renovation business plan pdf

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Here is a free business plan sample for a home renovation company.

Embarking on a home renovation business can be an exciting venture, but knowing where to start can be overwhelming.

In the content that follows, we will present you with a comprehensive sample business plan tailored for a home renovation company.

As any seasoned entrepreneur will tell you, a detailed business plan is crucial for laying the foundation of a successful business. It serves as a roadmap, guiding you through setting clear objectives, strategies, and financial projections.

To jumpstart your planning process with ease and precision, you're invited to utilize our home renovation business plan template. Additionally, our team is available to provide a free review and refinement of your plan to ensure it's polished and professional.

How to draft a great business plan for your home renovation company?

A good business plan for a home renovation business must be tailored to the unique aspects of the renovation industry.

Initially, it's crucial to provide a comprehensive overview of the home renovation market. This should include current statistics and an analysis of emerging trends, similar to what we've outlined in our home renovation business plan template .

Your business plan should articulate your vision clearly. Define your target market (homeowners, real estate investors, property managers, etc.), and establish your business's unique selling proposition (eco-friendly renovations, luxury upgrades, budget-friendly remodels, etc.).

Market analysis is a key component. You need to understand the local demand for renovation services, identify your competitors, and know the preferences and behaviors of potential clients.

For a home renovation business, it's important to detail the services you offer. Whether it's kitchen and bathroom remodels, whole-house renovations, or specialized services like historic restorations, explain how these services cater to the needs of your clientele.

The operational plan should outline the logistics of your business. This includes the location of your headquarters, the structure of your project management, sourcing of materials, and the details of your service delivery process.

Emphasize the quality of workmanship, the reliability of your subcontractors, and adherence to building codes and safety standards.

Discuss your marketing and sales strategies. How will you generate leads and maintain a steady stream of projects? Consider advertising methods, customer referral programs, and strategies for upselling services.

Incorporating digital strategies, such as a professional website, online portfolio, and social media engagement, is increasingly important for reaching today's homeowners.

The financial section is vital. It should include your startup costs, revenue projections, operating expenses, and the point at which you expect to break even.

Home renovation projects can vary greatly in size and profitability, so it's essential to have a detailed financial plan. You can refer to our financial forecast for a home renovation business for guidance.

Compared to other business plans, a home renovation plan must address specific challenges such as project management, regulatory compliance, and the potential for unforeseen issues during renovations.

A well-crafted business plan will not only help you define your strategy and approach but also prove invaluable when seeking investment or loans.

Lenders and investors will look for a thorough market analysis, realistic financial projections, and a clear plan for managing renovation projects effectively.

By presenting a comprehensive and substantiated business plan, you showcase your professionalism and dedication to the success of your home renovation business.

To streamline the process and ensure you cover all necessary elements, you can start with our home renovation business plan template .

A free example of business plan for a home renovation company

Here, we will provide a concise and illustrative example of a business plan for a specific project.

This example aims to provide an overview of the essential components of a business plan. It is important to note that this version is only a summary. As it stands, this business plan is not sufficiently developed to support a profitability strategy or convince a bank to provide financing.

To be effective, the business plan should be significantly more detailed, including up-to-date market data, more persuasive arguments, a thorough market study, a three-year action plan, as well as detailed financial tables such as a projected income statement, projected balance sheet, cash flow budget, and break-even analysis.

All these elements have been thoroughly included by our experts in the business plan template they have designed for a home renovation .

Here, we will follow the same structure as in our business plan template.

Market Opportunity

Market analysis and projections.

The home renovation industry is a robust and ever-evolving market with significant growth potential.

Recent studies have shown that the global home improvement sector is projected to reach a value of over $1,000 billion by the next few years. This growth is driven by a rising trend in home ownership and the increasing interest in personalizing living spaces.

In the United States, there are over 500,000 businesses operating in the home renovation industry, generating an annual revenue of approximately $450 billion. This underscores the critical role home renovation services play in the American economy and the housing market.

These statistics highlight the vast opportunities available for businesses within the home renovation sector.

Industry Trends

The home renovation market is witnessing several key trends that are shaping the future of the industry.

Smart home technology integration is becoming increasingly popular, with homeowners looking to enhance convenience and energy efficiency through automated systems and intelligent devices.

Eco-friendly and sustainable home improvements are also on the rise, as consumers become more environmentally conscious and seek out green materials and renewable energy solutions.

There is a growing demand for multi-functional spaces and flexible design, reflecting the need for homes to adapt to remote work and changing family dynamics.

Additionally, the DIY movement continues to flourish, supported by online tutorials and the availability of home improvement tools and materials. However, for more complex projects, professional renovation services are still in high demand.

Online platforms and mobile applications are streamlining the way homeowners find and engage with renovation professionals, making the process more accessible and transparent.

These trends indicate a shift in homeowner preferences and priorities, which home renovation businesses must consider to stay competitive and relevant.

Key Success Factors

Several factors contribute to the success of a home renovation business.

Quality of workmanship is paramount. A company that consistently delivers high-quality renovations will build a strong reputation and a base of repeat customers.

Innovation in design and the ability to offer customized solutions can set a business apart in a crowded market.

Location and accessibility are important, as a local presence can influence homeowners' choice of renovation service providers.

Exceptional customer service is essential for ensuring client satisfaction and fostering positive word-of-mouth referrals.

Lastly, effective project management, competitive pricing, and the ability to incorporate sustainable practices are crucial for the long-term viability and profitability of a home renovation business.

The Project

Project presentation.

Our home renovation business is designed to cater to the increasing number of homeowners looking to enhance their living spaces. Situated in a region with a booming real estate market, our service will offer comprehensive home renovation solutions, from kitchen and bathroom remodels to full home makeovers, all executed with top-notch craftsmanship and high-quality materials.

We will focus on creating functional, modern, and aesthetically pleasing spaces that reflect the unique style and needs of each homeowner. Our renovations will not only improve the visual appeal of a home but also its market value and energy efficiency.

Our home renovation business aims to set the standard for quality and customer satisfaction in the local market, transforming houses into dream homes and thereby improving the quality of life for our clients.

Value Proposition

The value proposition of our home renovation business is centered on delivering personalized and high-quality home transformations that cater to the specific desires and requirements of homeowners.

Our commitment to reliability, craftsmanship, and attention to detail ensures that every project we undertake enhances the functionality and beauty of the home, providing a tangible improvement to the homeowner's quality of life.

We are dedicated to fostering long-term relationships with our clients by providing exceptional service and transparent communication throughout the renovation process, and we aim to educate our customers on the best practices for maintaining and enhancing their newly renovated spaces.

As a trusted partner in home improvement, we strive to be a cornerstone in the community, offering a reliable and professional service that homeowners can depend on to turn their renovation dreams into reality.

Project Owner

The project owner is a seasoned professional with a passion for home improvement and a keen eye for design.

With years of experience in the construction and renovation industry, he possesses the technical knowledge and leadership skills necessary to deliver projects that exceed expectations. His expertise extends to project management, interior design, and sustainable building practices.

Driven by a vision of transforming living spaces into personalized sanctuaries, he is committed to using his skills to enhance the comfort and satisfaction of homeowners. His dedication to quality and his zeal for innovation make him the driving force behind this venture, aiming to elevate the standard of living for those seeking to renovate their homes.

The Market Study

Target market.

The target market for our home renovation business encompasses a variety of homeowners.

Firstly, we cater to homeowners looking to update or modernize their living spaces to enhance comfort, functionality, or aesthetic appeal.

Secondly, we serve individuals preparing to sell their homes who wish to increase property value through strategic renovations.

Additionally, our services are sought after by new homeowners desiring to personalize newly purchased properties to suit their tastes.

Lastly, real estate investors and property managers represent a significant segment, as they often require renovations to maintain or improve their rental or sale properties.

SWOT Analysis

Our SWOT analysis for the home renovation business highlights several factors.

Strengths include a skilled team with extensive renovation experience, a strong network of suppliers, and a reputation for reliability and high-quality workmanship.

Weaknesses may involve the cyclical nature of the housing market and the dependency on economic conditions that influence homeowners' renovation investments.

Opportunities can be found in the growing trend of home improvement and the potential for green renovations that appeal to environmentally conscious consumers.

Threats include the intense competition from other renovation companies and the potential for supply chain disruptions affecting material availability and costs.

Competitor Analysis

Our analysis of competitors within the home renovation industry indicates a competitive landscape.

Direct competitors range from other local renovation businesses to larger contracting firms and specialized service providers.

These competitors vie for homeowners' attention by offering various services, from full-scale remodels to specific upgrades like kitchen or bathroom renovations.

Competitive edges may be gained through superior craftsmanship, customer service, turnaround times, and the ability to provide comprehensive solutions from design to execution.

Understanding the strengths and weaknesses of these competitors is crucial for carving out a niche and ensuring customer loyalty.

Competitive Advantages

Our home renovation business prides itself on a customer-centric approach, ensuring that each project is tailored to the homeowner's specific needs and vision.

We offer a wide range of renovation services, from simple cosmetic updates to complex structural changes, all executed with meticulous attention to detail.

Our dedication to sustainability and energy-efficient options sets us apart, as we provide innovative solutions that benefit both the environment and our clients' long-term expenses.

Transparency in pricing, timelines, and project management processes fosters trust and reassures our clients that their home is in capable hands.

You can also read our articles about: - how to launch a home renovation business: a complete guide - the customer segments of a home renovation company - the competition study for a home renovation company

The Strategy

Development plan.

Our three-year development plan for the home renovation company is designed to establish us as a leader in the industry.

In the first year, we will concentrate on building a strong reputation in our local area through exceptional workmanship and customer service.

The second year will be focused on expanding our services to neighboring regions and increasing our service offerings to include eco-friendly and smart home solutions.

In the third year, we aim to form strategic alliances with real estate firms and architects to offer comprehensive renovation packages and further solidify our market position.

Throughout this period, we will remain dedicated to using sustainable materials, maintaining transparent communication with clients, and staying abreast of the latest industry trends and technologies.

Business Model Canvas

The Business Model Canvas for our home renovation company targets homeowners looking for reliable, high-quality renovation services.

Our value proposition is centered on delivering personalized renovation solutions that enhance the comfort, functionality, and value of our clients' homes.

We offer our services through direct consultations and digital platforms, utilizing our skilled workforce and project management expertise as key resources.

Key activities include project design, construction management, and client relations.

Our revenue streams are generated from the provision of renovation services, while our costs are mainly associated with labor, materials, and marketing efforts.

Access a detailed and customizable Business Model Canvas in our business plan template .

Marketing Strategy

Our marketing strategy is centered on building trust and showcasing our expertise.

We plan to engage with potential clients through home renovation workshops, before-and-after showcases, and testimonials from satisfied customers.

We will also develop partnerships with suppliers of high-quality materials to offer exclusive deals and promotions.

Our online presence will be strengthened through social media, SEO, and influencer collaborations to reach a wider audience and demonstrate our renovation successes.

Risk Policy

The risk policy for our home renovation company is designed to mitigate risks associated with construction projects, client satisfaction, and workplace safety.

We adhere to strict building codes and safety regulations, ensuring all projects are compliant and our team is well-trained in safety protocols.

Quality control checks are conducted at key project milestones to ensure standards are met. We also implement a careful financial management strategy to prevent budget overruns.

Comprehensive insurance coverage is maintained to protect against potential liabilities. Our focus is on delivering safe, high-quality renovation services that exceed client expectations.

Why Our Project is Viable

We are committed to establishing a home renovation company that stands out for its quality, reliability, and innovative solutions.

With a growing market for home improvements and our dedication to customer satisfaction, we are poised for success in the competitive renovation industry.

We are enthusiastic about transforming living spaces and enhancing the lifestyles of our clients while building a sustainable and profitable business.

We are adaptable to market demands and client needs, and we are excited about the future prospects of our home renovation company.

You can also read our articles about: - the Business Model Canvas of a home renovation company - the marketing strategy for a home renovation company

The Financial Plan

Of course, the text presented below is far from sufficient to serve as a solid and credible financial analysis for a bank or potential investor. They expect specific numbers, financial statements, and charts demonstrating the profitability of your project.

All these elements are available in our business plan template for a home renovation and our financial plan for a home renovation .

Initial expenses for our home renovation business include acquiring essential tools and equipment, obtaining the necessary licenses and insurance, setting up a workspace or office, purchasing a reliable work vehicle, and investing in marketing to establish our brand presence. We will also allocate funds for skilled labor, either by hiring employees or subcontractors, and for training to ensure compliance with the latest building codes and regulations.

Our revenue assumptions are based on a thorough market analysis of the local demand for home renovation services, taking into account the current trends in home improvement and the potential for high-quality, sustainable renovation options.

We anticipate a steady increase in client projects, starting with smaller renovations and gradually taking on larger, more complex jobs as our reputation for quality workmanship and reliability grows.

The projected income statement outlines expected revenues from our renovation services, direct costs (materials, labor, subcontractor fees), and operating expenses (office rent, marketing, insurance, vehicle maintenance, etc.).

This results in a forecasted net profit that is essential for assessing the long-term viability of our home renovation business.

The projected balance sheet will display assets such as tools, equipment, and any real estate owned by the business, along with liabilities including loans and accounts payable.

It will provide a snapshot of the company's financial standing at the end of each fiscal period.

Our projected cash flow statement will detail the cash inflows from client payments and outflows for expenses like materials and wages. This financial tool is crucial for ensuring we maintain adequate cash reserves to fund ongoing operations and growth initiatives.

The projected financing plan will identify the sources of capital we intend to tap into for covering our initial outlay, such as bank loans, lines of credit, or investor funding.

We will closely monitor the working capital requirement to ensure we have sufficient funds on hand to cover day-to-day expenses, such as purchasing materials, paying workers, and managing inventory.

The break-even analysis will determine the volume of renovation contracts we need to secure to cover all our costs, including the initial investment, and to start generating profits.

It will signal the point at which our business becomes financially sustainable.

Key performance indicators we will track include the gross margin on our renovation services, the current ratio to evaluate our short-term financial resilience, and the return on investment to gauge the efficiency of the capital we have deployed into the business.

These metrics will assist us in measuring the financial health and success of our home renovation enterprise.

If you want to know more about the financial analysis of this type of activity, please read our article about the financial plan for a home renovation company .

