10 Tips when Starting a Remodeling Contractor Business

October 18, 2023

Starting a Business


Khaled Albadawi


Diwan Accounting & Tax

10 Tips when Starting a Remodeling Contractor Business

10 Keys on How to Start a Remodeling Company in 2022

First off, we are Diwan Tax and Accounting and we love helping small businesses and medium-size organizations as their outsourced controller, CFO, and outsourced accountant. If you are starting a construction business we have resources for you, and once you build momentum, we'd love to help you scale and grow your business in a tax efficient way that leads to large amounts of wealth for you and your family.

Best Practices for New Remodeling Contractors

We've come to realize that remodeling general contractors are a lot like us accountants in that they know how to do complex work but sometimes the overall business strategy is somewhat difficult. We pulled together from a number of experts 10 tips or critical keys when starting a remodeling company or becoming a design build renovation contractor.

Whether you just started as a general contractor doing kitchens, bathrooms, basement and other renovations, or even if you're an exterior Hardscape contractor, these tips will help you grow your company and should serve as a framework to grow and scale.

Problem #1 - Find your Crew & Sub Contractors

The first piece of advice that we have for people looking to start a remodeling company, is to start beating the bushes and building relationships with talented subcontractors in your area. One of the biggest problems in the trades right now is that there is a shortage of workers and there's simply not enough work for us to meet the demand.

Because there are so few construction workers available, and because it's a critical point in your operations, we recommend that you start off by establishing relationships with other general contractors, subcontractors and trade partners so that you are able to actually fill and get bids accordingly.

You don't have to have everything figured out, but you'll certainly benefit if you've done some work in building relationships with top performing subcontractors in your area so that once you get a project, you can actually build.

2 - Pick a Name and an Area of Focus

The second step is to establish your business name for your general contracting business.

How to choose a good name for your contracting business:

You’ll want to put some work into creating a good business name for your your remodeling business.  Don’t try to be overly clever, and make sure you spend enough time researching business names and competitors so that you don’t make things harder than they need to be. You'll also want to know that your business name is going to help your marketing efforts a great deal.

When choosing a name for your remodeling company, start searching your name in Google, so that you don’t create problems around “branded searches”.  A branded search is when someone uses Google to actually search your business name.

You should have a business name that’s short, clear, easy to remember and isn’t competing against any other large look-alike so that when someone sees your sign, truck or other remodeling marketing, and they search for your business via a “branded google search”, you’ll actually be able to rank and show up.

If you pick a business name that’s crowded by another large corporation or company, you’re going to struggle to show up above their website, their social profiles and all the other profiles across the internet.

Here’s a couple of simple tips when naming your contracting business

A – keep it short and sweet
B – make sure there's no competitors with a similar name that you'll have to compete against in Google
C - make sure you can get a short and clear URL for your website
D – ensure that it is distinctive
E - don’t worry about exact match keywords
F - create a title such as “New Spaces Design Build Remodeling” rather than just “New Spaces”

You can also think outside the box and put together colors, adjectives, tree names, animals, and synonyms together to create short and unique names.

I would also consider your last name.

If you use your last name, the company doesn’t stop with you!

Too many remodeling contractors think that their business name is going to limit them to being only about themselves and never being able to sell the company, which is definitely not the case. If you use your personal name or surname in your company title and Company naming structure, it does not limit you when you go to sell the organization.

In fact, last names and surnames are often some of the best and unique company names available, so we highly recommend considering them.

Choose an Area of Focus!

Should remodeling contractors choose a niche to focus on? What would be examples of niches for contractors to focus on?  Does a general contractor need to choose a niche?

We believe that Remodelers and general contractors should focus their marketing, messaging, and the building of credibility to one or two types of projects or niches.

Types of Niches for Remodelers and General Contractors:

Each niche you’ll use is a different “Core Commercial Keyword”.

Grab Google and check out the various companies that show up for these different niches or core search phrases.

  • Addition Builders
  • Kitchen Remodelers
  • Bathroom Remodelers
  • Basement Finishing
  • Exterior Home Remodeling
  • Siding Company
  • New Siding Company
  • Exterior Home Renovation
  • Home Renovation Contractors
  • Remodeling Companies
  • Remodeling Contractors
  • Design-Build Remodeling firms
  • Home Architects

Each of these are a bit of a niche right?

General contractor should probably work to build up one of these as their primary niche in order to build credibility. We will talk about this in a later step, but it's usually a good idea to pick one of these industry niches to focus on even if you are able to perform any type of work.

One of the problems that general contractors run into is that they are never known for a particular type of work, and they never stand out online or get recommended in various platforms because they just don't build credibility in any particular niche.

