists, masons, etc.
Level Up Your Skills
Unless you already have years of experience, starting a local home improvement company is not wise because you may lack the skills to manage it. Take a few years to build up your home renovation and remodeling skills before launching your business. For example, you can join a local company and work with them as you slowly gain experience.
Home improvement requires many different skills. As such, you may have to work with several companies to learn all these skills. Ideally, apply with a house cleaning company and learn the basics of organizing a house. Next, find companies that do roofing and painting, and learn their techniques as you gather skills.
You may also work with moving businesses and learn how to pack household items when moving. Gathering all these skills will give you a competitive advantage once you get into the market to offer services. Customers love contractors who can offer various services as a package because they give better rates.
Other fields you need to venture into and master skills are tiling, flooring, carpentry, plumbing, HVAC service, etc. Try your home renovation or remodeling job after working and developing skills with various companies. This will help you gauge your plumbing, electrical installation skills, etc.
Determine Your Goals
Setting up your goals before starting a local home improvement company will help determine what type of services to offer. Secondly, setting goals in this career field will help you identify what’s important to you. For instance, if you want to help local homeowners set up good yards for their homes, you must clearly understand how you’ll deliver these services.
Additionally, decide how you’ll get your customers and how many customers you need to serve weekly or monthly. This will motivate your team because you’ll have targets to work towards. As a person intending to venture into business, take time to make smart goals considering the following aspects:
- Goal – I want to start and grow a local home improvement company
- Specific – I will gain 5 new clients every week for my business
- Relevant – adding and retaining clients will help me grow my business and earn more income
- Measurable – I will measure my progress by keeping track of how many new clients I gain while maintaining my current client base
- Achievable – I must always have at least three clients in my schedule diary
Your goals in business must be specific, achievable, measurable, relevant, and time-bound to gain success. And when it comes to achieving goals, you must take action, set deadlines, have resources, be accountable, and review. Plan on alternative actions if you discover you are not on track.
Get the Necessary Documents
Each level of skill has its certification in all states. Certification will earn you the customers’ trust, allowing you to grow your business. As such, look for colleges and public institutions offering short-term hands-on training to get certified.
If you want to specialize in appliance repair or plumbing, complete the training process and get certified. Secondly, you need insurance coverage to avoid losses in your business. For instance, if the client’s property is damaged or a worker is injured during the contract, you may incur losses if you pay with your company money.
The first coverage you need is general liability insurance. This insurance protects your business from claims that it caused property damage, bodily injury, or personal injuries. Bodily injury to the client may include slip and fall during the operations. Property damage may be damage to certain items at the client’s home.
The second coverage you need is worker’s compensation. This insurance provides cash benefits or medical care to workers injured or who become ill at work. Cash benefits and medical care are catered for by the insurance carrier as directed by the Worker’s Compensation Board.
You may also need commercial auto insurance if you have vehicles in your company. This insurance protects your business against liability for damages caused by accidents involving your local home improvement company vehicle. Finally, you need commercial property coverage to protect your tools and equipment from fire, theft, and natural disasters.
Focus On Your Customers
Once you have started your local home improvement company, choose your easiest marketing options to reach customers online. Nowadays, creating a website and a social media profile is very easy. You can boost their reach with Google and Facebook ads.
Statista reports that over 4.26 billion people used social media in 2021. If you use better keywords, you’ll definitely get potential clients from these platforms. Websites can also get organic traffic if you choose the right keywords. A good example of a keyword is drain cleaning if you offer that particular service.
Besides the online presence, you must consider word-of-mouth marketing. These are referrals done by satisfied customers. Word of mouth is beneficial at the start because online platforms take time to rank and start generating leads. As such, maintain a strong relationship with your customers after offering them services.
When starting up, rely on your network to get customers. Most people get their first customers through relatives, friends, neighbors, or colleagues. Offer discounts or do first jobs at lower costs to attract customers as you sharpen your skills. After you develop a good network, ask them to leave positive reviews on your online platforms.
Finally, take photos before, during, and after the project with the client’s permission. Pictures will capture the attention of many and earn you more sales. You may also prepare short video clips because video marketing is embraced by 91% of businesses in 2023, as reported by Wyzowl.
Build Strong Industry Relationship
As a local home improvement company owner, industry relationships are vital for your business growth. Because this business involves many skills, the people you work with, like the subcontractors and the suppliers, will determine your success. Pulling the right professionals together will enable you to take jobs faster than your competitors.
For instance, if your client needs gutter install services with other services like yard improvement, you will call your gutter supplier quickly to learn the prices before you give a quote. Networking with professionals like wood, concrete, glass, and paint suppliers is excellent. This can be a great source of early referrals to grow your business.
Understand Your Rates and Give Good Estimates
As a local home improvement company owner, you must be proficient at estimating the costs and setting rates for each project. The first step is to have a reliable supplier and get to an agreement on various product prices. However, note there might be cost inflation, so set your rates wisely.
Many companies have an estimation department that can help set up the rates. But you can do it to save money because you don’t need to hire every professional. Do a detailed table itemizing of products and come up with the ideal charges. Remember to add your overhead and profit margins.
Make sure you work closely with the client to understand their needs before giving a quote. For example, if they need a garage door replacement, assess the garage door and determine which new items you’ll add. If you need 3 hinges, check on your supplier’s costs and do better calculations before giving a quote. Raising an estimate as the project gets underway upsets the clients and may ruin your reputation.
Manage Your Cash Flow
Your ability to manage the cash flow will determine your home improvement business success. Materials and labor may cost much, and you may find yourself in a difficult situation to pay your suppliers and subcontractors. As such, set aside enough cash to buy materials and pay your subcontractors on time.
You may choose to pay for the products on credit. But ensure you have some extra cash to pay the suppliers if the clients fail to pay on time. This will help you maintain a good relationship with the suppliers. Secondly, paying subcontractors on time motivates them.
The other solution for good cash flow management is to learn accounting basics. Secondly, establish a good relationship with your bank through a good credit score in case you need a quick loan. This will give you security and peace of mind knowing that your service delivery to the client won’t delay due to cash issues.
Protect Your Lien Rights
Lien rights refer to the legal authority to file a mechanics lien against your client’s property. For instance, if you were hired as countertop contractors and the homeowners delayed your payments, you can file a mechanics lien. It acts as a form of security to force the payment.
Lien right is important because as businesses get bigger, it becomes costly if customers default on their payments. This is because you need that money to keep other projects running. For instance, you may need that money to pay a supplier for goods you took on credit.
Once you get into the business, you’ll form good customer relationships. However, it doesn’t matter how much you trust your customers; always be prepared to file a mechanics lien to protect your business. A lien claim can prevent the owner from selling their property until they settle the issue with you.
Automate Your Processes
Using automation software at your local home improvement company can improve how you run your daily tasks. With the technology, the processes will be quicker and more accurate. This will enable you to track every process and finance in your company.
A good example of automation is the use of cloud-based payroll and invoices. You may also choose the right software to offer platforms where you can assign different professional roles and track their progress. This will enable easy management of the daily tasks. Examples of the software programs you can consider are:
With the help of reliable software, employees can communicate easily. This will be the best way to handle internal communications remotely. Employees can also share experiences verbally, in text, or in files with the newly recruited workers through this software.
Starting and running a local home improvement company is easier if you have the skills and take the time to set up your goals. Additionally, you must network with other professionals in the field and ensure you manage your cash flow well. Note your business might be at higher risk when it starts booming because a cash flow problem can sink it fast.