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Remodeling Business Plan Template

Written by Dave Lavinsky

Remodeling Business Plan

Over the past 20+ years, we have helped over 1,000 entrepreneurs and business owners create business plans to start and grow their remodeling businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a business plan template step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is a Remodeling Business Plan?

A business plan provides a snapshot of your remodeling business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for a Remodeling Company

If you’re looking to start a Remodeling business, or grow your business, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your remodeling business in order to improve your chances of success. Your business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Remodeling Businesses

With regards to funding, the main sources of funding for a remodeling business are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for remodeling businesses.

Finish Your Business Plan Today!

How to write a business plan for a remodeling company.

If you want to start a remodeling business or expand your current one, you need a business plan. Below we describe what should be included in each section of a business plan for your remodeling company:

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of remodeling business you are operating and the status. For example, are you a startup, do you want to grow your business, or are you operating remodeling businesses in multiple markets?

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the remodeling industry. Discuss the type of remodeling business you are operating. Detail your direct competitors. Give an overview of your target market. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.  

Company Analysis

In your company analysis, you will detail the type of remodeling company you are operating.

For example, you might operate one of the following types of remodeling businesses:

• Residential Remodeling : this type of remodeling business focuses on renovations strictly for home-based projects, such as kitchens and bathrooms.
• Design-Build and Whole House Remodeling: this type of remodeling are residential general contractors that are responsible for the architecture, design, and construction management of major home remodeling projects.
• Restoration: Restoration contractors specialize in working with insurance companies, and focus specifically on fire, wind, or water damage to restore the home to its original condition before the occurrence.

In addition to explaining the type of remodeling company you will operate, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to question such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of projects completed, number of positive reviews, etc.
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry analysis, you need to provide an overview of the Remodeling industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the remodeling industry educates you. It helps you understand the market in which you are operating. 

Secondly, market research can improve your strategy, particularly if your research identifies market trends.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your remodeling company business plan:

• How big is the remodeling industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your remodeling company? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: homeowners looking to add on or update their home, those who have suffered a recent weather damage occurrence, and new homeowners who have purchased an older home that is in need of updates.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of remodeling company you operate. Clearly, homeowners would respond to different marketing promotions than help those affected by weather-related incidents, for example.

Try to break out your target market in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve.

Psychographic profiles explain the wants and needs of your target market. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.

Finish Your Remodeling Business Plan in 1 Day!

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other remodeling businesses. 

Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes new home builders and large construction general contractors. You need to mention such competition as well.

With regards to direct competition, you want to describe the other remodeling businesses with which you compete. Most likely, your direct competitors will be remodeling businesses located very close to your location.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of customers do they serve?
• What type of remodeling businesses are they?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide shorter project times?
• Will you provide services that your competitors don’t offer?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a remodeling company, your marketing plan should include the following:

Product : In the product section, you should reiterate the type of remodeling company that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to temodeling, will you provide call design and architecture, project management, and any other services?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the services you offer and their prices.

Place : Place refers to the location of your remodeling company. Document your location and mention how the location will impact your success. For example, is your remodeling business located in a high traffic area, a business district, a standalone office, etc. Discuss how your location might be the ideal location for your customers.

Promotions : The final part of your Remodeling marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Advertising in local papers and magazines
• Reaching out to websites 
• Social media marketing
• Local radio advertising

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your remodeling business, including offering free remodeling quotes, sourcing materials and labor, organizing subcontractors, client communication, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to land your Xth client, or when you hope to reach $X in revenue. It could also be when you expect to expand your remodeling business to a new city.  

Management Team

To demonstrate your remodeling business’ ability to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company. 

Ideally you and/or your team members have direct experience in managing remodelings. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your management team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a remodeling businesses or successfully running a construction company.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement : an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you take on one new client at a time or multiple new clients ? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets : Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your Remodeling business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. 

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing your business:

• Cost of contracting licenses and permitting.
• Cost of equipment and supplies.
• Payroll or salaries paid to staff and subcontractors .
• Business insurance
• Taxes and permits
• Legal expenses

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include past remodeling projects or project quotes of client projects you are working on.  

Putting together a business plan for your remodeling business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the remodeling industry, your competition, and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful remodeling business.  

Don’t you wish there was a faster, easier way to finish your Remodeling business plan?

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to see how Growthink’s professional business plan consulting services can create your business plan for you.

Other Helpful Business Plan Articles & Templates

Kitchen & Bathroom Remodeling Business Plan Template & PDF

• September 4, 2024
• Business Plan

Creating a comprehensive business plan is crucial for launching and running a successful kitchen & bathroom remodeling business. This plan serves as your roadmap, detailing your vision, operational strategies, and financial plan. It helps establish your kitchen & bathroom remodeling business’s identity, navigate the competitive market, and secure funding for growth.

This article not only breaks down the critical components of a kitchen & bathroom remodeling business plan, but also provides an example of a business plan to help you craft your own.

Whether you’re an experienced entrepreneur or new to the service industry, this guide, complete with a business plan example, lays the groundwork for turning your kitchen & bathroom remodeling business concept into reality. Let’s dive in!

Our kitchen and bathroom remodeling business plan is structured to cover all essential aspects needed for a comprehensive strategy. It outlines the company’s operations, marketing strategy, market environment, competitors, management team, and financial forecasts.

• Executive Summary : Provides an overview of the Kitchen & Bathroom Remodeling business concept, market analysis , management team, and financial strategy.
• Services & Location: Describes the range of remodeling services offered, including custom cabinetry, countertops, and appliance installation, and explains the strategic location benefits.
• Service List & Pricing: Lists the remodeling services provided, detailing the customization options and pricing structure .
• Key Stats: Shares industry size , growth trends, and relevant statistics for the remodeling market.
• Key Trends : Highlights recent trends affecting kitchen and bathroom remodeling, such as luxury finishes and smart appliances.
• Key Competitors: Analyzes main competitors in the vicinity and differentiates the business from them.
• SWOT : Conducts a strengths, weaknesses, opportunities, and threats analysis specific to kitchen and bathroom remodeling.
• Marketing Plan : Outlines strategies for attracting new customers and retaining existing ones, including showcasing past project portfolios and leveraging social media.
• Timeline : Sets out key milestones and objectives from business launch through the first year of operation.
• Management: Introduces the management team, detailing their experience in remodeling, design expertise, and roles within the business.
• Financial Plan: Forecasts the business’s 5-year financial performance, covering revenue projections, expense breakdowns, funding requirements, and financial statements (profit and loss, cash flow, balance sheet).

Kitchen & Bathroom Remodeling Business Plan

Fully editable 30+ slides Powerpoint presentation business plan template.

Download an expert-built 30+ slides Powerpoint business plan template

Executive Summary

The Executive Summary introduces the business plan for your Kitchen & Bathroom Remodeling company, offering a succinct overview of your company and its services. It should outline your market positioning, the array of remodeling services you provide, its location, and size, and a summary of daily operations.

This section should also delve into how your remodeling business will fit into the local market, including the number of direct competitors in the area, identifying who they are, along your company’s unique selling points that set it apart from these competitors.

Additionally, you should include information about the management and co-founding team, detailing their roles and contributions to the company’s success.

A summary of your financial projections, including revenue and profits over the next five years, should also be presented here to provide a clear picture of your company’s financial plan.

Kitchen & Bathroom Remodelling Business Plan Executive Summary Example

Business Overview

This section should introduce the name of the remodeling service, its location, and a brief overview of the services offered. It sets the stage for showcasing the business’s  Unique Selling Proposition  ( USP ). Whether it’s a focus on luxurious finishes, custom designs, or a commitment to sustainability, the USP should stand out as a defining feature of the remodeling service.

Example: “Modern Kitchen Co.,” centrally positioned in [City Name], specializes in transformative kitchen and bathroom remodels within a [x] mile radius. Known for its innovative designs and personalized remodeling solutions, their USP lies in delivering luxurious and sustainable spaces that elevate modern living standards.

Market Overview

Understanding the  market size , growth trends, and industry dynamics is pivotal. This section should emphasize the immense potential within the remodeling industry, supported by relevant data on market value and growth rates. Highlighting industry trends such as the surge in luxury designs and the increasing demand for sustainable remodeling materials provides insight into the evolving market landscape.

Furthermore, outlining the competitive landscape is vital. The executive summary should identify  key competitors  and show how the remodeling service positions itself in this environment. Whether it emphasizes high-end designs, eco-friendly remodeling practices, or exceptional customer service, this section serves to underscore the unique market positioning of the service.

Example: Within the remodeling industry valued at $79.7 billion, and with the market for new kitchen and bathroom construction projects at $119.6 billion, Modern Kitchen Co. competes with a wide range of contractors. Their differentiation is evident through bespoke luxury designs, sustainable remodeling solutions, and a commitment to providing tailored and environmentally conscious spaces.

Management Team

Showcasing the qualifications and experiences of the key team members within the summary adds credibility. Highlighting expertise in remodeling, design, project management, or customer service assures potential clients of the service’s capability to deliver outstanding results.

Example: Modern Kitchen Co. is steered by a team with comprehensive experience in business development and  marketing strategies . Their adeptness in offering innovative, luxurious, and sustainable remodeling solutions ensures client satisfaction and the continual growth of the business.

Financial Plan

The financial plan overview should succinctly summarize the company’s financial goals and projections, comprising revenue targets and profit margins. This offers a clear glimpse into the company’s financial direction.

Example: Modern Kitchen Co. aims to achieve a yearly revenue of $3.3 million and a 15%  operating profit  margin ( EBITDA ) by 2028. Their financial strategy revolves around delivering high-end remodeling solutions, employing sustainable materials, and implementing efficient project management, positioning the company for sustainable growth and market leadership within the remodeling sector.

Service & Rates

 Offer a wide range of kitchen and bathroom remodeling services, including custom cabinetry, modern fixtures, and complete renovations. Emphasize quality craftsmanship and personalized design solutions.

Outline a clear pricing structure that reflects the value and quality of your services, from budget-friendly options to luxury remodels. Mention unique offerings like eco-friendly options, smart technology integration, and flexible financing or warranty programs to enhance customer satisfaction and loyalty.

Industry Size & Growth

In the Market Overview of your Kitchen & Bathroom Remodeling business plan, start by evaluating the size of the remodeling industry and its growth prospects. This analysis is crucial for understanding the market’s breadth and pinpointing opportunities for expansion.

Key Market Trends

Proceed to discuss recent trends in the remodeling market, such as the growing consumer interest in smart home technology, energy-efficient appliances, and custom, sustainable materials. Highlight the demand for functional yet aesthetically pleasing spaces that cater to homeowners’ specific needs and preferences, alongside the increasing popularity of eco-conscious and technology-integrated remodeling solutions.

Competitive Landscape

A  competitive analysis  is not just a tool for gauging the position of your kitchen & bathroom remodeling business in the market and its key competitors; it’s also a fundamental component of your business plan. This analysis helps in identifying your kitchen & bathroom remodeling business’s unique selling points, which are essential for differentiating your business in a competitive market.

In addition, the competitive analysis is integral in laying a solid foundation for your business plan. By examining various operational aspects of your competitors, you gain valuable information that ensures your business plan is robust. Let’s dive in!

Identifying Key Competitors in the Remodeling Industry

Start your analysis by identifying direct and indirect competitors in the kitchen and bathroom remodeling sector. Direct competitors may include local remodeling firms specializing in kitchen or bathroom renovations, while indirect competitors could encompass interior design studios or general contractors offering remodeling services as part of their portfolio.

Utilize online resources such as local business directories, industry-specific platforms, and customer review sites like Houzz or Angie’s List to map out competitor locations and gather feedback. Reviews often highlight  strengths and weaknesses ; for instance, consistent praise for “Revamp & Renew Remodeling Co.” for their attention to detail could signify a strength worth noting.

Kitchen & Bathroom Remodeling Business Competitors’ Strategies

Analyzing competitors involves dissecting various aspects of their strategies:

• Service Offerings:  Evaluate the breadth and depth of services provided. For instance, a competitor might excel in luxury bathroom remodels, while another focuses on eco-friendly kitchen renovations, catering to specific clientele niches.
• Craftsmanship and Design Approach:  Consider the craftsmanship and design philosophy employed by competitors. A firm known for sleek, modern designs might attract a different audience than one specializing in rustic, farmhouse-style renovations.
• Pricing Models:  Compare pricing structures. Are your rates competitive with “Swift Renovations,” known for budget-friendly options, or are they more aligned with the high-end offerings of “Elegance Redefined Remodelers”?
• Marketing Strategies :  Assess how competitors market their services. Are they leveraging digital platforms effectively, investing in SEO, or relying on traditional methods like referrals and local events?
• Customer Experience:  Investigate customer experiences. “ComfortCraft Remodeling” might be praised for its project management skills and customer-centric approach, enhancing overall satisfaction.
• Operational Efficiency:  Notice if competitors embrace innovative tools or technologies to streamline processes. “Efficient Home Solutions” may use virtual reality for design visualization, potentially impacting customer engagement.

What’s Your Business’s Value Proposition?

Define your remodeling business’s  unique value proposition . Perhaps your specialization lies in sustainable materials, offering eco-conscious solutions not commonly found among competitors. Consider unique selling points, such as a quick turnaround time or specialized expertise in historical property renovations.

Identify market gaps by gathering customer feedback and observing industry trends. For instance, a surge in demand for smart home integration or universal design for aging-in-place could signify untapped opportunities if competitors aren’t fulfilling these needs.

Tailor your approach based on location demographics. A business situated in an affluent urban area might prioritize luxury and cutting-edge design, while one in a suburban setting could emphasize family-friendly, functional spaces.

First, conduct a SWOT analysis for your Kitchen & Bathroom Remodeling business, highlighting Strengths (such as high-quality craftsmanship and customized design solutions), Weaknesses (including dependency on suppliers or market fluctuations), Opportunities (for instance, the rising trend in home renovations and smart homes), and Threats (such as economic downturns that may reduce home improvement spending).

Marketing Plan

Next, develop a marketing strategy that outlines how to attract and retain customers through targeted advertising in home improvement magazines and websites, promotional offers for first-time clients, a strong online presence with before-and-after project galleries, and participation in local home shows and community events.

Marketing Channels

Utilize various marketing channels to effectively communicate your brand and services to potential clients and engage with your existing customer base.

