Remodeling Business Plan Template

Written by Dave Lavinsky
remodeling business plan template
Table of Contents
Table of Contents

Remodeling Business Plan Template

If you want to start a remodeling company or expand your current remodeling services, you need a business plan.

The following remodeling business plan template gives you the key elements to include in a winning plan. Successful business plans will also include market research, which will help you better understand the remodeling industry, trends, and your target market. It will also help you understand your potential competitive advantage, as well as craft your marketing plan and financial plan.

You can download our Business Plan Template (including a full, customizable financial model) to your computer here.

 

Remodeling Business Plan Example

I. Executive Summary

Business Overview

[Company Name] is a new residential remodeling business located in [Location]. We can remodel any part of a home, including bathrooms, kitchens, interiors, and exteriors. We also provide services to update homes so that homeowners can age in place safely. [Company Name] strives to be the best remodeling business in the area, focusing on customer service and maintaining long-term relationships.

At [Company Name], we believe that every customer deserves to live in their dream home. Our expert contractors will work with customers to design and create the perfect spaces that will make their current home their dream home. With [X] years of experience, we can take on any remodeling project and create any space that our customers desire.

Services Offered

[Company Name] offers a variety of residential remodeling services. Some of these services include:

  • Kitchen and cabinetry remodeling
  • Bathroom remodeling
  • Interior remodeling
  • Roof remodeling
  • Exterior remodeling
  • Whole house remodeling
  • Aging-in-place remodeling

Customer Focus

[Company Name] will primarily serve homeowners living within a 30-mile radius of our centrally-located office. The community of [Location] has a large number of aging homes in need of updates and remodeling services. The demographics of this area are as follows:

  • 85,023 residents
  • 42% married
  • 35% with children under 18
  • 55% homeowners
  • Median age of 39

Management Team

[Company Name] is led by [Founder’s Name], who has been a contractor for [X] years. Throughout this time, he has worked on and overseen a variety of remodeling projects for hundreds of customers. He initially worked for local competitors but branched out on his own a few years ago. After being self-employed for a few years, [Founder’s Name] is ready to officially incorporate his business and hire several other contractors and employees who can help expand the business and clientele.

[Founder’s Name] has worked in the industry long enough to gain an in-depth knowledge of the business, including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.). He also already has a starting customer base to provide revenue for the company.

Success Factors

[Company Name] is uniquely qualified to succeed due to the following reasons:

  • The company will be providing a valuable service for homeowners who need to remodel their homes.
  • [Founder’s Name] has a track record of success in the remodeling industry and already has a loyal client base.
  • [Company Name] will provide high-quality remodeling services for a moderate price.

Financial Highlights

[Company Name] is currently seeking $550,000 to launch. Specifically, these funds will be used as follows:

  • Store design/build: $150,000
  • Vehicle purchase and maintenance: $100,000
  • Equipment and initial supplies: $150,000
  • Working capital: $150,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even

Top line projections over the next five years are as follows:

Financial SummaryFY 1FY 2FY 3FY 4FY 5
Revenue$560,401 $782,152 $1,069,331 $1,379,434 $1,699,644
Total Expenses$328,233 $391,429 $552,149 $696,577 $776,687
EBITDA$232,168 $390,722 $517,182 $682,858 $922,956
Depreciation$7,000 $7,000 $7,000 $7,000 $7,000
EBIT$225,168 $383,722 $510,182 $675,858 $915,956
Interest$6,016 $5,264 $4,512 $3,760 $3,008
Pre Tax Income$219,152 $378,458 $505,670 $672,098 $912,948
Income Tax Expense$76,703 $132,460 $176,985 $235,234 $319,532
Net Income$142,449 $245,998 $328,686 $436,864 $593,416
Net Profit Margin25%31%31%32%35%

 

II. Company Overview

Who is [Company Name]?

[Company Name] is a new residential remodeling business located in [Location]. We can remodel any part of a home, including bathrooms, kitchens, interiors, and exteriors. We also provide services to update homes so that homeowners can age in place safely. [Company Name] strives to be the best remodeling business in the area, focusing on customer service and maintaining long-term relationships.

At [Company Name], we believe that every customer deserves to live in their dream home. Our expert contractors will work with customers to design and create the perfect spaces that will make their current home their dream home. With [X] years of experience, we can take on any remodeling project and create any space that our customers desire.

[Company Name]’s History

[Founder’s Name] recently began researching what it would take to incorporate his business and expand his client base. He has analyzed the costs, market, demographics, and local competition. [Founder’s Name] has compiled enough information to develop his business plan in order to approach investors.

