Starting a home remodeling and construction business can be a difficult undertaking, especially without prior business experience. Although having business management experience can be very helpful, it’s not necessary in order to run a successful home remodeling or construction business. What matters most is the desire to prosper and the perseverance it will take in order to do so.
Before opening a home remodeling or construction business, you must obtain a registered retail merchant certificate from the Department of Revenue in your state. A registered retail merchant certificate shows that a business is authorized by law to collect sales tax in their state. This required certificate must be displayed for public view at all times.
Most people starting a home remodeling or construction business begin with a home office. This is a good way to get started since doing so reduces overhead costs considerably. Couples often take on this endeavor together. If you decide to run an office from your home, it’s important to keep the business separate from personal family life. Set business hours as you would if you had a commercial office. Have a phone line designated for business use only. When the office is closed be sure to let your answering machine take all the calls.
Taking business calls all hours of the day or night will no doubt become too overwhelming and stressful. You wouldn’t bother a retail store manager or another business person at his or her home, but customers often forget their good manners regarding contacting building contractors at home during unreasonable hours. Record a message on the home answering machine that politely relays a message making it clear that the calls of friends and family will be returned. Business calls should be referred politely to the business line.
A business office is a good thing to consider when a home remodeling and construction business becomes more established. Depending on the location of an office, rent can be quite expensive. You also need to consider the extra cost of paying office employees before opening a commercial office. Obviously, the more employees you have to pay, the less the company will profit. There are costs to consider other than weekly paychecks. You also need to consider the cost of accident insurance as well as workman’s compensation insurance. These necessary expenses are often the downfall of a new business.
If your home remodeling and construction business are financially well-established, having an office more than likely will bring in customers that otherwise might not find your business. You will gain much-needed exposure as long as the office is in a good location. Having an office in a more populated area will no doubt cost more initially, but it will pay off in the long run. An office located in a deprived area naturally won’t bring in as much business.
Your office should reflect the quality of the work you do. Maintaining a clean and attractive office building shows that you care about the business and your customers. It’s an expression of who you are as a business and as an individual. If your office is dirty and disheveled, potential clients will more than likely think your work will be of equal quality. Make any necessary changes and repairs to bring the office up to standards that reflect your work.
Keep records of everything in an organized filing system. You need to keep receipts for all business expenses as well as all employee records, vehicle records, bank statements, insurance statements and receipts, building material receipts, and tax papers. You also need to keep past as well as current job proposals. Proper organization is the key to accuracy, and you’ll be able to quickly and easily locate important papers.
Don’t underbid your jobs. Although you might think you’re likely to secure more jobs by offering the lowest prices, keep in mind that people don’t always go with the lowest bidder. Keep your prices fair but competitive. Bid too low and you might end up eating the cost of a job if all doesn’t go smooth.
When figuring the cost of a job, make a list of required materials. Estimate on the high end to cover the cost of all materials required to complete the project. You also need to figure the cost of labor involved. Decide on the hourly rate you need to charge according to the number of employees it will take to complete the work and make a profit. Don’t forget about travel time and fuel when formulating a bid. Estimate the hours necessary to complete the job, and multiply that by the hourly fee you have determined. Always estimate these figures slightly high to make sure your expenses are covered. You need to count on unforeseen time-consuming problems that can occur during a job, but you also have to keep the proposed costs competitive.
Proposal sheets for your home remodeling and construction business should include spaces for listing customer contact information, your business contact information, and an area to list specifications and estimates for potential jobs.
Protect yourself by including a disclaimer on your proposal sheets. An example disclaimer is as follows. All materials are promised to be as specified. All labor will be completed professionally and according to standard practice. Deviation from the proposed specifications that generate extra cost will be completed after amending the proposal. This may result in additional charges. This agreement is contingent on accidents, delays beyond our control, and strikes. Homeowners are to carry tornado, fire, and any other insurance necessary to financially protect the structure. Our company employees are fully covered by Workman’s Compensation insurance. A $40.00 charge will be added to returned checks as well as any court costs or lawyer fees. Building permits are the responsibility of the homeowner. The word “estimate” means the “estimated price”, not the actual cost to complete the job.
Liability insurance is a must for any business owner. This necessary insurance will protect you financially from accident claims submitted by customers as well as employees. Liability insurance should cover your company vehicles, business office, and any other location used by your company.
Running a business of any kind is going to have its ups and downs. There will be difficult situations that may seem impossible to overcome, but with the right attitude and determination, you can survive. Whenever possible, set funds aside to make it through times when jobs are unavailable. In the construction business, winter is the most financially difficult time of year, but with a realistic plan and the right attitude you can be a successful home remodeling and construction business owner.Running a business