Digital Marketing

Establish a strong online presence:

• Website and SEO:  Create a professional website showcasing your portfolio, client testimonials, and educational remodeling content. Optimize it for local SEO to enhance visibility in searches related to remodeling services in your area.
• Social Media:  Leverage platforms like Instagram and Houzz to showcase before-and-after remodeling projects and client reviews, and engage with your audience through informative posts and live videos.
• Email Marketing:  Build an email list and regularly send newsletters containing remodeling tips, case studies, and exclusive offers to nurture client relationships.

Local Marketing Initiatives

Engage with the local community:

• Networking and Partnerships:  Collaborate with real estate agents, interior designers, and home improvement stores for referrals or joint promotions. Participate in home expos, seminars, or local trade shows to showcase your expertise.
• Local Advertising:  Advertise in community newsletters, home improvement magazines, and local radio stations. Utilize targeted online ads through platforms like Google Ads to reach potential customers in your locality.

Promotional Activities

Attract potential clients through enticing offers:

• Limited-time Offers:  Introduce seasonal promotions such as ‘Spring Renovation Specials’ or ‘Holiday Kitchen Makeover Discounts’ to attract new clients and encourage repeat business.
• Referral Programs : Incentivize existing clients to refer friends or family by offering discounts or bonuses upon successful conversions.
• Free Consultations:  Provide complimentary initial consultations to prospective clients, demonstrating your expertise and building rapport.

Sales Channels

Effective  sales channels  and strategies are crucial for converting leads into paying customers and maximizing revenue.

Consultative Selling

Understand client needs to tailor solutions:

• Educational Content:  Develop and distribute informative content that educates potential clients about various remodeling options, material choices, design trends, and budgeting tips. Create downloadable resources, blog posts, or video tutorials that address common concerns and showcase your expertise.
• Transparent Quoting:  Provide detailed and transparent quotes that outline the entire scope of work, associated costs, project timelines, and any potential variations. Ensure clarity and transparency to build trust and credibility with potential clients.

Upselling and Add-on Services

Maximize value during client interactions:

• Upgrade Options:  During consultations or project discussions, present additional services or premium material options that enhance the overall quality, functionality, or aesthetics of the remodeling project. Highlight how these upgrades can significantly elevate the final result.
• Accessory Sales:  Offer add-on products or accessory items that complement the remodeling projects. This could include designer fixtures, innovative appliances, smart home technology, or specialty finishes that enhance the overall appeal of the renovation.

Customer Retention Strategies

Foster long-term client relationships:

• Post-Project Follow-ups:  Conduct post-project evaluations and follow-ups to ensure client satisfaction and address any post-installation concerns promptly. Request feedback or testimonials to showcase your commitment to delivering exceptional service.
• Maintenance Contracts:  Offer ongoing maintenance contracts or annual check-ups to past clients. This ensures that their renovated spaces are well-maintained and offers an opportunity to upsell additional services or recommend upgrades for continued client engagement.

Strategy Timeline

Finally, create a detailed timeline that outlines key milestones for your business’s launch, marketing initiatives, customer base growth, and expansion goals, ensuring the business progresses with clear direction and purpose.

The Management section focuses on the kitchen & bathroom remodeling business’s management and their direct roles in daily operations and strategic direction. This part is crucial for understanding who is responsible for making key decisions and driving the kitchen & bathroom remodeling business towards its financial and operational goals.

For your kitchen & bathroom remodeling business plan, list the core team members, their specific responsibilities, and how their expertise supports the business.

The Financial Plan section is a comprehensive analysis of your financial projections for revenue, expenses, and profitability. It lays out your kitchen & bathroom remodeling business’s approach to securing funding, managing cash flow, and achieving breakeven.

This section typically includes detailed forecasts for the first 5 years of operation, highlighting expected revenue, operating costs , and capital expenditures.

For your kitchen & bathroom remodeling business plan, provide a snapshot of your financial statement (profit and loss, balance sheet, cash flow statement), as well as your key assumptions (e.g. number of customers and prices, expenses, etc.).

Make sure to cover here _ Profit and Loss _ Cash Flow Statement _ Balance Sheet _ Use of Funds

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Home Improvement Business Plan

The extensive marketplace and indefinite opportunities for expansion make home improvement a lucrative business venture to undertake.

Anyone can start a business, however, to captivate the highly competitive market space, one needs a comprehensive business plan. It will help you secure the funding and attain the desired growth potential.

Need help writing a business plan for your home improvement business? You’re at the right place. Our home improvement business plan template will help you get started.

Free Business Plan Template

Download our free home improvement business plan template now and pave the way to success. Let’s turn your vision into an actionable strategy!

• Fill in the blanks – Outline
• Financial Tables

How to Write A Home Improvement Business Plan?

Writing a home improvement business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan:

1. Executive Summary

An executive summary is the first section planned to offer an overview of the entire business plan. However, it is written after the entire business plan is ready and summarizes each section of your plan.

Here are a few key components to include in your executive summary:

• Introduce your Business: Start your executive summary by briefly introducing your business to your readers.This section may include the name of your home improvement business, its location, when it was founded, the type of home improvement business (E.g., kitchen and bathroom remodeling, paint contractors, flooring businesses, HVAC contracting, general home improvement), etc.
• Market Opportunity: Summarize your market research, including market size, growth potential, and marketing trends. Highlight the opportunities in the market and how your business will fit in to fill the gap.
• Financial Highlights: Briefly summarize your financial projections for the initial years of business operations. Include any capital or investment requirements, associated startup costs, projected revenues, and profit forecasts.
• Call to Action: Summarize your executive summary section with a clear CTA, for example, inviting angel investors to discuss the potential business investment

Ensure your executive summary is clear, concise, easy to understand, and jargon-free.

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2. Business Overview

The business overview section of your business plan offers detailed information about your company. The details you add will depend on how important they are to your business. Yet, business name, location, business history, and future goals are some of the foundational elements you must consider adding to this section:

• General home improvement business
• Kitchen and bathroom remodeling specialists
• Painting contracting
• Flooring Companies
• Home automation contracting
• Describe the legal structure of your home improvement company, whether it is a sole proprietorship, LLC, partnership, or others.Explain where your business is located and why you selected the place.
• Owners: List the names of your home improvement company’s founders or owners. Describe what shares they own and their responsibilities for efficiently managing the business.
• Future Goals: It’s crucial to convey your aspirations and vision. Mention your short-term and long-term goals; they can be specific targets for revenue, market share, or expanding your services.

This section should provide a thorough understanding of your business, its history, and its future plans. Keep this section engaging, precise, and to the point.

3. Market Analysis

The market analysis section of your business plan should offer a thorough understanding of the industry with the target market, competitors, and growth opportunities. You should include the following components in this section.

• Target market: Start this section by describing your target market. Define your ideal customer and explain what types of services they prefer. Creating a buyer persona will help you easily define your target market to your readers.For instance, homeowners, real estate investors, and DIY enthusiasts would be an ideal target audience for a home improvement business.
• Market size and growth potential: Describe your market size and growth potential and whether you will target a niche or a much broader market.
• The US home improvement market was 537.9 billion dollars huge in 2021. To clearly determine your share in this humongous market, it is crucial to determine your target market and its growth potential.
• Competitive Analysis: Identify and analyze your direct and indirect competitors. Identify their strengths and weaknesses, and describe what differentiates your home improvement business from them. Point out how you have a competitive edge in the market.
• Market Trends: Analyze emerging trends in the industry, such as technology disruptions, changes in customer behavior or preferences, etc. Explain how your business will cope with all the trends.For instance, home improvement smart home technology has a booming market; explain how you plan on dealing with this potential growth opportunity.
• Regulatory Environment: List regulations and licensing requirements that may affect your home improvements company, such as business registration, license, and permits, compliance with safety standards, insurance, environmental regulations, state and federal regulations, etc.

Here are a few tips for writing the market analysis section of your home improvement business plan:

• Conduct market research, industry reports, and surveys to gather data.
• Provide specific and detailed information whenever possible.
• Illustrate your points with charts and graphs.
• Write your business plan keeping your target audience in mind.

4. Products And Services

The product and services section should describe the specific services and products that will be offered to customers. To write this section should include the following:

• Design Consultation
• Project planning & management
• Installation and Remodeling Services
• Repair & maintenance
• Building materials
• Hardware & tools
• Fixtures and fittings
• Paint and coatings
• Quality measures: This section should explain how you maintain quality standards and consistently provide the highest quality service.This may include ensuring high-quality materials and products, a skilled workforce, and a robust quality control business plan.
• Additional Services: Mention if your home improvement business offers any additional services. You may include services like customization, tool rentals, DIY workshops, etc.

In short, this section of your home improvement plan must be informative, precise, and client-focused. By providing a clear and compelling description of your offerings, you can help potential investors and readers understand the value of your business.

5. Sales And Marketing Strategies

Writing the sales and marketing strategies section means a list of strategies you will use to attract and retain your clients. Here are some key elements to include in your sales & marketing plan:

• Unique Selling Proposition (USP): Define your business’s USPs depending on the market you serve, the equipment you use, and the unique services you provide. Identifying USPs will help you plan your marketing strategies.For example, specialization in specific home improvement services, extensive product selection, and green and sustainable practices could be some of the great USPs for a home improvement company.
• Pricing Strategy: Describe your pricing strategy—how you plan to price your remodeling services and stay competitive in the local market. You can mention any entry discounts you plan on offering to attract new customers to your home improvement service.
• Marketing Strategies: Discuss your marketing strategies to market your services. You may include some of these marketing strategies in your business plan—social media marketing, Google ads, brochures, email marketing, content marketing, and print marketing.
• Sales Strategies: Outline the strategies you’ll implement to maximize your sales. Your sales strategies may include direct sales calls, partnering with local contractors, home builders, and the local community, offering referral programs, etc.
• Customer Retention: Describe your customer retention strategies and how you plan to execute them. For instance, introducing loyalty programs, discounts on annual maintenance services, priority services, etc.

Overall, this section of your home improvement business plan should focus on customer acquisition and retention.

Have a specific, realistic, and data-driven approach while planning sales and marketing strategies for your home improvement business, and be prepared to adapt or make strategic changes in your strategies based on feedback and results.

6. Operations Plan

The operations plan section of your business plan should outline the processes and procedures involved in your business operations, such as staffing requirements and operational processes. Here are a few components to add to your operations plan:

• Staffing & Training: Mention your home improvement company’s staffing requirements, including the number of sales associates, cashiers, and technicians, design consultants. Include their qualifications, the training required, and the duties they will perform.
• Operational Process: Outline the processes and procedures you will use to run your home improvement business. Your operational processes may include sourcing materials, offering quotes, drafting and signing contracts, dispatching teams, billing and insurance, and skill training of technicians and staff.
• Equipment & Machinery: Include the list of equipment and machinery required for home improvements, such as hand and power tools, power generators, air compressors, ladders, safety equipment, etc.Explain how these technologies help you maintain quality standards and improve the efficiency of your business operations.

Adding these components to your operations plan will help you lay out your business operations, which will eventually help you manage your business effectively.

7. Management Team

The management team section provides an overview of your home improvement business’s management team. This section should provide a detailed description of each manager’s experience and qualifications, as well as their responsibilities and roles.

• Founders/CEO: Mention the founders and CEO of your home improvement company, and describe their roles and responsibilities in successfully running the business.
• Key managers: Introduce your management and key members of your team, and explain their roles and responsibilities.It should include, key executives(e.g. COO, CMO.), senior management, and other department managers (e.g. store manager, customer service manager.) involved in the remodeling business operations, including their education, professional background, and any relevant experience in the remodeling industry.
• Organizational structure: Explain the organizational structure of your management team. Include the reporting line and decision-making hierarchy.
• Compensation Plan: Describe your compensation plan for the management and staff. Include their salaries, incentives, and other benefits.
• Advisors/Consultants: Mentioning advisors or consultants in your business plans adds credibility to your business idea.So, if you have any advisors or consultants, include them with their names and brief information consisting of roles and years of experience.

This section should describe the key personnel for your home improvement services, highlighting how you have the perfect team to succeed.

8. Financial Plan

Your financial plan section should provide a summary of your business’s financial projections for the first few years. Here are some key elements to include in your financial plan:

• Profit & loss statement: Describe details such as projected revenue, operational costs, and service costs in your projected profit and loss statement . Make sure to include your business’s expected net profit or loss.
• Cash flow statement: The cash flow for the first few years of your operation should be estimated and described in this section. This may include billing invoices, payment receipts, loan payments, and any other cash flow statements.
• Balance Sheet: Create a projected balance sheet documenting your home improvement business’s assets, liabilities, and equity.
• Break-even point: Determine and mention your business’s break-even point—the point at which your business costs and revenue will be equal.This exercise will help you understand how much revenue you need to generate to sustain or be profitable.
• Financing Needs: Calculate costs associated with starting a home improvement business, and estimate your financing needs and how much capital you need to raise to operate your business. Be specific about your short-term and long-term financing requirements, such as investment capital or loans.

Be realistic with your financial projections, and make sure you offer relevant information and evidence to support your estimates.

9. Appendix

The appendix section of your plan should include any additional information supporting your business plan’s main content, such as market research, legal documentation, financial statements, and other relevant information.

• Add a table of contents for the appendix section to help readers easily find specific information or sections.
• In addition to your financial statements, provide additional financial documents like tax returns, a list of assets within the business, credit history, and more. These statements must be the latest and offer financial projections for at least the first three or five years of business operations.
• Provide data derived from market research, including stats about the home improvement industry, user demographics, and industry trends.
• Include any legal documents such as permits, licenses, and contracts.
• Include any additional documentation related to your business plan, such as product brochures, marketing materials, operational procedures, etc.

Use clear headings and labels for each section of the appendix so that readers can easily find the necessary information.

Remember, the appendix section of your home improvement business plan should only include relevant and important information supporting your plan’s main content.

The Quickest Way to turn a Business Idea into a Business Plan

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This sample home improvement business plan will provide an idea for writing a successful home improvement plan, including all the essential components of your business.

After this, if you still need clarification about writing an investment-ready business plan to impress your audience, download our home improvement business plan pdf .

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Frequently asked questions, why do you need a home improvement business plan.

A business plan is an essential tool for anyone looking to start or run a successful home improvement business. It helps to get clarity in your business, secures funding, and identifies potential challenges while starting and growing your business.