Once his research was complete, [Founder’s Name] incorporated [Company Name] on [date of incorporation] as an S-Corporation. The business is currently being run out of [Founder’s Name]’s home, but once the lease on [Company Name]’s office location is finalized, all operations will be run from there. He currently uses his personal vehicle to drive to clients’ homes but will purchase a vehicle that will be used specifically for the business.

Since incorporation, the company has achieved the following milestones:

  • Found a commercial space and signed a Letter of Intent to lease it.
  • Developed the company’s name, logo, and website located at [website].
  • Planned the suite of services to be offered.
  • Determined equipment, supplies, and materials needed.
  • Begun recruiting key employees

[Company Name]’s Products/Services

[Company Name] offers a variety of residential remodeling services. Some of these services include:

  • Kitchen and cabinetry remodeling
  • Bathroom remodeling
  • Interior remodeling
  • Roof remodeling
  • Exterior remodeling
  • Whole house remodeling
  • Aging-in-place remodeling

 

III. Industry Analysis

No home is perfect. Many homeowners find that they need to make updates or changes to their homes at some point in their ownership. Since many of these projects can be extensive, homeowners depend on professionals to get the job done. Therefore, contractors and remodeling businesses will always be in demand as long as people own their own homes.

According to Allied Market Research, the home remodeling market is currently valued at $852 billion and is expected to grow at a compound annual growth rate of 4.3%. This growth rate shows that remodeling services are still needed, and the industry will continue to grow and expand. Though the remodeling industry suffered losses during the pandemic years, the current project growth rate shows that people are ready to spend money on extensive remodeling projects again. Therefore, now is a great time to start a new remodeling business.

 

IV. Customer Analysis

Demographic Profile of Target Market

[Company Name] will serve the community residents of [Location] and its surrounding areas.

The area we service is suburban, with 55% owning homes. This means a sizable portion of the local population will require our services at some point.

A demographic profile of the area is as follows:

WilmetteWinnetka
Total Population26,09710,725
Square Miles6.893.96
Population Density3,789.202,710.80
Population Male48.04%48.84%
Population Female51.96%51.16%
Target Population by Age Group
Age 18-243.68%3.52%
Age 25-345.22%4.50%
Age 35-4413.80%13.91%
Age 45-5418.09%18.22%
Target Population by Income
Income $50,000 to $74,99911.16%6.00%
Income $75,000 to $99,99910.91%4.41%
Income $100,000 to $124,9999.07%6.40%
Income $125,000 to $149,9999.95%8.02%
Income $150,000 to $199,99912.20%11.11%
Income $200,000 and Over32.48%54.99%

Customer Segmentation

[Company Name] will primarily target the following three customer segments:

  • Homeowners: We will primarily market our services to new and veteran homeowners who need a friendly and convenient contractor to help them with all their remodeling projects.
  • Residents 55 and older: Residents who are near their golden years usually don’t have the time, energy, or ability to update their homes to make them safer to age in place. They look to experienced contractors to get the job done. Therefore, we will market our aging-in-place services to this demographic.
  • House flippers: Many house flippers are taking advantage of the current housing market to turn a profit. To succeed at this, they need reliable contractors who can help them remodel houses to make them more desirable to buyers. We will market our affordable services to this demographic so that house flippers know they can get professional remodeling services done without breaking their budget.

 

V. Competitive Analysis

Direct & Indirect Competitors

The following remodeling companies operate within a 30-mile radius of [Company Name], thus providing either direct or indirect competition:

Mountainside Remodeling Services
Established in 1979, Mountainside Remodeling Services has been a popular local commercial remodeling business. They help offices and other establishments update their spaces to improve their office environment. Many businesses have sworn by Mountainside’s services, and the company’s reputation has skyrocketed simply through word-of-mouth marketing.

Though Mountainside Remodeling Services will continue to thrive, the company primarily works with local businesses and, therefore, will be a minor competitor for [Company Name].

John’s Remodeling Inc.
John’s Remodeling Inc. has been a profitable small remodeling business for over a decade. This small business helps with a variety of residential remodel services, including remodeling bathrooms, kitchens, and exteriors. John’s small team has gained a great reputation for their friendly customer service and the professional quality of their work.

Though John’s Remodeling Inc. has gained a positive reputation, its scope of work remains small, even after a decade. They can only help with small projects and generally don’t sign up for larger-scale services. As [Company Name] grows, we will take on larger projects and aim to be the primary remodeling company that the residents of [Location] can rely on.

Carpentry And More LLC
Established in 2005, Carpentry And More LLC set out to be the best local business for all carpentry-related needs. Customers can expect high-quality carpentry work paired with excellent customer service. Carpentry and More’s most popular services include deck and fence installation, remodeling, and door replacement.

