How To Grow a Home Improvement Business 

Growing a business takes plenty of forethought and careful planning. It can’t be a spur-of-the-moment decision and still drive success. Just as you wouldn’t start a remodeling project without drawing up plans, don’t try to expand your business without doing the same. 

If you’re a home improvement professional who wants to increase your company’s revenue, you must develop your strategy. This comprehensive guide will help you get started. 

You’ll get a list of the initial steps to start growing, including setting up a digital marketing program. Also, you’ll receive expert tips on forward thinking for expansion and get suggestions you can put to use today. 

The Importance of Growing a Home Improvement Business 

The home improvement industry has been around since the Industrial Revolution. It became fashionable for families to hire out repairs and remodeling and it hasn’t stopped growing since. 

Home improvement businesses really took off in the US after World War II. Between 1940 and 1960, homeownership grew, and planned communities skyrocketed.  

Many men returning from war made a living using the skills they had learned in the military. They started businesses as electricians, carpenters, and renovators. 

The debut of This Old House on television in 1979 fueled the home improvement fire. The advent of television networks devoted to home improvement, like HGTV, expanded the trend.  

Due to several booming real estate market periods, house flipping and remodeling have taken off. As of 2022, the industry was worth $340.81 billion.  By 2030, it’s expected to reach $490 billion. 

You’ll want to consider taking advantage of this industry-wide growth potential. Allowing any business to stagnate is rarely a good thing. Growth increases not only revenue but longevity as well. A business that grows and adapts to trends makes itself indispensable. 

Even in down economies, home improvement professionals can thrive as an essential service. Homeowners are always going to need repairs. And investors are always buying cheap or foreclosed properties to flip or rent out. It’s generally a vocation with good job stability. 

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The growth of the home improvement field has made for some challenges, though. To work in the industry, you must be more competitive than ever. 

This competition shows up in two ways: 

  1. Vying for the same leads as other home improvement specialists 
  2. Developing skills that others don’t have to stand apart from the crowd 

Also, the cost of starting a business can be daunting. Expenses like vehicles, equipment, and insurance have risen dramatically. 

Some states make it pricey to start and maintain a home improvement business, too. Incorporation fees can be deceptively low. But you can soon be hit with a large tax bill if you start up at the wrong time of year, close to your annual tax filing date. 

In California, for example, that’s $800 for an LLC or S-corp on top of filing fees. Then, you’ll pay that fee every year as long as you’re in business. 

Many business owners have reported finding it hard to hire and retain employees as well. Depending on your location, it can be difficult to assemble the crew you need to get jobs done. 

The same woes that have hit worker recruitment have taken a bite out of the supply chain. Even if you can land jobs, there’s not always a guarantee you’ll get the lumber or other supplies you need to complete them. This has led many home improvement companies to stockpile supplies at their own expense, just in case. 

To stay ahead of all these hurdles above, it’s important to keep a growth mindset for your business. Despite the challenges, growing your business can benefit your bottom line. It’s worth the effort. 

Initial Steps To Growing a Home Improvement Business 

Growth could mean many things. It could be expanding and taking on more staff to keep up with more jobs. But it doesn’t necessarily mean getting bigger. 

You might choose to expand your services with additional training and certification. Or it could mean working with a higher-paying customer demographic.  

Growth means having the ability to generate more revenue, one way or another. 

Always growing as a home improvement business has multiple benefits: 

  • You can take advantage of nearly uncapped income if you are successful. 
  • Your business will have the ability to weather economic downturns. 
  • When you finish one job, you will have another waiting or leads to pursue the next project. 
  • With extra revenue, you can invest in training or equipment to expand or specialize. 
  • If the field becomes even more saturated, you’ll be more competitive and less at risk. 

So, how do you set your business up for continuous growth? Here are the steps you should be considering: 

Understand Market Demand. 

You need to determine the demand for home improvement services by investigating four factors: 

  1. Your unique geographic location 
  2. The competition and saturation in your area 
  3. The current economy and going rate for services 
  4. Your experience and what you can provide 

For instance, you may want to do elegant renovations on historic homes. But what if you live in an area full of high-rise condos? And what if those condo dwellers have limited budgets? 