Overall, a well-written plan can help you make informed decisions, which can contribute to the long-term success of your home improvement company.

How to get funding for your home improvement business?

There are several ways to get funding for your home improvement business, but self-funding is one of the most efficient and speedy funding options. Other options for funding are:

• Bank loan – You may apply for a loan in government or private banks.
• Small Business Administration (SBA) loan – SBA loans and schemes are available at affordable interest rates, so check the eligibility criteria before applying for it.
• Crowdfunding – The process of supporting a project or business by getting a lot of people to invest in your business, usually online.
• Angel investors – Getting funds from angel investors is one of the most sought startup options.

Apart from all these options, there are small business grants available, check for the same in your location and you can apply for it.

Where to find business plan writers for your home improvement business?

There are many business plan writers available, but no one knows your business and ideas better than you, so we recommend you write your home improvement business plan and outline your vision as you have in your mind.

What is the easiest way to write your home improvement business plan?

A lot of research is necessary for writing a business plan, but you can write your plan most efficiently with the help of any home improvement business plan example and edit it as per your need. You can also quickly finish your plan in just a few hours or less with the help of our business plan software .

Can a good home improvement business plan help me secure funding?

Indeed. A well-crafted home improvement business plan will help your investors better understand your business domain, market trends, strategies, business financials, and growth potential—helping them make better financial decisions.

So, if you have a profitable and investable business, a comprehensive business plan can certainly help you secure your business funding.

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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Renovation Contractor Business Plan Template

Document description.

This renovation contractor business plan template has 35 pages and is a MS Word file type listed under our business plan kit documents.

Sample of our renovation contractor business plan template:

INSERT IMAGE/LOGO COMPANY NAME Business Plan 2011 Owner: INSERT NAME INSERT ADDRESS Phone: Email:

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3,000+ templates & tools to help you start, run & grow your business, all the templates you need to plan, start, organize, manage, finance & grow your business, in one place., templates and tools to manage every aspect of your business., 8 business management modules, in 1 place., document types included.

Free Renovation Business Plan Template

A successful renovation business is based on a solid business plan. To help you out, we've designed a business plan template PDF specifically for renovation business owners. Get your copy today!

How can a renovation business plan help you?

A solid business plan acts as your strategy guide for building a successful trade business.

Whether you're an existing business or just starting out, a business plan helps you get organised.

Use a business plan to help secure funding for your trade business.

Get your free renovation business plan template:

What is tradify.

Tradify is the best renovation business management software that runs all your jobs from start to finish.

Bring together all your enquiries, estimates, quotes, jobs, staff, invoices, and more — all in one place, across every device.

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Renovation Business Plan Template & Guidebook

Are you ready to get your renovation business up and running? With the right plan in place, you can create a thriving business that resonates with customers and provides numerous growth opportunities. The #1 Renovation Business Plan Template & Guidebook is the perfect tool to help you prepare and put together a professional plan for success! This comprehensive guidebook will provide step-by-step instructions, expert tips, and all the necessary resources you need to create your business plan and make sure it is implemented with precision.

Get worry-free services and support to launch your business starting at $0 plus state fees.

• How to Start a Profitable Renovation Business [11 Steps]
• 10+ Best & Profitable Renovation Business Ideas [2023]
• 25 Catchy Renovation Business Names:

How to Write a Renovation Business Plan in 7 Steps:

1. describe the purpose of your renovation business..

The first step to writing your business plan is to describe the purpose of your renovation business. This includes describing why you are starting this type of business, and what problems it will solve for customers. This is a quick way to get your mind thinking about the customers’ problems. It also helps you identify what makes your business different from others in its industry.

It also helps to include a vision statement so that readers can understand what type of company you want to build.

Here is an example of a purpose mission statement for a renovation business:

The purpose of our company is to offer high-quality, customer-oriented renovation services that are tailored to meet the individual needs of our clients. We strive to inspire and create vibrant, personalized spaces that reflect the values and lives of our customers while delivering on time and on budget.

2. Products & Services Offered by Your Renovation Business.

The next step is to outline your products and services for your renovation business. 

When you think about the products and services that you offer, it's helpful to ask yourself the following questions:

• What is my business?
• What are the products and/or services that I offer?
• Why am I offering these particular products and/or services?
• How do I differentiate myself from competitors with similar offerings?
• How will I market my products and services?

You may want to do a comparison of your business plan against those of other competitors in the area, or even with online reviews. This way, you can find out what people like about them and what they don’t like, so that you can either improve upon their offerings or avoid doing so altogether.

3. Build a Creative Marketing Stratgey.

If you don't have a marketing plan for your renovation business, it's time to write one. Your marketing plan should be part of your business plan and be a roadmap to your goals. 

A good marketing plan for your renovation business includes the following elements:

Target market

• Who is your target market?
• What do these customers have in common?
• How many of them are there?
• How can you best reach them with your message or product?

Customer base 

• Who are your current customers? 
• Where did they come from (i.e., referrals)?
• How can their experience with your renovation business help make them repeat customers, consumers, visitors, subscribers, or advocates for other people in their network or industry who might also benefit from using this service, product, or brand?

Product or service description

• How does it work, what features does it have, and what are its benefits?
• Can anyone use this product or service regardless of age or gender?
• Can anyone visually see themselves using this product or service?
• How will they feel when they do so? If so, how long will the feeling last after purchasing (or trying) the product/service for the first time?

Competitive analysis

• Which companies are competing with yours today (and why)? 
• Which ones may enter into competition with yours tomorrow if they find out about it now through word-of-mouth advertising; social media networks; friends' recommendations; etc.)
• What specific advantages does each competitor offer over yours currently?

Marketing channels

• Which marketing channel do you intend to leverage to attract new customers?
• What is your estimated marketing budget needed?
• What is the projected cost to acquire a new customer?
• How many of your customers do you instead will return?

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4. Write Your Operational Plan.

Next, you'll need to build your operational plan. This section describes the type of business you'll be running, and includes the steps involved in your operations. 

In it, you should list:

• The equipment and facilities needed
• Who will be involved in the business (employees, contractors)
• Financial requirements for each step
• Milestones & KPIs
• Location of your business
• Zoning & permits required for the business

What equipment, supplies, or permits are needed to run a renovation business?

Equipment: Safety gear, power tools, demolition tools, hand saws, screwdrivers, hammers, ladders, drills, sanders, paint mixers, measuring tape. Supplies: Drywall sheets, nails & screws, sealants & caulks, drop cloths and tarps. Permits: Depending on location and scope of work some permits may be required (building permit). Check with local regulations to get information on the specific permit types needed.

5. Management & Organization of Your Renovation Business.

The second part of your renovation business plan is to develop a management and organization section.

This section will cover all of the following:

• How many employees you need in order to run your renovation business. This should include the roles they will play (for example, one person may be responsible for managing administrative duties while another might be in charge of customer service).
• The structure of your management team. The higher-ups like yourself should be able to delegate tasks through lower-level managers who are directly responsible for their given department (inventory and sales, etc.).
• How you’re going to make sure that everyone on board is doing their job well. You’ll want check-ins with employees regularly so they have time to ask questions or voice concerns if needed; this also gives you time to offer support where necessary while staying informed on how things are going within individual departments too!

6. Renovation Business Startup Expenses & Captial Needed.

This section should be broken down by month and year. If you are still in the planning stage of your business, it may be helpful to estimate how much money will be needed each month until you reach profitability.

Typically, expenses for your business can be broken into a few basic categories:

Startup Costs

Startup costs are typically the first expenses you will incur when beginning an enterprise. These include legal fees, accounting expenses, and other costs associated with getting your business off the ground. The amount of money needed to start a renovation business varies based on many different variables, but below are a few different types of startup costs for a renovation business.

Running & Operating Costs

Running costs refer to ongoing expenses related directly with operating your business over time like electricity bills or salaries paid out each month. These types of expenses will vary greatly depending on multiple variables such as location, team size, utility costs, etc.

Marketing & Sales Expenses

You should include any costs associated with marketing and sales, such as advertising and promotions, website design or maintenance. Also, consider any additional expenses that may be incurred if you decide to launch a new product or service line. For example, if your renovation business has an existing website that needs an upgrade in order to sell more products or services, then this should be listed here.

7. Financial Plan & Projections

A financial plan is an important part of any business plan, as it outlines how the business will generate revenue and profit, and how it will use that profit to grow and sustain itself. To devise a financial plan for your renovation business, you will need to consider a number of factors, including your start-up costs, operating costs, projected revenue, and expenses. 

Here are some steps you can follow to devise a financial plan for your renovation business plan:

• Determine your start-up costs: This will include the cost of purchasing or leasing the space where you will operate your business, as well as the cost of buying or leasing any equipment or supplies that you need to start the business.
• Estimate your operating costs: Operating costs will include utilities, such as electricity, gas, and water, as well as labor costs for employees, if any, and the cost of purchasing any materials or supplies that you will need to run your business.
• Project your revenue: To project your revenue, you will need to consider the number of customers you expect to have and the average amount they will spend on each visit. You can use this information to estimate how much money you will make from selling your products or services.
• Estimate your expenses: In addition to your operating costs, you will need to consider other expenses, such as insurance, marketing, and maintenance. You will also need to set aside money for taxes and other fees.
• Create a budget: Once you have estimated your start-up costs, operating costs, revenue, and expenses, you can use this information to create a budget for your business. This will help you to see how much money you will need to start the business, and how much profit you can expect to make.
• Develop a plan for using your profit: Finally, you will need to decide how you will use your profit to grow and sustain your business. This might include investing in new equipment, expanding the business, or saving for a rainy day.

Frequently Asked Questions About Renovation Business Plans:

Why do you need a business plan for a renovation business.

A business plan is important for any business, including a renovation business. It will help you create a roadmap for success, set goals and objectives, secure financing, and organize and manage the various aspects of your business. Creating a comprehensive business plan will also ensure that you have a well-defined strategy for reaching your goals and objectives.

Who should you ask for help with your renovation business plan?

It is a good idea to consult a professional business advisor or accountant for help in creating a renovation business plan. A lawyer may also be able to provide valuable advice and guidance on legal issues and regulations that may apply to your business.

Can you write a renovation business plan yourself?

Yes, it is possible to write a renovation business plan yourself by first researching other renovation businesses and the industry, then gathering information about the renovation business you want to start, such as services you plan to offer, your target market and customer base, marketing and pricing strategies, financial projections, and the steps you will take to reach your goals. Once all of that information is compiled, you can use templates or worksheets to organize your data into a comprehensive business plan.

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Remodeling Business Plan

Start your own remodeling business plan

Executive Summary executive summary is a brief introduction to your business plan. It describes your business, the problem that it solves, your target market, and financial highlights.">

Introduction Comgate is a custom mill house specializing in creating architectural woodwork in the form of wall paneling, custom cabinets, and other products for the local residential market. After initial losses and several thin profit years of competitive bidding construction projects, Comgate is creating this business plan in order to bring its mission statement into clearer focus. Prior years were characterized by hectic efforts to bid as many jobs as possible. Margins were thin as pricing policy was “flexible” for fear that there would be insufficient work for production staff.

However, with the growth of sufficient sales, Comgate has the opportunity to  create greater margins, increase efficiency, and improve overall profitability through long-overdue restructuring and focusing on our target market. These changes will assure more accuracy in pricing, billing, and tracking of costs for comparison purposes. Profits are expected to increase.

The Company Comgate’s mission is to compete profitably in the high-end residential market for custom woodwork within the state of Connecticut. It will emphasize custom work of the highest quality, and specialize in the most demanding needs of new and remodeled designer homes in the $3 to $15 million price range.

Products Comgate is engaged in custom architectural woodwork in the form of wall paneling, custom cabinets, molding, pilasters, radius units, circular staircases in special woods, elaborate dressing rooms, specialty kitchen work, etc. The recent addition of state-of-the-art CAD capability will help substantially to increase sales of higher-end products by targeting design professionals who are in a position to influence choices of subcontractors building “trophy” homes costing over $3 million. “Custom” is the key word at Comgate. The average home would not use our products. Custom woodworking of the type carried out by Comgate is made to order only. No finished goods are made up for stock. For this reason, there are rarely very long production runs.

The Market The industry is mature and well-represented. There are many mill shops in the same market area which are focused on specialty areas. One mill shop may concentrate on custom furniture and form special alliances with upholstery shops. Other mill shops may specialize in standard kitchen cabinetry. Comgate is targeting the highest end of the residential market ($3-$15 million homes). This work is less price-sensitive and relatively steady, even during economic valleys. The most critical competitive weapon which the company holds at the moment is its CAD capability. The program is especially formulated to suit the custom woodwork market, and is expected to make substantial in-roads into the chosen highest end residential market. Comgate should be able to set itself apart from the competition, and be able to fully utilize its recently expanded production capacity.

With greater and greater demand for high-end trophy home construction, coupled with the increasing difficulty of attracting and keeping skilled workers, Comgate is moving toward linking its CAD capability with the practices of design professionals that will allow the company to out-source certain simpler parts in a project to other mill shops, while keeping the more demanding work for itself. Being able to present another mill shop with exact detailed CAD drawings, together with precise dimensions and material lists, will allow Comgate to increase sales and profits, and to concentrate on the more challenging custom woodwork products.

Financial Projections The recent addition of over $110,000 in advanced new Computer Numerical Control (CNC) machinery, coupled with the building of an in-house industry-adapted Computer Aided Drafting (CAD) capability, will propel sales to nearly $800,000 by the end of Year 1, and $1.2 million by the end of Year 3. Profits will grow as well. A desire to shorten accounts payable in Year 2 to take advantage of all available trade discounts, together with rising receivables, will result in a short-term need for increased bank lines of credit of approximately $30,000.

1.1 Mission

Comgate’s mission is to compete profitably in the high-end residential market for custom woodwork within the state of Connecticut. We will emphasize on custom work of the highest quality, and specialize in the most demanding needs of new and remodeled designer homes in the $3 to $15 million price range.

