How to Start a Custom Remodeling Business

by Danielle Bloom

4 min read

For skilled tradespeople, custom remodeling jobs present a unique business opportunity. Remodeling jobs happen in existing constructions, so you can often get by with less equipment and startup capital. By taking all of the legally required steps, you can ensure that your new company complies with Canadian tax code and construction regulations.

Write a Business Plan

Writing a business plan is the first step in starting a custom remodeling business. This document demonstrates a need for remodeling in your area, explains your company’s services, and communicates its competitive advantage over other construction companies in the area. For example, Edmonton-based Refine Renovations Ltd., focuses on hiring highly skilled workers to ensure top quality. The plan should also include:

  • Goals for growth
  • Financial projections based on market research
  • Marketing and advertising strategy
  • Equipment and operations plans

A business plan forces you to think through each aspect of starting a remodeling company, so you’re less likely to be caught off guard down the road. It also guides business decisions and serves as an operational road map. It’s easier to allocate your resources effectively if you put more research into your plan.

Determine Staffing Needs

A remodeling business involves much more than construction; you should also consider scheduling, accounting, administration, and marketing. Depending on your business plan, it may be necessary to hire additional staff to handle these functions, or you can outsource them. To determine which is a better investment, request quotes from an accountant and marketing agency. If you’re operating at a small scale, you may be able to handle administration and scheduling on your own. Then, compare those costs to the typical salary of a full-time or part-time assistant.

Finance and Register Your Company

Although remodeling businesses generally require less startup funding than a full-blown construction company, you’re likely to need some capital. Common financing options include business loans and government grants. Once you have secured funding, it’s time to register your business. If you plan to do small remodeling projects, a sole proprietorship is an ideal option. If you plan to hire staff any time in the future, however, consider a general partnership or incorporation. To register, you must have a location and address. The registration process varies by province and whether you intend to operate locally or across Canada. Contact your local ministry of government and consumer services for specifics. You must work with the Canada Revenue Agency to get a Business Number for tax purposes. This number is only necessary if you plan to hire staff or deal in imports and exports.

Determine Licencing Needs

Licencing requirements for custom remodeling businesses vary by province and city. In Ontario, you must obtain a Certificate of Qualification. In Quebec, you may required to secure a contractor’s licence, depending on the work you plan to complete. Check with your city’s municipal licencing and standards division to learn about local requirements.

Secure Equipment and Facilities

Starting a custom remodeling business gives you a certain level of flexibility. At a minimum, you must purchase the equipment for the types of projects you plan to pursue. If you want to remodel bathrooms, your equipment might be as simple as a tile cutter, spreaders, and a caulk gun. For more complex projects, such as custom cabinet installation or demolition, specific tools may be necessary. In addition, your company should have a vehicle that’s large enough to transport equipment and materials. The facility for your business depends on your growth plan and scope of work. Most remodeling projects take place offsite, so it’s possible to hire work-from-home staff and go without a building. If you plan to take on larger projects, however, an industrial facility provides space for material storage, vehicle storage, a workshop, and an office.

Building Vendor and Subcontractor Lists

Vendors are the businesses that supply the materials you need to complete each remodeling job. Before you start providing bids, it’s important to build a list of trusted, reliable vendors. Your list should include multiple vendors for each of your key supplies – that way, if one vendor runs out of a product, you have a backup source to prevent delays. A comprehensive list also enables you to present customers with multiple product and price options. The subcontractor list is similar, but it contains companies or individuals that can perform tasks that are outside of your expertise or that require additional equipment. If you specialize in custom tile jobs, for example, it’s helpful to have contacts at several plumbing companies. Ideally, you should have personal experience or a strong recommendation for each subcontractor on your list. At a minimum, you should be confident that the companies can provide quality work in a timely fashion.

Understand Job Pricing

Remodeling jobs are considerably more expensive than materials and labour. To turn a profit, it’s common to mark up your work by at least 50% above direct costs. This extra margin covers overhead costs for equipment, advertising, salaries, taxes, insurance, and more. If you have a facility and additional staff, you may need a higher markup. When in doubt, work with an accountant to get a clear picture of your financial situation and select a pricing structure that allows your business to grow. Once you have prices, you can start marketing your business and bidding for jobs. Opportunities for custom remodeling businesses exist in provinces and cities across Canada. By putting in the time to research, analyze, and plan, you can set yourself up for success.

References & Resources

Related Articles

A Guide to Small Business Office Remodeling

Your small business may have had to settle for less-than-luxurious office space…

Read more

Pros and Cons of Owning a Custom Remodeling Business

If you’re looking for a career change, a home remodeling business can…

Read more

How to Market a Custom Remodeling Business

Implementing a multifaceted marketing strategy is integral to the success of any…

Read more