Starting a remodeling business is easy. Growing the business and keeping it going is where the real trouble starts. Up to 93% of small and medium-sized businesses struggle with consistent growth.
What is business growth anyway?
Growth could mean different things for your remodeling business, such as:
- Increase in sales and profits
- More remodeling customers
- Higher capacity for remodeling jobs
- Wider range of home improvement and remodeling services
In a nutshell, business growth means increasing the scale, size, or success of your enterprise. The question is, how do you go about growing your business?
We have just the answer.
This article is a comprehensive guide on how to grow a remodeling business. Read on and learn how to overcome common growth hurdles in the remodeling industry. We’ll also discuss 15 proven strategies to grow a remodeling business.
Common Challenges Faced in the Remodeling Industry
Every entrepreneur aspires to grow their business. However, growing a contracting business often proves challenging, even for seasoned contractors. In some cases, growth strategies backfire, leaving the business worse off than before.
Let’s look at common growth challenges in the remodeling industry.
Fierce Competition
There are over 780,000 remodeling businesses in the US. And if history is any indication, that number will only go up.
That means the remodeling market is highly saturated. Plus, DIY home improvement projects have really taken off since the COVID-19 pandemic. Nearly half (43%) of Americans planning home renovations in 2024 will do it themselves.
Such figures should give you an idea of the competition pressure remodelers face. Competition can, and does, impede business growth.
To grow your business, your brand must stand out from the crowd. Also, it must demonstrate tangible value in the remodeling market. This all comes down to the effectiveness of your marketing efforts and how you relate with customers.
RELATED ARTICLE: 2023 Home Improvement Industry Trend Report: A Recession (?)
Financial Hurdles
Cash flow management is a common problem for SMBs, not just remodelers. According to CB Insights, “running out of cash” is the number one reason startups fail.
You obviously need cash to keep the business afloat. On top of that, you’ll need more money to grow the business. The extra money has to come from somewhere.
Unrealistic Goals for Business Growth
How far and how quickly do you want to grow the business? This might seem trivial, but it could make all the difference between failure and success.
Businesses that try to grow too fast often burn out along the way. For instance, you can’t double your workforce without enough remodeling jobs to justify that growth. Also, you shouldn’t base such growth on far-off expectations.
It’s great to be optimistic. But as an entrepreneur, always ground your optimism. Set realistic and achievable growth goals. More so, aim for gradual, sustainable, and organic growth.
Trouble Finding Good Employees
Good help is so hard to find nowadays. The construction industry as a whole is short 500,000 workers. In a survey by the Associated General Contractors of America and Autodesk, 88% of contractors said they were having trouble filling trade positions.
Growing a remodeling business involves increasing the job capacity. You can’t do that when you are short of labor.
Material Shortages
Remodelers rely on construction materials such as lumber, steel, and concrete. However, the availability and prices of these materials are not set in stone.
For instance, in recent times, we’ve seen acute lumber and cement shortages across the country. Naturally, this scarcity led to extreme price hikes and instability in the remodeling space. Such fluctuations stand in the way of business growth.
Poor Business Planning
Growing a remodeling business calls for strategic planning. A solid business plan is your roadmap to successful business growth. Failing to plan is planning to fail—it’s that simple.
A good business plan must contain the following:
- Business goals and objectives
- Competitor analysis
- Revenue strategies
- Requirements for business growth (cash, infrastructure, workforce, etc.)
- Marketing initiatives
- Threats and opportunities in business growth
FROM ONE OF OUR PARTNERS: 7 Steps for Creating a Remodeling Business Plan
15 Best Tips to Grow Your Remodeling Business
Anxious to take your remodeling business to the next level?
You’ll need a solid growth strategy to stand out from the competition, attract more customers, and rake in more revenue. It takes a combination of various approaches to grow a business successfully.
Here are 15 strategies on how to grow a remodeling business. For easier reading, we’ve grouped the strategies into three main categories.
Marketing Strategies
Grow your remodeling business by expanding your customer base. This means generating new leads, spreading brand awareness, and targeting the right audience.
FROM ONE OF OUR PARTNERS: 12 Ways to Find New Customers (No Marketing Budget Needed)
1. Launch a Remodeling Business Website
Launching a branded website is a great way to boost your online presence. A website also provides a platform to engage and communicate with customers.
Additionally, if well-optimized for local SEO, the site could help you leverage online searches for remodelers in your area. Keep in mind that a majority of consumers browse the internet in search of local businesses.
2. Claim your Google Business Profile
Google Business Profile (GBP) is a free online directory for local businesses. Once listed, your business becomes eligible to appear in search results. This could be for remodeler-related queries in your area. The profile also tells customers how to find and contact you.