There isn’t a demand for your particular specialty. To pursue it, you will need to do one of two things: You can relocate or commute to jobs that suit your business. 

Or you can change your focus to projects that suit your current demographic. Think about something like small bathroom remodels and kitchen cabinet replacements. 

Dive Deeper Within Market Segments. 

Once you have a handle on your region’s demand, it’s time to dig a little more. Within that population, there are likely to be market categories that are even more specific. 

Take the hypothetical example above. Say you live in an area filled with modern condominiums. These neighborhoods are everywhere, from downtown Los Angeles to the riverfront in Chicago to the bay in Miami. 

You’ll likely find several market segments within those neighborhoods, such as: 

  • Young couples with kids biding time until they purchase single-family homes 
  • Busy executives who value convenience and amenities and intend to stay put 
  • Retired people who want to age in place and need safety and security 

How could you serve those different segments? Can you provide home improvement services for all of them? Or should you hone in on one or two to create a niche for yourself? 

Here’s a general rule: The more urban and densely populated your area, the more you can afford to specialize. You’ll face a lot of general competition, and specializing becomes a way to set yourself apart.  

The more rural your location, on the other hand, the more you need to provide a wider array of services to meet professional gaps. Your target market becomes larger if you’re more of a generalist. 

Create or Revise Your Business Plan. 

Once you understand where your company fits into the market, you can write or rewrite your business plan. This will help you chart your course for the next few years. And it will be required by any lenders should you require funding to grow. 

What’s included in a business plan? 

  • Executive summary that provides an overview of your company 
  • Company description with structure and number of employees 
  • Background and certification information for you and all staff 
  • Market analysis showing there is a demand for your services 
  • Services offered and pricing structure 
  • Marketing plan for promoting the business and for growth 
  • Financial projections to break even, profit, and expand 

Most business owners have a certified public accountant (CPA) and/or attorney to help with their business plan. 

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Develop a Sales Lead Funnel. 

Another thing you need to do to foster growth is create a sales lead funnel. This means always having potential clients at different stages of interest. 

You finish one job and the client at the end of the funnel signs a contract for a new project. As they exit the funnel and become an existing client, a new prospect enters it. 

Perhaps they’re just starting to explore curb appeal improvements. It will take some time, though, for them to commit to the work. Meanwhile, you nurture them along to move them through the funnel.  

The idea is you always have clients moving their way through the funnel. That way, you never have dry spells when you have no work. And a sales funnel is about more than surviving. It’s about that growth mindset mentioned earlier. 

Leverage the Power of Referrals. 

Referrals from current or recent clients can generate new customers with a much higher conversion rate than other marketing techniques. They cost business owners nothing but an outstanding customer experience. 

You always want to ask customers to write a positive review for you online if they’re happy with your work. Even better, ask if they’ll personally refer you to friends, family, and neighbors. 

Word-of-mouth recommendations are like gold in the home services sector. People trust them more than advertising and are more likely to hire you. 

RELATED ARTICLE: The Ultimate Guide to Choosing the Right CRM for Your Home Improvement Business 

Stay Current With Home Improvement Trends. 

Home improvement trends obviously change with the times. Your business needs to keep up. 

How do you do this? 

  • Attend trade shows and industry meetings. 
  • Go to real estate showings and open houses. 
  • Read magazines pertinent to your services. 
  • Watch television programming in your industry. 

Invest in Training and Equipment. 

Once you know the latest trends, you can work to meet them by getting the education or tools you need. 

For instance, you might find that there’s a large demand for sustainable solutions in your market. Therefore, you may need to learn how to install water-saving plumbing fixtures. 

Or, say you live in an area affected by severe weather events. You can learn to add high-tech hurricane-proof cladding and roof straps. You may need to purchase special equipment to do this, but it will pay off in the long run. 

Enhance Your Digital Marketing Efforts. 

Digital marketing is promoting your home improvement business online. The right strategies can bring in new clients and engage existing ones. 

In fact, there’s so much to digital marketing that it warrants a much deeper dive. Let’s look at some of the best avenues for your efforts and how to put them into practice. 

