What Are The Biggest Expenditures When Starting A Home Improvement Business?
If you want to start a home improvement business, you have good instincts. But you need to understand the finances of home improvement first. What are the biggest expenditures you can expect to pay when starting a home improvement business?
Why Start A Home Improvement Business?
Maybe you’re handy with hammer and nail gun. Maybe you really like creating something with your hands. Or maybe you just want to own your own business and are just looking for a growing industry. In any event, a home improvement business is a good business to start. Spurred by a combination of record high amounts of home equity, people being stuck at home, photo after photo on social media of beautiful kitchens, and other factors, demand for home remodeling has increased significantly.
What Are The Expenditures Associated With Starting A Home Improvement Business?
It’s clear to see from some of our other blogs that home improvement businesses are thriving, but what are some of the costs associated with starting a home improvement business? Let’s look at them one by one.
· Work Vehicle
If you don’t already have a work vehicle, you will need to buy one. You may be able to get away with using a personal vehicle for some time, but it will become more challenging as you bring samples to homes and are needing to transport tools for installation.
You need the right tools for the job. Screwdrivers and levels are pretty inexpensive. However, power tools like table saws are a bit more expensive. Tools do require a notable initial investment, but if you invest in good tools, you won’t have to spend much on them going forward.
· Supplies and Products
If you want to start a home improvement business, you need supplies that people want. If you’re installing new kitchen cabinets, you need good cabinets to install. Ultimately the client pays for these, so you don’t need to keep them in inventory, but you will want some samples to show clients. You can do this by buying a home improvement franchise from a successful franchisor that has good relationships with suppliers.
· Franchising Fee
Most home improvement franchisors charge an initial franchising fee plus a few other fees. In the grand scheme of things, these expenditures are minimal. If you buy the right home improvement franchise, you can make that money back easily.
· Marketing Costs
Marketing your home improvement business is essential if you want to get leads. In order to market effectively, you should have a strong website and digital presence as well as being active in the community through networking. In a franchise, the website and digital presence is built for you and your marketing budget can be optimized on advertising versus paying someone to build your marketing.
A showroom can be an advantageous thing to have for a home improvement business; but they’re not prerequisites for success. Most recently started home improvement businesses don’t have one. You can save money by working out of your home or a small office space.
· Total Initial Investment
Depending on variables such as where you are and how many employees you want to hire, typical start-up costs range from $90,000 to $120,000.