1.2 Keys to Success

The most important keys to success in the contractors’ mill shop industry are:

• Avoid bidding projects which are likely to be awarded based primarily on price, projects being undertaken by those who are disreputable (no matter how badly the company needs work), projects which are too big (more than 20% of last year’s sales), or projects which do not fit the company’s niche market and thus unlikely to advance the company’s marketing strategy.
• Accurate take-off and listing.
• A clear understanding between the company and the client, in reference to quality and terms of payment.
• Correct calculation of material (including wastage) and labor required to complete the project.
• Correct application of overhead factors and profit margins, plus any special considerations.
• An administrative system supported by operating procedures that accurately tracks the job costing and compares the job as bid with the actual costs of completing the job. Constant adjustments to bid formulas.
• Reliable production staff that communicates well with administration to assure that the job is produced on time and as bid, making maximum efficient use of labor, materials, and available machinery.

1.3 Objectives

Comgate’s major objectives are:

• Increase production. Given the new machinery and four production staff, full productive capacity has been carefully measured. The goal is to reach, on a monthly basis, 80% of this capacity in the last quarter of Year 1, 85% in Year 2, and 90% in Year 3. This 80% of capacity translates into monthly production of 342 feet of crown molding, 22 pilasters, 54 doors of various grades, and 77 linear feet of cabinets (or some equivalent combination of these items). This will result in monthly sales of $60,816.
• A much simpler task is to maintain site contract workers (six) at present, full employment levels will generate monthly revenue of $34,623 which (after expenses) nets the company $21,794.
• Continue efforts to bring the company’s in-house CAD capability to the attention of more design professionals, especially those in Hartford, New Haven, Stamford, Norwalk, and Shelton, as these are the areas with the greatest concentration of the chosen $3 to $15 million residential homes.
• Join the Connecticut Chapter of the American Society of Interior Designers (ASID) as an industry partner as well as the Connecticut Society of Architects (CSA). Get listed in their resource directories.
• Complete the planned administrative changes to ensure that all work is properly billed, in a timely manner, and to ensure that jobs are correctly tracked so as to facilitate later cost comparisons with bid prices.
• Work to complete an operations manual that has been started.

Company Summary company overview ) is an overview of the most important points about your company—your history, management team, location, mission statement and legal structure.">

2.1 Company Ownership

Comgate is a limited liability S corporation wholly-owned by Andrew Comins. It was incorporated in 1996.

2.2 Company History

This chapter includes a standard chart and table of the company’s performance over the past few years.

Since a banker may wish to see more in-depth analysis of past performance, a copy of an Excel spreadsheet has been included in Appendix A. Analysis has been provided in five basic areas – Liquidity, Safety, Profitability, Balance Sheet and Operations Management. This compares Comgate’s 1999 financials with the results of all similar mill shops responding to a survey (October, 1999) conducted by the Architectural Woodworking Institute (AWI) in Reston, Virginia.

See Chapter 7.2 Key Financial Indicators for further analysis of past financial results.

Note: appendices A – K have been omitted from this sample plan presentation.

2.3 Company Locations and Facilities

The company is located in New Haven, Ct. in rented facilities. Total area is 2,500 square feet of which about 100 square feet is taken up with administration. Some expansion in the present facilities is possible by renting another 1,600 square feet of adjoining space. This plan assumes that this additional space will be added in January, 2000 at an increase of $2,000 in monthly rent.

A diagram of the production hall showing the location of the various major pieces of machinery is given in Appendix G.

Products and Services

The products used in this plan were limited to only five items to simplify calculations. “Custom” is the key word. The average home would not use these items. Custom woodworking of the type carried out by Comgate is made to order only. No finished goods are made up for stock. For this reason, there are rarely very long production runs.

3.1 Product and Service Description

Comgate is engaged in custom architectural woodwork in the form of wall paneling, custom cabinets, molding, pilasters, etc. Although by nature of the word “custom” the milled products can be totally unique, the vast majority of products milled to date fall into only these few general categories. However, assuming success with the company’s marketing strategy, Comgate will move more up-market within the high-end residential market (see Chapter 4.0, Market Analysis Summary). Rather than produce ordinary high-quality casework, the company, for example, might produce a custom casework item in soft maple with an antiqued crackle finish designed to hide a stereo system. Radius units, circular staircases in special woods, elaborate dressing rooms and kitchens with a lot of curves would be further examples of challenging work that would be in line with stated strategy goals. More ordinary jobs would be accepted only if the jobs fit into the company’s out-sourcing guidelines. The recent addition of state-of-the-art CAD capability will help substantially to increase sales of higher-end products by targeting design professionals who are in a position to influence choices of subcontractors building “trophy” homes costing over $3 million.

3.2 Competitive Comparison

Performing a competitive comparison with products produced by other mill shops is not a simple task as the products are custom. There are no price lists. Financial comparisons can be made, however, with a group of mill shops (see Architectural Woodwork Institute AWI survey results in Appendix A). There are 12 mill shops in the New Haven area including Comgate. There may be one or two that are not members of AWI and therefore not listed in the membership directory. It is also known that some very large construction companies have their own in-house mill shops (see chapter on Industry Participants). Their present combined sales of all products sold to all home markets are approximately $12-$14 million annually. The market study estimates the total trophy home renovation and new construction market in Greater New Haven to be $127 million of which at least 10% is made up of custom wood millwork. This 10% or $12.7 million would seem to indicate that the demand from this market sector alone is equal to the total supply available to all market sectors. The demand clearly outstrips supply in respect to suppliers in New Haven for the demand in the area. Obviously, part of the demand must be being met by suppliers of high-end woodwork located outside New Haven.

Comgate is targeting the highest end of the residential market ($3-$15 million homes). This work is less price-sensitive and relatively steady, even during economic valleys. The most critical competitive weapon which the company holds at the moment is its CAD capability, which was developed by the person who is on contract to the company. The program is especially formulated to suit the custom woodwork market, and is expected to make substantial in-roads into the chosen highest end residential market.

3.3 Sales Literature

At the present time no sales literature is available. Brochures of high quality will only be produced after production capacity has been expanded and success has been reached in filling the stated management teams gaps.

3.4 Fulfillment

All materials used in the company’s production are available from a number of local suppliers (primarily lumber dealers). Sourcing has never been an issue of concern.

3.5 Technology

Technology does play a part in this industry. Major custom woodworking machinery has incorporated time and labor-saving advantages of the computer age. Precision digital settings and the use of lasers make measurement faster and more exact. Comgate has added over $110,000 in new CNC equipment this year, which will allow the company to substantially increase production despite the limitations imposed by its rather small production hall. Comgate’s CAD department is an attractive addition which is already demonstrating success in image-building with interior designers and architects to the wealthy.

3.6 Future Products and Services

In the past, Comgate has produced custom wood products and has bid competitive jobs. The stated marketing direction of the company (see chapter on Target Market Segment Strategy) will move the product line more up-market by producing more challenging items, such as radius units, staircases, elaborate kitchens and libraries in exotic woods, etc. Some of the more mundane sections of a job will be out-sourced to other mill shops (simple paneling, etc.). Any profits from out-sourcing have not been reflected in the financials of this business plan.

Market Analysis Summary how to do a market analysis for your business plan.">

The highest end of the residential market is represented by the new construction and the renovation of “trophy” homes in the $3-$15 million price range. These homes, within the 781/617 area codes, have an annual need for custom woodwork products of approximately $13 million. An estimated further need of $12 million is generated by the same price range of private homes located outside the immediate area but within 60 miles of New Haven.

4.1 Market Segmentation

• Baby Boomers: This includes anyone born between 1945 and 1964, comprising almost 45% of the American population. With large incomes and not enough time, Baby Boomers prefer to call contractors rather than to do it themselves. This is the strongest market for home improvements, according to NARI. This represents the greatest potential for high-end custom woodwork, primarily Baby Boomers with homes in the $3-$15 million category (referred to as “trophy homes”).
• Mature Market: These are individuals aged 55 and older who need their residences to be more efficient and comfortable to allow them to move around more easily. According to the American Association of Retired Persons (AARP), 75% of mature people own their own homes, and 83% do not want to move. The Joint Center reports that the typical elderly homeowner is twice as likely to undertake a replacement project than a younger homeowner. This sector does represent a market for Comgate, but only among the very wealthy, and considerably limited in respect to the Baby Boomers.
• Generation X: These are individuals born between 1965 and 1980 that tend to take their remodeling one step at a time due to lack of money, according to NARI. The Generation X-ers are, to a large extent, do-it-yourselfers. This group does not represent any market potential for Comgate.

According to U.S. Census figures, there are 127,080 new single family homes built annually in the Northeast, of which 15,500 were in Connecticut, and of those, 5,670 were in the New Haven area. With average single family home prices at $222,000 in 1999 (all U.S.), and probably closer to $350,000 or more in the Greater New Haven area, this translates into an annual expenditure of over $1.9 billion for new New Haven single family homes.

U.S. Census also reports that almost $14 billion is spent annually on improvements to existing single family homes in the East. Assuming the same percentage share for the New Haven area this means that 4.5%, or $627 million, was spent on major renovation excluding repair and maintenance. The above statistics indicate that for every dollar spent on new homes, $.31 is spent on major renovations to existing homes.

Since the major market for Comgate’s services is custom woodwork to very expensive single family homes in the price range of $3-$15 million, it is useful to know how many new homes are built annually in that price range in the greater New Haven area, and how many existing homes in that price range engage in major renovations. Research indicates over 300 single family homes in the New Haven area (area codes 781 and 617) in this price range actually changed hands in the past two years. Since major renovations generally are undertaken at the time of purchase, this would suggest that at least 150 homes valued at about $4.5 million each elect to have major renovations each year. $200,000 per renovation is not an unreasonable estimate for a renovation of a property in that price range. That amounts to annual renovations of the most expensive homes in the greater New Haven area of approximately $30 million (150 homes x $200,000). If we use the statistic of $.31 spent on existing home renovations for every dollar spent on new homes, that would indicate that $96 million is annually being spent on construction of new trophy homes in this price range in the New Haven area.

Another subsidiary market is the new trophy homes being built outside of New Haven (60 mile radius), as well as the major renovations for homes in the same price range. For example, 44 homes in the same price range ($3-$15 million) changed hands in Stanford alone during the past two years.

The Market Analysis Table shown below has omitted three zeros in all the numbers, for space reasons.

4.2 Target Market Segment Strategy

In line with Comgate’s mission statement, the target market is trophy homes, both new construction as well as renovations. The results of our market study indicate that the total high-end trophy home market need for custom woodworking in the New Haven area outstrips the supply from available local custom woodworking suppliers. To compete in this market sector, Comgate has chosen a special service which is proving successful with design professionals. This CAD service is explained more fully in the chapter on Market Needs. All three high-end market sectors are in need of the custom millwork products supplied by Comgate. All of these construction projects, whether new construction or major renovation, will involve design professionals of the highest standards and clients with deep pockets. With properties of this caliber, the work is relatively recession-proof. These clients will have requests for custom woodworking products that are most challenging and thus most suited to Comgate’s expressed mission statement and abilities.

4.2.1 Market Trends

With greater and greater demand for high-end trophy home construction, coupled with the increasing difficulty of attracting and keeping skilled workers, Comgate’s move toward linking its CAD capability with the practices of design professionals will allow the company to out-source certain simpler parts in a project to other mill shops, while keeping the more demanding work for themselves. Being able to present another mill shop with exact detailed CAD drawings, together with precise dimensions and material lists, will allow Comgate to increase sales and profits, and to concentrate on the more challenging custom woodwork products.

4.2.2 Market Growth

Market growth of 2.4% is based on the actual growth rate in building permits in the East experienced in years 1997-99 as tabulated by the U.S. Census.

4.2.3 Market Needs

The new CAD service offered by Comgate evolved as a result of the inefficiencies which the company has observed in the past. One major problem in the past deals with blue-prints. Whichever construction company won the bid would send the blue-prints, let’s say for the kitchen, to custom wood mill shops to bid over. The mill shop will do its “take-offs” from the blue-prints and bid to do the kitchen. Later, the winner of the bid finds that the designed kitchen cabinets will not fit into the room. This results in expensive problem-solving and meetings with architects. The architects themselves do not understand the way in which woodworkers build cabinets, so often the architects’ design concepts are made more difficult (and thus more expensive) to realize. The new CAD service offered by Comgate circumvents all of this. By working together with the architect at the initial stages, the architect only needs to do the inexpensive design concepts. The actual details of how the cabinet is structurally designed, as well as the exact measurements to fit the room, are left to Comgate’s CAD person. The architect can save money on drafting, save again by eliminating the usual problem-solving and re-drafting. The client of the architect also saves by insuring that the woodwork is done in a way that suits the latest woodworking methods without interfering with the design concept — the look of the final product. A further advantage is that Comgate saves the expense of on-site measuring.

4.3 Service Business Analysis

4.3.1 distributing a service.

The traditional pattern in this industry is for: an architect to draft the plans according to the specifications, copies given to contractors to bid on, and elements, such as mill work, subcontracted to mill shops who also make competitive bids.

Through Comgate’s marketing strategy, this traditional distribution pattern will be altered to the benefit of everyone concerned. The architect will save on the design drafting (and redrafting), the contractor does not have to worry about change orders to the same degree, because he can feel confident that the desired woodwork will fit the room as built, and Comgate will not have to be as price-sensitive in getting the work. Comgate’s connection to the design professional will assure that the work goes to him rather than being sent to competitive bidding.

4.3.2 Business Participants

The table below lists major competitors in our immediate area. Appendix B is a map marked with red dots indicating the location of mill shops in the Greater New Haven area. None of these mill shops has the same level of CAD capability and few have singled out the trophy home market as their prime focus.

Competing Mill Shops

Strategy and Implementation Summary

Inroads into the stated trophy home market in the Hartford area will be made by contacting and selling Comgate’s new CAD features to those architects and interior designers who are best known for residential work in this price range ($3-$15 million), by sticking to the company’s newly formulated costing/pricing method, and following through on the recent administrative control and reporting changes.

5.1 Sales Strategy

After having successfully priced the job to insure an adequate profit margin after all expenses, it is important to close and bring back the sale. The person to do this is the owner himself, Andrew Comins. To free up his time to network with design professionals it is important that he be able to rely on his office manager to administer properly in his absence (see the chapter on Management Team) and he must be able to rely on a production manager for proper flow in the plant (see Chapter on Management Team Gaps).

The most important aspects to be considered in closing the sale are:

• Clearly stating in the proposal the scope of the work.
• Clearly stating when: both must understand what the schedule is.
• Both parties have to agree to the terms of payment.
• The price must be clear, as well as what is included and what is not.