Virtually everybody shops online for services. That’s why you need to maintain an online marketing presence. It’s particularly vital if you are trying to grow your business. 

Digital marketing also makes your home improvement business look professional and credible. That’s important when people are spending large amounts of money on their properties. 

Here are the best digital marketing strategies to get you started: 

  • Create a website with the essential information for clients. Include your credentials, services, and contact details. 
  • Use search engine optimization (SEO) on your website. Include keywords clients would use when searching online for a home improvement company. The right keywords will help prospects find you more quickly. 
  • Add local SEO to the site. Mention your town, county, and state, plus a few area landmarks to boost your online search rankings. You’ll also ensure that you attract local leads that are more likely to convert. 
  • Join a few social media platforms. Research where your clients are most likely to spend their time and set up accounts there. Then, post helpful tips, photos of your work, and information about discounts or specials. Be sure to direct traffic back to your website. 
  • Consider using digital advertising. You can try something like Google Ads or Meta ads. If you opt for pay-per-click (PPC) advertising, you only pay when a prospect clicks on an ad. It’s a very cost-effective way to try out advertising online. 
  • Learn how to create email nurture campaigns. Email campaigns move prospective clients through your sales funnel, as discussed above. The emails are customized to the client’s position in the sales conversion process. 

Keep your brand consistency in mind when working on all of the above. It’s the overall vibe you want to project for your business. It could be your focus on sustainability or commitment to the community. It also includes your logo, graphics, and color palette. 

Expanding Home Improvement Services 

Above, we mentioned that growth isn’t always about doing a higher volume of the same work. You can also increase your revenue by diversifying your services. You could either cater to different clients or provide new services to your existing ones. 

Diversifying is more than a strategy for growth. It can help sustain you if the competition increases or the economy takes a turn for the worse. It may lead you in new directions you never thought of before. 

How can you kick start this initiative? 

  • Ask customers how you could expand your services to better serve them. 
  • Check out the advertising for your competitors to see what they’re offering. 
  • Provide training for staff to learn different types of home improvement jobs. 
  • Take formal classes in a new area, like woodworking or deck building. 
  • Adding extras to a service you already provide to upsell clients

For instance, maybe you specialize in remodels for historic homes. You could start adding retrofitted energy-efficient utilities, like programmable thermostats for steam radiators. 

Looking to the Future of Home Improvement 

Having a growth mindset is essential. So is developing a long-term vision for your business’s growth. In fact, the two are intertwined. 

When you have a multi-year plan for your growth, you can be methodical about the steps you take. This is a much better approach than trying things at random. 

What happens if you don’t think about the future of your business in one year, two years, or five years? You risk winding up in the same place you are now. Is that really where you want to be? 

To ensure you’re thinking long-term about your home improvement business, here are some tactics you can try: 

  • Make sure your business plan includes a section for the future where you map out where you’d like to be in a few years. 
  • Every six months, review your progress. Are you hitting your goals? Do your goals need to change based on factors outside your control? 
  • Are you celebrating your successes? When you reward yourself for a job well done, you subliminally encourage yourself to keep meeting your metrics. 
  • Don’t forget about continuing education. At least once a year you should pick up a new skill to keep your business future-focused. 

Do you have clients that come back again for more work? Are they referring you to other people? If so, you have one key ingredient of future success: repeat business. Be sure to track your retention rate so you can put a number to this metric. 

Top Takeaway Tips for Growing a Home Improvement Business 

Ready for some tips you can use right away to supplement all the suggestions above? Try these expert strategies: 

  • When setting goals for your business growth, use SMART methods, not vague wishes. SMART stands for specific, measurable, achievable, relevant, and time-bound. This way of goal setting puts a new level of detail in your plans. 
  • Tackle your business plan early on in the growth process. Review it often so you’re on track. Remember, if you do it right, this is your roadmap to success. 
  • Those keywords you used on your website to boost search engine results? Turn them into hashtags on all your social media posts to further increase traffic to your site. 
  • Include multiple email capture bars on your website. This is a good way to get email addresses for your nurture campaigns in addition to addresses you pick up elsewhere. Learn how to segment your email lists to suit different purposes. An automated email service will help with this and other email management tasks. 

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