So we recommend that you pick a name, a domain name, and a couple of company niches.

Once you’ve done that, put together an official title for your company.

New Spaces Remodeling
Twin Cities Design-Build Remodeling Company.

Country Creek Builders
Lakeville Minnesota Design-Build Remodeler

Fredrickson Contracting

Fredrickson Masonry
Minneapolis Chimney Repair & Exterior Stone Masonry

You’ll want to establish a full title not for legal reasons, but so that when you’re writing your name across the internet, you can distinguish the immediate “who, what, where” in order to be clear.

When it comes to company name, marketing and everything for your business, clarity is the most important factor.

3 - Get Your General Contractors License

In order to start a remodeling business, you’re going to need to get your contractors license.  We’ve written a step by step guide on how to get your Washington State General Contractors license, and there are many resources for other states.

You’ll need your General Contractors license to do remodeling, and you’ll also need to put the license number throughout your company collateral, trucks, marketing and website.

Make sure you’re obeying the laws, and you’ll also need to check out insurance and bonding as part of this process.

Talk to a couple of independent insurance brokers that specialize in construction insurance, you can even check out Next Insurance, which markets heavily to contractors and small businesses, but as part of this process you’ll want to figure out your liability insurance, and other insurance.

Intertwined with getting your contractors license is the next step of registering with the state and setting up your LLC or business entity.

4 - Setup an LLC & Register with the State

You’ll want to head to the Secretary of State, and register your business.  This is a major part of setting up your “LLC” in your state.

You can head over to Legal Zoom to get help setting up your paperwork for your Limited Liability Corporation, or talk to a local small business startup attorney to get your paperwork.

5 - Market Your Business

We would recommend connecting with Feedbackwrench to get your business website, messaging, and advertising setup.  

You’ll want to do a couple of things for the sales and marketing of your remodeling business.

The basics of Marketing for a Remodeling Company:

  • Establish Branding - colors, typography & logos
  • Develop Core Messaging - you need to clarify your message, identify your core customer & write in order to attract them to your business
  • Gather Imagery & Projects - You need to show that you’re actually credible in what you’re doing.  You MUST get some professional and illustrative photos of your work
  • Build a Website - You should have a website that will serve as your sleepless sales person
  • Establish a Marketing Plan - You’ll want to develop a simple roadmap of how you’ll get new clients
  • Sales & Prospecting - You’ll want to commit to front end activity that will keep referrals, local clients and opportunities coming your way
  • Digital Marketing Plan - You can tap into paid search ads, Facebook ads, and other types of digital like Youtube & Tik Tok Ads

Call other Contractors

Another major opportunity to get work is to help companies that are already really busy.

When you’re starting your remodeling business, you can also approach larger, more credible contractors and propose to them that you would take their smaller jobs that they’re not interested in completing.

Most successful Remodelers that have established themselves as the more dominant player are turning down mid to lower level remodeling projects all the time, and these can be perfect simple jobs when you're starting out.

It might seem counterintuitive to help someone else build up their business, but we recommend viewing it as a way to build up your credibility & authority, capturing google reviews and completed progress that you can use in your future marketing efforts.

When you have more time than cash, it’s usually a wise and humble move to simply find someone who can feed your company, so maybe reach out and serve as a sub contractor on any portion of a project you really like, such as finishing carpenter, tile, or even flooring and windows.

The principle is that you shouldn’t stand still waiting for a lead to come, you should do the front end activity that gets you a deal.

What front end prospecting and sales activities work for Contractors:

1 - Home Shows
2 - Regional Housing Shows
3 - Events such as Remodeling Seminars
4 -Virtual Classes on How to Remodel
5 -Videos of you teaching about how to remodel well
6 - Sales calls to other contractors
7 - Door knocking & networking

Home and garden shows seem to be the most productive activity, and the regional remodeler & builder open houses in the spring and fall can really be hot as you can piggy back off of the marketing efforts of the event itself.  

Home & Garden shows can be fruitful, but you need to have a really good roadmap to get people to opt in and get them to actually start a conversation with you.

6 - Start Building Credibility & Increase Scope of Projects

After talking to many contractors about what they did to succeed, they almost all mention that they grew their remodeling company by scaling up over time.

You might be able to handle a huge project right off the bat, but that doesn’t mean it’s really a productive idea for you to do that.

The more projects you complete successfully, the more reviews & photos you have to show off.

The photos of your work & customer reviews are really the new form of referrals, so it’s the way you’re going to get going.

Remodeling Contractors that scale in a consistent way, over time, know that it’s all about setting great expectations, and then following through above those expectations.