The proposal must get there on time and get to the right place. A log should be kept of all bidding efforts. Follow up is necessary.

5.1.1 Sales Forecast

There are two sources of revenue:

Plant Produced Sales: This revenue comes from manufacturing custom cabinetry, paneling, and other wood products. To project revenue we have chosen several representative items that make up the majority of plant produced sales. The materials for each of these items have been carefully calculated, as has the labor hours going into each item. The material inputs will show up in the direct cost of each item. The labor hours information allow us to determine how many items we can produce with given manpower and machinery. The cost of the labor is calculated in detail in the Personnel Plan Table. As this plan is being written in October, 2000, the actual sales revenue from January through September will be averaged to arrive at a monthly amount for that period. Projected sales will begin as of October, 2000. The representative items chosen are:

• 250 linear feet of Crown Molding
• 16 Pilasters
• 20 Haunched passage doors (paint grade)
• 20 Haunched passage doors (stain grade)
• 45 linear feet of cabinets

The Costing/Pricing Work-up Sheet in Appendix C will break down, in detail, the various materials going into each of these items, as well as the labor hours for each. Labor break-downs for each phase in the production of these items is also included. For example, the Crown Molding (250 linear ft.) requires a total of 4.25 man hours and only one material. The Pilasters however needs two materials in different quantities. Since 4 man hours per pilaster are needed (see labor break-down sheet), 16 pilasters will require a total of 64 man hours. These 64 man hours have been split equally between the two materials (8/4″ Mahogany and the 4/4″ Mahogany). From the totals in Appendix C the total labor input for the above items is 390.4 hours. Since production is limited to 160 manhours per week (8,000 manhours per year), these above-listed items can only be produced 20.5 times in one year. Total yearly full production, assuming only these items are produced, would be:

• 5,125 linear feet of Crown Molding
• 328 Pilasters
• 410 Haunched passage doors (paint grade)
• 410 Haunched passage doors (stain grade)
• 922.5 linear feet of cabinets

These items have been projected in the attached table on a monthly basis beginning October, 2000 and on a yearly basis for years 2001 and 2002 assuming 80% of full production October-December, 2000, 85% in 2001, and 90% of full production efficiency in year 2002.

Contract Site Labor: Revenue is also derived from providing carpenters/installers at certain work sites. There are six site workers listed with an “S” next to their name. Below are listed the all-in costs of these workers as well as the rates that they are billed out at.

Total net revenue from Site Services comes to $89,924.80 annually assuming a full 40 hour week for 49 weeks. For projection purposes we have chosen “hours” as the unit. The average sales price is $35.33. The average cost is $27.69.

5.2 Marketing Strategy

The marketing strategy, as explained in other chapters, is to leverage Comgate’s special CAD capability, as it relates specifically to custom woodworking, with design professionals (interior designers and architects) to increase the type of high-end work taken on, as well as to “jump” the bidding process by creating a situation in which Comgate must be given the bid. A good place to ask for the names of the interior designers with the best reputations is to speak to the designer workrooms. These are the workrooms that carry out the work connected with interior designers’ concepts for window treatments, fabrics, etc.

The best known of these workrooms in and around New Haven are:

• Fall Creek Sewing.
• Andrew Smith.
• Fortress Lines.
• Jones & Jones.
• S. Brandt & Company.
• Tapper Works.

A polling of these workshops indicates the following interior designers are often sought by trophy home owners:

** Names have been removed for confidentiality.

Architects are another important group of design professionals that work in concert with interior designers on trophy homes. The latest edition of the Directory of Architectural Firms in Connecticut is available to the members of the CSA. The directory lists 750 architectural firms in Connecticut. Details of each company are given alphabetically, including location and phone numbers as well as the type of work the firm specializes in. The back of the directory gives a listing based on areas of practice. The category of “Residential Work” lists about 300 firms. Although an architectural firm is likely to have work outside of the city where it is located, it would be a good start to find out which of those 300 residential architects are located in those areas of New Haven with the greatest concentration of trophy homes.

5.2.1 Positioning Statement

Comgate’s CAD capability is an especially strong marketing tool. It allows the mill shop to build the desired items using the most practical methods of construction without interfering with the design concept. It automatically calculates the exact dimensions of each element and produces exact material lists. These features allow simpler elements to be subcontracted to other mill shops, thus allowing the company’s productive capacity to be used to produce the higher end elements.

By pushing this capability with architects who have reputations for designing homes in the $3-$15 million bracket, Comgate will position itself to receive the gravy of this price-insensitive, recession-proof work, while at the same time building an image for the highest quality, most-challenging work.

5.2.2 Pricing Strategy

Simply stated, the goal of the bidding process is to price to get the job while still making an adequate profit. To facilitate this, a dual mark-up system has been developed. One mark-up for materials and another for labor. The reason for the separate mark-ups is that in custom woodwork the mix, or ratio, of material and labor changes with every job. Therefore, a system is needed that accommodates the variations. The system is fairly straightforward and uncomplicated and, once set up, it reduces the bidding process’ complexity. The system requires two separate overhead factors to be computed–an administrative overhead and a factory overhead.

Administrative Overhead The concept is founded on the belief that everything which is sold, whether goods or services, must pay its fair share of the administrative overhead. Whether we use material in manufacturing a product, or merely resell it as is without further processing, it should still make a contribution. So a multiplier factor is calculated and applied to everything sold including direct labor, plant-processed materials, “buy-outs” (out-sourcing to another mill shop), installations, etc.

The administrative overhead mark-up factor is arrived at by dividing the total administrative overhead expenses by the total of materials and direct labor. Appendix B shows the calculations based on expenses in 1999. Total administrative overheads were $123,821. Total direct labor and materials came to $324,495. The resulting .3816 translates into a multiplier factor of 1.3816. By applying this to everything sold it means that the company is setting aside 27.6% of every dollar to cover the cost of bidding, the cost of paperwork to execute the job, the cost of collecting the money, the cost of interest if the money’s late, etc.

Plant Overhead This mark-up is only applied to labor. It’s calculated by dividing plant overhead costs by direct labor. The resulting .837 when added to the .3816 (administrative overhead) builds to a multiplier factor of 2.218 (1.00 + .3816 + .837 = 2.218). The reasoning here is that an item sold that involves plant-processed labor should contribute to defray a portion of those plant overhead expenses (machinery depreciation, insurance, machinery maintenance, etc.) that would not be there if everything were merely sold without any value-added milling by factory millworkers.

With application of the above-described overhead factors, pricing is now reduced to calculating the total materials (including wastage) involved in a job, and projecting the labor input in hours needed to complete the job. Assisting in these calculations is a Job Costing Library which lists the actual materials and the actual labor input involved in similar past jobs. (See a sample section of the Job Costing Library in Appendix C.)

Performing the “take-offs” from blue prints and converting this to materials and labor hours needed to complete the job requires skill, but once this has been done, those figures can be passed on to an administrative assistant who can apply the overhead mark-ups to materials and labor. One can also check the latest prices of the materials as well as the up-dated all-in man-hour rates. (See Appendix D for a schematic of all-in wage rates.)

Up to this point in the pricing process all that we have done is to calculate the actual all-in costs of both materials and labor and added on formulas to cover overhead costs–both administrative and plant.  It is a necessary stage in the pricing process to plan in, and insist on, a profit margin. Although industry averages are less since averages include those suffering losses, successful woodworkers do attain a 15% sustainable net profit. Adding 15% to anticipated costs is not going to achieve a net 15% result (15 divided by 115 is only 13%). The best way is to divide total anticipated costs (after application of the two overhead factors) by .85.

To facilitate the costing/pricing, an Excel spreadsheet has been designed to incorporate the process including the two overhead factors as well as the 15% profit mark-up. Appendix E is a sample of the Costing/Pricing Work-up Sheet for a representative job. This spreadsheet also has a database capability. It allows the user to access statistics to facilitate material bulk purchasing, etc.

5.2.3 Promotion Strategy

With the introduction of an in-house CAD capability that is especially designed for the mill shop industry, the best way to spread the word is to directly contact the architects and interior designers. Only one or two trophy homes in the targeted $3-$15 million range can keep a mill shop fully occupied for months. Advertising is not expected to become necessary. However, joining the ASID and the CSA as an “Industry Partner” is an excellent way to network with design professionals. Also it would be helpful to get listed in the Resource Directories of each of these organizations.

5.3 Strategic Alliances

It is planned that Comgate will establish strategic alliances with several mill shops who will mutually profit from an association. Exact drawings and cut lists can be given to other mill shops when subcontracting the more mundane items, leaving the more challenging work for Comgate. Even the data on disk to program CNC equipment at the subcontracting mill shop can accompany the exact drawings, allowing a fast and accurate set up. Profits from work performed through these alliances has not been considered in preparing this business plan, but when the plan is updated in 2001, there should be enough historical experience with these alliances to include this aspect in projections.

5.4 Milestones

The table below outlines the strategic milestones for Comgate for the coming years.

Management Summary management summary will include information about who's on your team and why they're the right people for the job, as well as your future hiring plans.">

Like other mill shops with less than $1 million in sales, the owner of Comgate has had to wear several hats and shuttle back and forth between production, site visits, the office, and client calls. The company is in the process of making major strides in establishing a more classical managerial structure, as the following chapters will explain.

6.1 Organizational Structure

Ideally, the owner of the mill shop should have three major functions:

• Identify and find customers.
• Maintain proper balance of people, plant and machines.
• Innovate, and set policies.

A plant manager should be responsible to see that the production staff and the available machinery work together at maximum efficiency. He needs to anticipate questions, answer them, and keep production rolling with a minimum of waste and a minimum of down-time. The CEO is now doing that when he is available.

An office manager should handle all the administration and coordinate well between the plant manager and the CEO. A need for the plant manager is well recognized by management, but a certain financial position needs to be reached to afford him. This position is planned to start in April, 2001, which will help substantially to free up needed time for the CEO to carry out the above listed major duties.

The office manager has, until recently, been performing the bookkeeping. This has taken up too much of his time, plus he is not trained in accounting practices. It has taken until July to get tax filing done, and at a heavy cost in accountant’s charges. This has since been handed over to J&R Associates. Procedures have been set up which will serve as a beginning for a procedures manual. A courier is sent each week from J&R Associates to track all costs associated with a job. This is absolutely essential because without this reliable feedback, one can never be sure how accurate the job cost estimates are when putting together a bid. The handling of inventory is also dealt with in the procedures as well as paperwork flow to insure correctness in billing. A costing/pricing scheme has been devised to assure correct all-in costing and to insure that a fair profit margin is built in to the pricing.

The recent addition of a contract CAD man, has helped to ease the work load on the CEO, as there are fewer questions from production staff as a result of the very accurate drawings and cut lists.

6.2 Management Team

The management team, after the addition of the production manager in April, 2001, should be complete until a higher level of sales has been reached. At a level of approximately $1.5 million in sales, Comgate should add a project manager.

6.3 Management Team Gaps

At the present time, a production manager is needed. Without him, the CEO cannot devote enough of his time to CEO issues (see Chapter on Organization Structure). It would have been ideal to promote one of the production staff to that position, but none of the present four workers is suitable for the position. It is hoped that a production manager can be found by April, 2001. His salary and benefits have been provided for in the projections.

Another gap is project manager. The company needs to grow to be able to afford him. The project manager would follow everything from the point of “hand-off” (once the bid has been won) through conclusion. He would confer with architects, handle change orders, examine every facet: warranties, retainage, final payment, punch lists, access to premises, lifts and hoists, check everything. At the moment the CEO is doing this as best he can with the many other matters on his plate. The position of project manager becomes increasingly important when the company has multiple projects.

6.4 Personnel Plan

Milling Costs Personnel: As of the writing of this plan, sales orders are strong and all four production staff are expected to be fully employed on a 40-hour/week basis. For the period of January through September, an average monthly labor amount will be entered based on the totals from the financials as of the end of September. A production manager/project manager has been projected beginning April, 2001, at an annual salary of $60,000 (see Chapter on Management Team Gaps).

Sales and Marketing: Andrew Comins’s salary of $40,000 is entered here although he is general manager/owner. He will continue to wear several hats until a plant manager and a project manager can be found.

General and Administrative Personnel: The office manager, **Stacy Greer, earns $34,320 per year.

** Names have been changed for confidentiality.

Financial Plan investor-ready personnel plan .">

Due to initial losses, resulting in a need to resort to shareholder loans, cash flow pressures caused accounts payable to be stretched out to 30 days and more. The financial projections have reduced this to 10 days for the year 2001 and beyond, in hopes of filling this gap with increased bank lines of credit. This would allow the company to take advantage of trade discounts. Failing to do so is expensive, as it becomes the most expensive form of credit (approximately 36% p.a.).

7.1 Important Assumptions

Personnel Burden: The hourly basic wage rates were totalled ($241.73) as were the total after FICA, State Unemployment, FUTA and health benefits ($291.66). The difference came to 21%. The actual burden of 21.95% is from the September, 2000 financials.

Interest Rates: Looking at the various rates in effect (see Cash flow Section), 9% was taken as an average rate.

Payment Days: In order to show the cash flow effect we elected to assume 10 days so as to take advantage of all trade discounts. This change from 30 days to 10 days will take place in 2001. The cost of not taking the discounts is nearly 36% per annum. It is preferred to finance negative cash flow through bank lines of credit.

Collection Days: Collection days, after netting out down-payments with orders, average approximately 30 days.

Tax Rate: The tax rate reflects the present sliding scale:

7.2 Break-even Analysis

The break-even chart is not suitable for multiple custom woodwork items. However, if we use pilasters as an example, the unit price is $316.96 and the unit cost is $44.09 (material cost). If we assume that all plant labor is fixed, whether there is work for the staff or not, it would be necessary to produce and sell 136 pilasters per month. According to best estimates, one pilaster takes four man hours. With 8,000 man hours per year (666 man hours monthly) it is possible to produce 167 pilasters. So, to break even on pilasters alone it would be necessary to work at 81% of capacity.

If, instead, we take cabinets, and use a cost price of $57.66 per Linear Foot LF and a price of $194.76 per LF it would be necessary to produce 270 linear feet of cabinets monthly. At 1.65 man hours per LF, it would be possible to produce 404 linear feet. Break-even on cabinets needs 67% of capacity.