Another useful GBP feature is genuine customer reviews. Customers can write reviews on your profile. Google reviews reinforce social proof—which is crucial for building customer trust.
3. Get on Social Media
With over 5 billion users, social media is a powerful marketing medium. Business profiles on social media enable you to reach and engage potential customers. They also showcase your remodeling services and expertise to the relevant audience.
4. Start Emailing Campaigns
Email marketing is one of the most effective ways to generate and nurture remodeling leads. Emailing also lets you personalize customer engagement. It’s an easy way to speak directly with prospects and customers at the individual level.
5. Buy Local Services Ads
Google’s Local Services Ads help service-based businesses reach the right audience. They present your business to people looking for remodeling professionals in your service area. The beauty of Local Services Ads is that you pay per lead.
Client Relationship Management
Excellent customer experiences encourage repeat business and word-of-mouth marketing. How you relate with customers matters a great deal.
6. Provide Excellent Customer Service
Do you want to keep customers happy? Go above and beyond with customer service.
First, be sure to offer professional remodeling services. Second, be transparent, communicative, positive, kind, and respectful. Doing that will grow your reputation as a caring remodeler.
7. Encourage Customer Feedback
Encourage your customers to air their views and opinions about the business. Listening to your customers can help the business grow.
Besides building social proof, customer feedback is a source of valuable business insights. Customers can tell you what you’re doing right and what you’re getting wrong. Leverage customer feedback to improve and grow your remodeling business.
8. Create a Referral Program
An RRD survey found that 55% of consumers learn about a new brand, product, or service via word-of-mouth marketing. Customers trust referrals and recommendations more than any other form of marketing.
Leverage the power of word-of-mouth marketing by creating a referral program. Doing so turns your customers into strong advocates for your brand.
9. Utilize Tech Tools
Having the right tech tools to run your remodeling business will help keep operations organized and provide a good customer experience. These tools can include CRM software, fleet management software, and accounting programs.
The right tech tools allow you to access the data you need to pull the right growth levers when you need them.
RELATED ARTICLE: Contractor CRM: Your Ticket to Enhanced Productivity and Profitability
10. Keep in Touch with Customers
Keep your customers close, especially after completing a remodeling project. Check up on them via email or phone call. Ask them how they feel about the remodel and follow up on any unfinished business.
Staying in touch makes customers feel valued and cared for. That way, they are more likely to hire you again and tell others about your business.
Business Expansion
Expansion is a big part of business growth. It’s all about scaling your capacity to handle more remodeling projects.
11. Hire More Skilled Workers
A larger crew can take on more remodeling work. It could also mean completing projects on time, which is always a win for customer service.
Also, hiring more skilled workers diversifies the labor pool. You can more easily allocate tasks based on each worker’s talents and abilities. The result is a more efficient workforce doing high-quality remodeling work.
12. Acquire More Remodeling Tools and Equipment
If you’re going to hire more workers, you’ll probably need more remodeling tools and equipment too. Like a larger crew, more equipment expands your contracting capacity. You can have multiple projects running simultaneously without worrying about resources.
Ultimately, this type of expansion leads to revenue and investment growth.
13. Diversify Your Service Offering
Increasing your services portfolio is a form of business growth. For one, it widens your market scope. Two, it opens new revenue channels.
So, research the market to find the most in-demand home remodeling services missing in your portfolio. Then, add those services to your offering.
14. Branch into New Markets
If you’ve already dominated your service area, it’s time to explore other locations. Sometimes, branching out is a way to escape or relieve competition pressure. A nearby town or neighborhood might have a higher demand for remodeling services and have fewer remodelers.
15. Partner with Suppliers and Other Contractors
Forge mutually beneficial partnerships with suppliers and other contractors. With supplier partnerships, you might get perks such as discounts, credit, and supply priority.
Meanwhile, contractor partnerships mostly revolve around referral trading. You can have plumbers, electricians, and landscapers recommending your remodeling business to their customers. Also, partnering with other remodelers can diversify your portfolio and give you access to new markets and resources.
FROM ONE OF OUR PARTNERS: A 5-Step Guide to Annual Planning for Your Business
Top Takeaway Tips for Growing Your Remodeling Business
Ready to get started growing your remodeling business? Here are out takeaway tips to get started today:
- Define what “growth” means to your remodeling business.
- Understand the opportunities and risks in growing your business.
- Set realistic and achievable goals for business growth.
- Draft a solid business growth plan tracing a path toward your goals.
- Implement multiple growth strategies (marketing, customer relationship management, and expansion).
- Use the right tech tools to keep your business operations running smoothly.