Missing expectations usually starts by being too aggressive on the size, scope or frequency of projects, which leads to reputation ruining change orders, mistakes, and unhappy customers.

Your goal should be to continuously build up a resume of amazing remodels and projects so you can show that credibility off.

Besides showing off the projects, this credibility building period also allows you to learn your bidding software, design software, your processes and build up your team.

The success of a remodeling project is the result of excellent planning, project management and pro-active design and build.

As you complete more projects, you’ll grow in confidence.

You’ll eventually find yourself able to attract and close bigger clients as you build up credibility because you’re also building up your own self-confidence.

7 - Prune Your Clientele and Increase Margins

Eventually, you’ll want to start working on larger remodeling projects because they’ll lead to higher margins.

Once you’ve done this, you’ll want to be sure to dramatically increase your marketing efforts, particularly your digital marketing, events, and remarketing efforts so that a larger volume of leads come through, which is what’s required to find the bigger projects

How do you find larger remodeling projects?

  • Get more reviews than everyone else
  • Show off your work digitally
  • Go to the home shows
  • Build relationships with architects
  • Digital Marketing & remarketing

8 - Carefully Scale & Build Reserves

As you increase the size of project, it’s also important to avoid hubris - don’t get huge for the sake of getting huge.

General Contractor and remodeler Dan D. Of Country Creek Builders in Minneapolis recommends that contractors take time to build up cash reserves and prepare for downturns so that they remain flexible when markets change.

It’s not a matter of “if” there will be a housing and economic downturn, it’s simply “when.”

As you scale your project scope, be sure to keep building up reviews & project examples and share them over and over on social media.

We want your community to see you as the leading remodeler in the area, and reviews and a long line of project examples are what will get you there.

9 - Get a Tax Plan & Wealth Plan in Place

The moment you’re making net profits above $70,000 a year, your contracting business needs to start talking with a tax reduction planner & strategist.

You can dramatically reduce the annual tax burden of a general contractor and remodeling company if you implement pro-active tax reduction planning.

In fact, if you’re not careful about your planning, you’ll see taxes rise as the largest expense of your remodeling business.

Contractors that get pro-active tax planning from a tax strategist, and those that have rock-solid accounting from their accountant, are poised to build more profitable and scalable operations.

Tax Strategies to Consider:

  • S-Corporations
  • Retirement Plans
  • Hiring Your Kids
  • Buying a Piece of Rental Real Estate
  • Section 179 & Depreciation
  • Home Office & Vehicle Straggles
  • Income Shifting

These can help you lower your taxes in the current year, but remodeling contractors can also lower their taxes throughout their lifetime by building up subsidiary companies, looking into trusts, and carefully considering estate and insurance planning.

Estate planning & utilizing a trust can be very helpful to many company owners, so that if they die or a shareholder passes away, their family has clear direction and options to continue the operation of the business.

Besides lowering taxes & playing defense, it’s important to build a tax diversified portfolio of assets.

We recommend that you consider investing in the stock market, utilizing the tax code to use things like Solo-401k’s and even defined benefit plans.

If you have employees, you can build out significant retirement plans for your team & even provide benefits or fringe benefits, that are often a very tax effective form of compensation as they are direct write offs in the business.

In short, you’ll want to build up various asset classes & build up a diversified portfolio of investments.

You want diverse sources of wealth & tax diversification.

You’ll want stocks that are wrapped in various tax qualified plans like Roth, Deductible and regular taxable accounts.

You might want to invest in various asset classes like bonds, stocks, preferred stocks & REITs.

You might want to have your business, with real estate, with stocks & even lend out money.

The bottom line is that as you grow, you should have a wealth and tax plan in place, so that you can keep the fruits of your labor throughout your lifetime, or so you can keep as little of it out of the government’s hands and place it in your family, charities and people you’d support.

10 - Invest in Market Dominance

Last, your company will continue to swell in dominance as you build up your marketing footprint, as well as build up a team of people around you.

Leadership and management is what will lead to a business that works without you.

Every business owner we know, would like their business to truly run without them, so that they can participate out of passion rather than necessity.

If you want to build a business that dominates competitors, as well as something that runs smoothly without you, it’s all about people, systems & leadership.

The book the “E-Myth”, “Built to Sell” and “Traction” are all really helpful pieces to get you in a mindset to build out a company that runs on it’s own.

The goal is to build systems & empower people to run it, similar to a franchise.

It’s far easier to say, and much harder to do.

We’ll leave that for a later topic.


We’d love to help your construction business with taxes, accounting & bookkeeping, and just book a consultation if you’re a larger contractor looking for an accounting firm!


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