Doors (cope and stick) cost $130.53 per unit and sell for $592.35. Each door takes five hours to produce. It would require 80 doors to break even, out of a maximum capacity of 133 doors. This would be 60% of capacity to break even.

All other things being equal, based on the above analysis, it would be more profitable to produce doors than cabinets, and likewise more profitable to produce cabinets than pilasters.

In the calculations above, it has been assumed that there is no problem in keeping the six site carpenters working full time. The net profit from this activity has been deducted from fixed expenses. If, instead, we assume that the company makes no money on-site services, the monthly expenses would be $89,925 higher. In this case, it would take 96 doors monthly, rather than only 80, to break even.

7.3 Key Financial Indicators

As mentioned in the chapter on Company History, a more in-depth analysis of past performance is listed on an Excel spreadsheet in Appendix A. The top two rows summarize 1999 and 1998 financial sheet information in an easy to read format. These categories of information are then used to calculate important ratios to compare Comgate results will industry averages. The ratios have been organized into five main groups: Liquidity, Safety, Profitability, Balance Sheet, and Operations Management. Brief comments are made below concerning these ratio comparisons:

Liquidity: Liquidity decreased from 1.27 in 1998 to 1.19, due entirely to a large project on Orange. The large commercial contractor involved took far longer to pay than was anticipated. The project has since been completed and all outstandings have been settled. Despite the 1.19 current ratio for 1999, it is still superior to the average of 1.01 for all AWI members and fairly close to those members in the Northeast Region (1.24).

Safety: The debt-to-equity ratios have been calculated reflecting certain adjustments. Owner loans have been removed from long-term liabilities and placed into equity. The Debt/Equity ratio for 1999, of 11 to 1, is far higher than the average. It reflects the early start-up losses; however, the leverage improved remarkably from 1998, when it was 25 to 1.

Profitability: The gross margins are substantially higher than the average, which reflects the higher-end nature of the company’s work. Operating profit saw a healthy increase from 6.12% in 1998, to 9.67% in 1999. This is not as good as the operating results of the top 25% of AWI members (22.4%) but still more than double the margin for all AWI members (4.2%).

Balance Sheet: The ratio of Sales to Net Fixed Assets is a good measure of efficiency. Comgate’s ratio of 9.53 is not only a substantial increase over 1998, but is nearly equal to the top 25% of all AWI member results. Obviously the very high operating results to equity ratio merely reflects the narrow equity situation. The same can be said for the fixed assets to equity ratio. The A/R turnover (in days) as well as the A/P days turnover were slowed by the above-mentioned large Orange project. The low inventory days turnover reflects the proportionally lower material content of the high-end business.

Operations Management: The most remarkable ratio in this group of ratios is the very high percentage of non-plant produced sales to total sales. This reflects the revenue from outside on-site subcontracted carpenters and installers.

7.4 Projected Profit and Loss

Other Expenses (CoGS): There are several expenses that are included here:

• Shop supplies run about $300 per month.
• Fire insurance for machinery runs $209.55 monthly.
• Storage space rental costs $105 monthly.
• Factory rental is $1,958 monthly of which 90% ($1,762) is allocated to CoGS. The remaining $196/month is charged to General and Administrative expenses. Beginning in January, we assume a doubling of rental space will be made available at a monthly cost of $2,000.
• Repairs and maintenance comes to about $272 per month.
• The company truck costs approximately $200 monthly.
• Utilities (electricity, waste removal, and security) come to $267 monthly. They are applied 90% to plant ($240 monthly).The other 10% ($27 monthly) is charge to General and Administrative expenses.
• Take-offs and listing, the CAD contract employee, costs $70/hr and works 35 hours weekly. Most of this expense (60%) can be charged to the client and is a wash. The remainder ($49,000) is split 60% for Plant ($29,400) which is $2,450/month starting in September 2000.
• The remaining $19,600 is charged to General and Administrative expenses.

These CoGS expenses come to to $3,088.55 (January-August) and $5,538.55 per month after August, 2000. Beginning January, 2001 the total grows to $7,538 due to the increased space and rent.

Sales and Marketing Expenses:

• Advertising and promotional expenses have not been projected because production is now at 100% capacity and is expected to stay that way due to the marketing strategy of approaching designers and architects directly, stressing the company’s CAD strengths.

General & Administrative:

• Bank charges of $40 monthly.

7.5 Projected Cash Flow

Fixed Assets:

In the first nine months of 2000, $110,412 was added in new machinery and equipment.

Increase (decrease) Other Liabilities:

At the end of 1999, there was $49,884 outstanding in shareholder loans. After netting out loans due from shareholders amounting to $20,396, loans from shareholders were reduced by $8,126.23. No further changes in years 2001 and 2002.

Change in Other Short-term assets:

At the end of 1999, there were only $1,465 in other short-term assets. This has been increased due to pre-paid insurance, and reflected in April, 2000 of $2,855. No change in 2001 or 2002.

Long-term Borrowing (repayment):

• Applebee Leasing extended a secured loan in July to purchase fixed assets. This loan is repayable in 36 equal monthly installments of $1,816.07. A schedule is not available with breakdown of principle and interest. Assume principle repayment of $6,000 during 2000 $18,000 during 2001 and $24,000 during 2002.
• Due to a change in ownership from Fleet Bank to Chase Bank, there has been some confusion as to the amounts of various loans. The borrower’s understanding of facilities is:
• $50,000 line of credit (fully outstanding) @ 2% over prime, about half of a seven-year term-loan (originally $64,000 in September, 1996) being repaid monthly at $1,268.80 (interest@ 8.25% and principle), and the remainder of a five-year term loan (originally $20,000 as of June, 1999) being repaid $437.90 monthly (interest @ 11.15% and principle).
• Based on interim financial statements as of September, 2000, $10,974 of the term loans have been repaid since the end of 1999. We will assume principle repayments of $1,200 monthly throughout 2000, 2001, 2002, until this confusion has been clarified.

7.6 Projected Balance Sheet

The following table represents Comgate’s balance sheet.

7.7 Business Ratios

The table below shows some of the more important ratios. The table also includes business industry data for Standard Information Code (SIC) 2541, wood partitions and fixtures.

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Construction Business Plan Template

Written by Dave Lavinsky

Construction Business Plan

You’ve come to the right place to create your construction business plan.

We have helped over 100,000 entrepreneurs and business owners create business plans and many have used them to start or grow their construction companies.

Sample Construction Business Plan Outline

Below is a construction business plan example to help you create each section of your own construction business plan:

Executive Summary

Business overview.

VB Residential Construction Company is a startup construction company located in Milwaukee, Wisconsin. The company is founded by two cousins, Victor Martinez and Ben Schmidt. Together they have over 20 years of experience in constructing homes from design concept, remodeling and renovating homes. They are highly skilled in all aspects of construction and have garnered a positive reputation in the local construction community for their ethical practices and competitive skill set. Now that Victor and Ben have an extensive network of clients and contacts, they have decided to begin their own residential construction company.

Product Offering

The following are the services that VB Residential Construction Company will provide:

• Custom home building/design build
• Home remodeling and renovation
• Project Management
• Kitchen and bath construction

Customer Focus

VB Residential Construction Company will target those individuals and industry professionals requiring home construction services in Milwaukee, Wisconsin. Those individuals are landowners looking to develop homes on their lots, architects who have clients needing homes built, developers who have the vision but need a company to make it a reality, and households needing home remodeling services.

Management Team

VB Residential Construction Company will be led by Victor Martinez and Ben Schmidt. Together they have over twenty years of construction experience, primarily in residential builds, remodeling, and renovation. They both started at a young age working and learning from their fathers. When they graduated from high school, their fathers got them jobs at the construction company they were employed at. The four family members worked together for ten years at the construction company. The fathers recently decided they were going to retire from the industry which prompted Victor and Ben to branch out on their own and start their own residential construction company.

Success Factors

VB Residential Construction Company will be able to achieve success by offering the following competitive advantages:

• Friendly and knowledgeable contractors who are able to take any project from concept to reality.
• Unbeatable pricing – Clients will receive the best pricing in town for services on any project while maintaining the best quality and customer satisfaction.

Financial Highlights

VB Residential Construction Company is seeking $200,000 in debt financing to launch its construction business. The funding will be dedicated towards securing a small office space, purchasing two trucks, and purchasing all the construction equipment and supplies. Funding will also be dedicated towards the advertising agency and three months of overhead costs to include payroll of the staff, rent, working capital, and monthly fees to the accounting and human resources firm. The breakout of the funding is below:

• Trucks: $40,000
• Construction equipment, supplies, and materials: $100,000
• Advertising agency in charge of promotions: $10,000
• Three months of overhead expenses (rent, payroll, HR and accounting firms): $40,000
• Working capital: $10,000

Company Overview

Who is vb residential construction company.

VB Residential Construction Company is a newly established contracting company located in Milwaukee, Wisconsin. Founded by cousins, Victor Martinez and Ben Schmidt, they have over 20 years experience in the construction industry. VB specializes in residential remodeling, kitchen and bath construction, as well as custom home building. VB Residential Construction Company also offers residential design, construction, and project management services. VB prides itself in delivering a level of expert craftsmanship to fulfill the vision for the client while exceeding expectations at exceptional value.

Company History

VB comes from the initials of the owners, Victor Martinez and Ben Schmidt, two cousins who have been working in the construction industry most of their lives. Both of their fathers spent decades as contractors and raised their sons working and learning the construction trade. The four have been working for another residential contractor in Milwaukee and have built and remodeled numerous homes for multiple builders and clients. Now that both of their fathers are retiring from the construction industry, Victor and Ben have decided to start their own residential construction company and use their years of experience, expertise, and contacts to be an independent residential contractor.

Since incorporation, VB Residential Construction Company has achieved the following milestones:

• Registered VB Residential Construction Company, LLC to transact business in the state of Wisconsin.
• Located a small office space to have a physical address for the company as well as a receptionist.
• Reached out to their numerous contacts to include real estate agents, developers, architects, and landowners to advise them on their upcoming construction company in order to start getting construction contracts.
• Began pricing out costs for trucks and necessary construction equipment.
• Began recruiting a team of contractors that cover different areas of construction to include mechanical, plumbing, electricians, and roofing.

The following will be the services VB Residential Construction Company will provide:

Industry Analysis

Revenue for the Construction industry is expected to continue growing over the five years as demand for new housing expands. Revenues are expected to reach $107 billion.

Relatively low interest rates, coupled with rising per capita disposable income, is expected to support individual investment in new homes, providing an opportunity for industry revenue growth over the next five years.

Per capita disposable income is expected to rise steadily over the next five years, while concurrently, unemployment will drop, proving favorable conditions for industry growth.

Housing starts are expected to rise an annualized 2.9% and this growth is projected to stem partly from forward-looking consumers that choose to purchase homes while interest rates are low. Relatively low housing stock and relatively low interest rates are expected to lead demand for industry services to increase over the next five years.

Customer Analysis

Demographic profile of target market.

The precise demographics for Milwaukee, Wisconsin are:

Customer Segmentation

VB Residential Construction Company will primarily target the following customer profiles:

• Households in search of home remodeling services
• Landowners who would like to build homes on their lots
• Architects who have clients that need home building or remodeling services
• Developers who have already partnered with landowners and/or architects and are in search of a residential contractor

Competitive Analysis

Direct and indirect competitors.

VB Residential Construction Company will face competition from other companies with similar business profiles. A description of each competitor company is below.

JM Remodeling

JM Remodeling has been in business in Milwaukee, Wisconsin since 1990. They are a full-service design and build company. JM Remodeling specializes in residential and commercial restoration and renovation including custom carpentry, kitchens, bathrooms, roofing, siding, dormers, additions, home gyms, home offices, porches and decks, and mechanical services. JM Remodeling carries a staff of plumbers, electricians, journeymen carpenters, restoration specialists, roofers, siders, sheet metal workers, and expert estimators. JM Remodeling also has an apprenticeship program to train employees within the company. They are licensed, bonded and insured and also part of the National Association of Remodeling Industry (NARI). JM Remodeling also provides warranties on all their services. The work is guaranteed by labor warranties, factory warranties, and extended warranties.

Cream City Construction

Cream City Construction has more than 50 years experience in home design, remodeling and renovation in the Greater Milwaukee area and Southeastern Wisconsin. The home remodeling services they provide are additions, whole house remodeling, kitchens, bathrooms, lower levels, master suites and historic renovations. Cream City Construction is a design build company that works with the client to create the design plans, generate project costs, and build the project.

Cream City Construction is owned and managed by Todd Badovski and Jim Grote. Together they have decades of experience and have spent years refining the skills required to run a high end, quality driven remodeling company. The majority of their projects come from repeat business or referrals from clients delighted with their previous service. Cream City Construction is also a member of the National Association of Remodeling Industry (NARI) as well as the Historic Milwaukee Incorporated.

Sazama Design Build Remodel, LLC

Former restaurant owner Don Sazama established Sazama Design Build Remodel, LLC in 1987 after becoming a Master Carpenter. He wanted to merge his passions of business and design and expand his skills in carpentry and architecture. Don’s firm has completed over 700 homes and won 11 awards from the Milwaukee Home and Living magazine. Sazama Design Build Remodel builds homes that are modern and luxurious and have completed many large remodels of bathroom and kitchen renovations. Sazama likes to collaborate with firms such as Ivy Interiors and an award-winning landscape designer, Gingko Leaf Studio. Sazama Design Build Remodel can build and design all aspects of a home – from a home office, outdoor entertaining area, serene spas, and inviting kitchens. The team at Sazama is able to do a historic renovation, build or renovate into something modern and posh, or keep it traditional.

Competitive Advantage

VB Residential Construction Company will be able to offer the following advantages over their competition:

Marketing Plan

Brand & value proposition.

VB Residential Construction Company will offer the unique value proposition to its clientele:

• Highly trusted and professional contractors with over 20 years of experience remodeling, renovating, and building homes.
• Unbeatable pricing to its clients – VB Residential Construction Company does not mark up its services at a large percentage. They will offer the lowest prices in town.

Promotions Strategy

The promotions strategy for VB Residential Construction Company is as follows:

Word of Mouth/Referrals

Victor and Ben have built up an extensive list of contacts over the years providing home construction services for numerous highly satisfied clients. Most of the clients are repeat customers and have also referred them to other associates for home projects. These referrals and repeat customers are very likely to use VB Residential Construction Company instead of the previous construction company Victor and Ben were employed at.