Though Carpentry And More offers a variety of services, they primarily focus on and make revenue from their carpentry services. Therefore, they are a minor competitor when it comes to remodeling projects.

Competitive Advantage

[Company Name] enjoys several advantages over its competitors. Those advantages include:

  • Customer Focus: [Company Name]’s contractors provide the highest quality customer service focused on transparency, communication, and responsiveness throughout the process, from the initial inquiry to the follow-up once the project is completed.
  • Management: [Founder’s Name] has been extremely successful working in the remodeling industry and will be able to use his previous experience to help clients with whatever they need. His unique qualifications will serve customers in a much more sophisticated manner than many of [Company Name]’s competitors.
  • Relationships: Having lived and worked in the community for decades, [Founder’s Name] knows many of the local residents and has already established a loyal clientele from his years as a solo contractor. These relationships will provide the company’s initial clientele and help our business through word-of-mouth marketing.

 

VI. Marketing Plan

You can download our Business Plan Template (including a full, customizable financial model) to your computer here.

The [Company Name] Brand

The [Company Name] brand will focus on the company’s unique value proposition:

  • Client-focused remodeling services, where the company’s interests are aligned with the customer.
  • Service is built on long-term relationships and personal attention.
  • Professional industrial experience in a small business setting.

Promotions Strategy

[Company Name] expects its target market to be individuals within a 30-mile radius of its location. [Company Name]’s promotion strategy to reach these potential customers includes:

Referrals/
[Company Name] understands that the best promotion comes from satisfied customers. The company will encourage its clients to refer other individuals by providing discounts on future services for every new client produced. This strategy will increase in effectiveness over time.

Website/SEO
[Company Name] will invest in developing a professional website that displays all the services offered by the company. It will also invest in SEO so that the company’s website will appear at the top of search engine results.

Social Media
[Company Name] will create the company’s social media accounts and invest in ads on all social media platforms. It will use targeted marketing to appeal to the target demographic.

Publications
[Company Name] will advertise its services in key local publications, including newspapers and area magazines. Additionally, the company will print brochures and place them in specific locations frequented by target individuals.

Direct Mail
[Company Name] will blanket neighborhoods in the area with direct mail pieces. These pieces will provide general information on [Company Name], its services, and promotional discounts.

Billboards
[Company Name] will secure a billboard in the area that captures the attention of residents. The billboard will draw attention to the new business and its service offerings.

Pricing Strategy

[Company Name]’s pricing will be estimated on a project basis drawing on [Founder’s Name]’s deep expertise in remodeling services. The pricing will be determined by the materials needed and the amount of labor required to complete the job. Pricing will be moderate and less expensive than our competitors, but more expensive than lower-quality, efficiency-driven remodeling businesses.

 

VII. Operations Plan

Functional Roles

[Company Name] will need to fulfill the following functional roles to execute its business plan and ensure the company’s success:

Service Functions

  • Design and plan remodeling projects
  • Provide remodeling services
  • Provide excellent customer service
  • Schedule services and other appointments
  • Create quotes and invoices
  • Tool maintenance and upkeep
  • Purchasing of materials and tools

Administrative Functions

  • Social media management
  • Website management
  • Bookkeeping
  • Marketing
  • Hiring and training staff
  • Maintenance functions
  • Other general administrative functions

Milestones

The following are a series of steps that lead to our vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:

DateMilestone
[Date 1]Finalize lease agreement
[Date 2]Design and build out [Company Name]
[Date 3]Hire and train initial staff
[Date 4]Kickoff of promotional campaign
[Date 5]Launch [Company Name]
[Date 6]Reach break-even

 

VIII. Management Team

Management Team Members

[Company Name] is led by [Founder’s Name], who has been a contractor for [X] years. Throughout this time, he has worked on and overseen a variety of remodeling projects for hundreds of customers. He initially worked for local competitors but branched out on his own a few years ago. After being self-employed for a few years, [Founder’s Name] is ready to officially incorporate his business and hire several other contractors and employees who can help expand the business and clientele.

[Founder’s Name] has worked in the industry long enough to gain an in-depth knowledge of the business, including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.). He also already has a starting customer base to provide revenue for the company.

Hiring Plan

[Founder’s Name] will serve as the Owner and CEO of [Company Name]. In order to launch, he needs to hire the following personnel:

  • Administrative Staff (2 to start)
  • Project Managers (1 to start)
  • Contractors/Laborers (3 to start)
  • Designers (2 to start)

 

IX. Financial Plan

Revenue and Cost Drivers

[Company Name]’s revenue will primarily come from charging homeowners for completed remodeling services. Pricing will be determined by the services required, materials and tools needed, and scope of the project.

The main cost drivers for [Company Name] will be labor expenses, materials and equipment, marketing, and the lease for the office space.

Capital Requirements and Use of Funds

[Company Name] is currently seeking $550,000 to launch. Specifically, these funds will be used as follows:

  • Store design/build: $150,000
  • Vehicle purchase and maintenance: $100,000
  • Equipment and initial supplies: $150,000
  • Working capital: $150,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even

Key Assumptions

The following table reflects the key revenue and cost assumptions made in the financial model:

Number of ClientsAverage
FY 1120
FY 2150
FY 3180
FY 4200
FY 5220

 
5 Year Annual Income Statement

Year 1Year 2Year 3Year 4Year 5
Revenues
Product/Service A$151,200 $333,396 $367,569 $405,245 $446,783
Product/Service B$100,800 $222,264 $245,046 $270,163 $297,855
Total Revenues$252,000 $555,660 $612,615 $675,408 $744,638
Expenses & Costs
Cost of goods sold$57,960 $122,245 $122,523 $128,328 $134,035
Lease$60,000 $61,500 $63,038 $64,613 $66,229
Marketing$20,000 $25,000 $25,000 $25,000 $25,000
Salaries$133,890 $204,030 $224,943 $236,190 $248,000
Other Expenses$3,500 $4,000 $4,500 $5,000 $5,500
Total Expenses & Costs$271,850 $412,775 $435,504 $454,131 $473,263
EBITDA($19,850)$142,885 $177,112 $221,277 $271,374
Depreciation$36,960 $36,960 $36,960 $36,960 $36,960
EBIT($56,810)$105,925 $140,152 $184,317 $234,414
Interest$23,621 $20,668 $17,716 $14,763 $11,810
PRE-TAX INCOME($80,431)$85,257 $122,436 $169,554 $222,604
Net Operating Loss($80,431)($80,431)$0$0$0
Income Tax Expense$0$1,689 $42,853 $59,344 $77,911
NET INCOME($80,431)$83,568 $79,583 $110,210 $144,693
Net Profit Margin (%)-15.00%13.00%16.30%19.40%

 
5 Year Annual Balance Sheet

Year 1Year 2Year 3Year 4Year 5
ASSETS
Cash$16,710 $90,188 $158,957 $258,570 $392,389
Accounts receivable$0$0$0$0$0
Inventory$21,000 $23,153 $25,526 $28,142 $31,027
Total Current Assets$37,710 $113,340 $184,482 $286,712 $423,416
Fixed assets$246,450 $246,450 $246,450 $246,450 $246,450
Depreciation$36,960 $73,920 $110,880 $147,840 $184,800
Net fixed assets$209,490 $172,530 $135,570 $98,610 $61,650
TOTAL ASSETS$247,200 $285,870 $320,052 $385,322 $485,066
LIABILITIES & EQUITY
Debt$317,971 $272,546 $227,122 $181,698 $136,273
Accounts payable$9,660 $10,187 $10,210 $10,694 $11,170
Total Liabilities$327,631 $282,733 $237,332 $192,391 $147,443
Share Capital$0$0$0$0$0
Retained earnings($80,431)$3,137 $82,720 $192,930 $337,623
Total Equity($80,431)$3,137 $82,720 $192,930 $337,623
TOTAL LIABILITIES & EQUITY$247,200 $285,870 $320,052 $385,322 $485,066

 
5 Year Annual Cash Flow Statement

Year 1Year 2Year 3Year 4Year 5
CASH FLOW FROM OPERATIONS
Net Income (Loss)($80,431)$83,568 $79,583 $110,210 $144,693
Change in working capital($11,340)($1,625)($2,350)($2,133)($2,409)
Depreciation$36,960 $36,960 $36,960 $36,960 $36,960
Net Cash Flow from Operations($54,811)$118,902 $114,193 $145,037 $179,244
CASH FLOW FROM INVESTMENTS
Investment($246,450)$0$0$0$0
Net Cash Flow from Investments($246,450)$0$0$0$0
CASH FLOW FROM FINANCING
Cash from equity$0$0$0$0$0
Cash from debt$317,971 ($45,424)($45,424)($45,424)($45,424)
Net Cash Flow from Financing$317,971 ($45,424)($45,424)($45,424)($45,424)
SUMMARY
Net Cash Flow$16,710 $73,478 $68,769 $99,613 $133,819
Cash at Beginning of Period$0$16,710 $90,188 $158,957 $258,570
Cash at End of Period$16,710 $90,188 $158,957 $258,570 $392,389
Download our Remodeling Business Plan Template

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