Professional Associations and Networking

VB Residential Construction Company will become a member of construction and professional associations such as the National Association of Remodeling Industry (NARI) and the Milwaukee Chamber of Commerce. VB will also become a member in associations where other builders, developers, and architects are a part of. They will focus their networking efforts on expanding their client network.

Print Advertising/Billboard

VB Residential Construction Company will invest in professionally designed print ads to display in programs or flyers at industry networking events. They will also invest in two billboards to display in highly trafficked areas of town.

Website/SEO Marketing

VB Residential Construction Company will utilize the same advertising company that designed their print ads and billboards to also design their website. The website will be well organized, informative, and list all their services that VB is able to provide. The website will also list their contact information and a gallery of pictures that show their previous projects. The advertising company will also manage VB’s website presence with SEO marketing tactics so that anytime someone types in the Google or Bing search engine “Milwaukee residential contractor”, “contractor near me”, or “residential contractor near me”, VB Residential Construction Company will be listed at the top of the search results.

The pricing of VB Residential Construction Company will be moderate and on par with competitors so customers feel they receive value when purchasing their services.

Operations Plan

The following will be the operations plan for VB Residential Construction Company.

Operation Functions:

• Victor Martinez and Ben Schmidt will be the owners and managers of the company. They will oversee all staff, contractors, and subcontractors. They will also act as project managers for every job they receive and handle all pricing and bids to the client.
• Victor and Ben will employ a team of contractors under them that will have an array of skill sets. The contractors will be trained and experienced either in plumbing, mechanical, electrical, roofing, or siding. Not all contractors need to be certified in all trades, but they need to be certified in at least one of the trades.
• Office manager/assistant to be located at the small office. This person will handle all incoming calls, assist with visiting clients, bookkeeping and maintain files.
• Victor and Ben will utilize a third-party human resources company to handle all hiring, onboarding, payroll, and benefits for the staff. The HR company will also handle all employee issues.
• Victor and Ben will also pay a third-party accounting firm to manage all the high level accounting and tax payments.

Milestones:

VB Residential Construction Company will have the following milestones complete in the next six months.

3/1/202X – Finalize contract to lease small office space

3/15/202X – Execute advertising agency contract 4/1/202X – Begin networking and placing bids for construction jobs

5/1/202X – Begin recruiting and hiring team of contractors

5/15/202X – Purchase all necessary construction equipment, supplies, and trucks

6/1/202X – Start on first official job as VB Residential Construction Company

Victor and Ben are highly skilled at project management and residential construction. They are also both certified in plumbing, electrical, and mechanical. In the next few years, they will be certified as Master Carpenters.

Financial Plan

Key revenue & costs.

The revenue drivers for VB Residential Construction Company are the upcharge they will charge to the clients for their services. VB will purchase or subcontract a service at cost and will charge a 15% markup in order to obtain the markup fee. 15% is below the normal 25%-30% that other competing residential contractors charge.

The cost drivers will be the overhead costs required in order to maintain a construction company. The expenses will be the costs to purchase and maintain construction equipment and trucks, payroll and overhead costs for the staff, and rent and utilities. Other expenses will be the cost for the advertising agency, accounting firm, human resources firm, and membership association fees.

Funding Requirements and Use of Funds

VB Residential Construction Company is seeking $200,000 in debt financing to launch its construction business. The funding will be dedicated towards securing a small office space, purchasing two trucks, and purchasing all the construction equipment and supplies. Funding will also be dedicated towards the advertising agency and three months of overhead costs to include payroll of the staff, rent, and monthly fees to the accounting and human resources firm. The breakout of the funding is below:

Key Assumptions

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Initial Monthly Average Contract Amount: $20,000
• Growth in Average Monthly Contracts: 10%

Financial Projections

Income statement.

Balance Sheet

Cash Flow Statement

Construction Business Plan FAQs

What is a construction business plan.

A construction business plan is a plan to start and/or grow your construction business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can  easily complete your construction business plan using our Construction Business Plan Template here .

What Are the Main Types of Construction Companies?

Construction companies can be classified according to the type of constructions that they perform. Some are small renovation contractors, others are new home builders and others are commercial construction companies.

What Are the Main Sources of Revenues and Expenses for a Construction Company?

Construction companies get their primary source of revenue from individual contracts for new homes, remodeling projects or commercial projects.

The key expenses for construction companies are office space rent, salaries and wages, and equipment costs. 

How Do You Get Funding for Your Construction Business Plan?

There are many options for financing a construction company like SBA loans, commercial loans, personal loans, or line of credit. There are also equipment funding opportunities that cover expenses associated with necessary tools, machinery and other equipment. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Construction Business?

Starting a construction business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Construction Business Plan - The first step in starting a business is to create a detailed construction business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your construction business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your construction business is in compliance with local laws.

3. Register Your Construction Business - Once you have chosen a legal structure, the next step is to register your construction business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your construction business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Construction Equipment & Supplies - In order to start your construction business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your construction business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful construction business:

• How to Start a Construction Business

Where Can I Get a Construction Business Plan PDF?

You can download our free construction business plan template PDF here . This is a sample construction business plan template you can use in PDF format.

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Remodeling Business Plan Template

Published Dec.21, 2020

Updated Apr.24, 2024

By: Noor Muhammad

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Table of Content

Remodeling business plan for starting your own building company

Whether it’s about increasing one’s property value or boosting one’s lifestyle, remodeling is the way to go. Remodeling is a type of business that can be started with simple services at the residential level. And can be expanded to performing complicated renovations needed by commercial buildings and businesses.

No matter how large or how small your startup is, you would have to create a remodeling business plan for remodeling. Creating a comprehensive business plan before you open a remodeling business will help you in:

• Recognizing the latest trends
• Acquiring the right expertise
• Avoiding troublesome situations
• Efficiently manage finances

To help you in creating a business plan that covers all the essential aspects, we’re providing a sample business plan of a startup ‘Model-It Solutions’.

Executive Summary

2.1 the business.

Model-It Solutions will be a registered, licensed, and insured remodeling business startup based in Buffalo, New York. The business will comprise expert contractors, architects, and engineers to enhance the aesthetic and comfort level of residential as well as commercial structures.

Simply put, we build what you dream!

2.2 Management of Remodeling business

As a business owner, you can’t rest after setting up a remodeling company. You have to be proactive in organizing and analyzing various business operations. In the case of a remodeling business, you need efficient management to complete given projects in time. To make sure that clients get the work done according to their expectations, you have to properly manage communication, finances, and resources among various channels.

2.3 Customers of Remodeling business

Exploring who are going to be your customers is extremely important. Before you search for how to start a remodeling company, you should identify your customers.

The target customers of Model-It Solutions will be the homeowners, construction firms , contractors, and government agencies. To turn them into our potential customers, we will be taking effective steps.

2.4 Business Target

Our major targets are:

• To maintain a customer return rate of 20% throughout our service years
• To maintain a CSAT score of above 85%

Our financial targets to cover our expenses and investments through the profits earned are summarized in this table.

Company Summary

3.1 company owner.

Anna Huston will be the owner of Model-It Solutions. Anna is an MBA. After completing her education at Stanford University, she started working in Skanska.

But 5 years into the service, she decided to start a remodeling business of her own.

3.2 Why the remodeling business is being started

Anna always remained a woman of creative ideas. After serving in a multinational firm, she decided to move to her hometown and serve people with her talent. She realized that the remodeling business has never-ending scope in the years to come as people keep thinking of bringing improvement to their property.

3.3 How the remodeling business will be started

Step1: Plan your business

As the first step, Anna studied various business plan examples for remodeling company to make a business plan for remodeling. From analyzing the market shares to creating a financial plan, Anna put everything on her business plan.

Through this remodeling business plan sample you can study the business’ requirements, balance sheets, personnel plan, and other aspects of Model-It Solutions.

Step2: Define your brand

The second step after creating a remodeling business plan is to get your business registered. You will have to acquire the required licenses and permits. Moreover, this is the time when you have to physically establish your business office.

Step3: Hire the staff

The third step is to conduct interviews and tests to hire the most competent employees.

Step4: Get ready to promote & market

The next step is to promote your services and competitive aspects to reach your target customers. This step also involves the strategy you will adopt to gain and retain your client base.

Step5: Establish a web presence

In this age, people use Google to find the right service provider whenever they need any service. Therefore, it has become essential that you establish a strong social media and web presence.

Anna decided to hire a professional IT expert to create a website for Model-It Solutions. The website will also enable users to make online bookings. Moreover, the website will also keep a record of repeat customers so that Anna could evaluate her business performance time-to-time.

Our startup expenses including costs of all the things we could need for the startup are given below:

Before exploring how to start your own remodeling business, you should decide your services. Deciding your services even before the launch can help you in identifying the ways through which you can facilitate your customers.

To give you a notion of services you can provide as a remodeling firm, we are enlisting the services provided by Model-It Solutions in this remodeling business plan template.

• Full House Remodeling: Our primary service will be to do the whole house remodeling. In this, we will work to redesign an old building to fulfill modern needs such as increasing the living space or making the interior/ exterior more appealing.

Depending on the clients’ needs we will remodel their kitchen, laundry, bath, deck, and more. We also install sidings, flooring, new windows and doors, cabinets, and whatever else our customers would need.

• Handyman Remodeling: This service will include doing minor changes in homes such as installing a modern lighting system, carpeting, painting the walls and cabinets, installing wallpapers, and doing small repairs.
• Historic Home Remodeling: Our third service will be to remodel historic and significant architectural buildings without affecting their historic aspects.
• Individual Structural Re-design: We will offer the services of adding/ removing the bathroom, room, kitchen, and laundry, installing a staircase, modern roofing, etc.

Marketing Analysis of Remodeling Business

Marketing analysis is an important part of a remodeling contractor’s business plan as it enables the business owner to keep pace with the demands of their customers. Through efficient marketing analysis, you can recognize remodeling domains that have high demand. Moreover, this part also gives you a clear idea of your customers before you open a remodeling business.

5.1 Market Trends

According to a report by IBISWorld, remodeling businesses have seen a growth rate of 1.7% in the past five years. More than 455 thousand remodeling companies are operating throughout the United States. The market size, according to the same outlet, is reported to be $97 billion.

The market stats are quite satisfying and the growth rate also indicates that there is still room for other startups to join the venture. If you want to ensure that you get customers from the very beginning of your startup, you should study the market trends of individual locations. That will help you locate an area where competition is low and people who need remodeling service are greater in number.

5.2 Marketing Segmentation

Identifying your customers before investigating how to write a business plan for remodeling is necessary. Dividing the wide populations into distinct groups can help you in recognizing their demands. And thus enabling you to plan ways to fulfill their expectations.

The groups that were identified by Model-It Solutions as potential customers are given below:

5.2.1 Real Estate Owners: Our primary customers will be the people who own any sort of building. They can need our services in two cases:

• They want to enhance the interior design / exterior for themselves.
• They want to remodel the property to increase its value so that it could be sold at a greater price.

In any of the cases, we’ll go to all extents to make sure they are happy and satisfied with our remodeling services. For them, we’ll provide full property remodeling services as well as individual services like installing new cabinets and remodeling the kitchen, etc.

5.2.2 Contractors & Construction Companies: The second group of our target customers will include contractors and construction companies. They will need our services whenever they get some project or even when they are building some structure from scratch.

5.2.3 Government Agencies : Our third category comprises government agencies who will be needing us to remodel structures of historic, artistic, and cultural importance – in a way that their integrity and historic aspects are maintained.

The detailed market analysis of our potential customers is given in the following table:

5.3 Business Target

Anna set her business financial and other goals before starting a remodeling company. She realized that by doing so, she would be able to provide a direction to her resources and talent.

The business targets of Model-It Solutions are

• To earn a net profit of $24k per month by the end of the first year
• To lower the costs of our operations by 5% by the end of the 3 years by improving our techniques and methods

5.4 Product Pricing

The prices of our services will be lesser than those of our competitors. It is because we want to capture as many customers as possible in the initial phases of our startup.

Marketing Strategy

A remodeling business plan is incomplete unless you include in it, the ways to capture the attention of your target audience. In this marketing plan for remodeling business we are enlisting the exclusive sales strategy plan of Model-It Solutions.

6.1 Competitive Analysis

Anna realized that hundreds of remodeling firms are already operating in Buffalo. Therefore, she decided to come up with distinct features to outperform her business rivals.

The competitive aspects of Model-It Solutions are:

• We are highly client-oriented. We will always be willing to amend the remodeling designs as per our clients’ wants and needs.
• Our workers are highly skilled and highly collaborative.
• We provide online booking and payment facilities to our customers.
• Our repeat customers will be offered several discounts.
• Our prices are lower than our competitors, so you can easily try our services for a minor/ major task.

6.2 Sales Strategy

To get introduced to our target customers, we will:

• Advertise our startup through local newspapers, Google Local ads service, and social media
• Keep our prices lower than our competitors
• Establish a strong web presence using SEO techniques
• Provide a 25% discount to our repeat customers on every second visit

6.3 Sales Yearly

6.4 Sales Monthly

6.5 Sales Forecast

Personnel plan

While writing a business plan for remodeling, you should also define your employees, their job responsibilities, and requirements. It will enable you to judge the applicants on a definite criterion when you are going through the hiring phase.

7.1 Company Staff

Anna will manage the business herself. However, she’ll hire the following staff:

• 1 Co-Manager
• 1 Architect to design/ remodel complicated projects
• 2 Contractors to implement remodeling designs
• 5 Field Workers to work as laborers
• 1 Accountant to maintain financial records
• 1 Technician to maintain the machinery
• 1 IT Expert to manage the company’s website, online record, and social sites
• 1 Driver to provide transportation

7.2 Average Salary of Employees

Financial Plan

In the last part of your business plan, you should analyze your estimated cash flows. Before you make a remodeling business plan, you should have a clear idea of how much amount you intend to spend on which aspect of your business. Moreover, you should also have a plan to achieve your business goals by optimizing your profits.

In this business plan sample, you can explore the financial projections, break-even analysis, business ratios, gross margins, and other financial estimations done by Model-It Solutions to gauge its progress and business value.

However, while you go through this financial plan, remember, its projections are based on the assumption that there will be no major recession in the coming 5 years.

8.1 Important Assumptions

8.2 Brake-even Analysis

8.3 Projected Profit and Loss