People often remark on the fact that remodeling is an easy business to get into. On the surface, that's true. Most people entering the remodeling industry already own the basic necessities

People often remark on the fact that remodeling is an easy business to get into. On the surface, that's true. Most people entering the remodeling industry already own the basic necessities – a truck and tools. Capital requirements are not huge. The paperwork isn't a hassle. Many states have no licensing requirements for general contractors. And for many start-ups, personal networking might be enough to generate sufficient jobs, at least for the first six to 12 months.

But changes in the remodeling and home building market indicate that in the future it will be more difficult for individuals to start a remodeling company and stay in business.

Still, there will always be a need for quality craftsmen in the remodeling industry. There will also be niches in the marketplace where these craftsmen can earn a good living.

Changes to Think About

There are a number of basic market changes to keep in mind as you consider launching your own residential construction company.

Design/build services with construction expertise have dramatically altered the top of the market. If you're aiming at six-figure jobs and an upper-middle-class demographic, will your company be able to design the homeowner's project, as well as build it?

Also, at the present time in the remodeling universe, most of the design/build companies have their own lead carpenters and installers. Here's the problem: There's a dwindling pool of top-notch production talent out there. Home builders have addressed that shortage by turning to immigrants, who now handle much of the work in the field.

It won't be long before the need for quality help brings immigrants into remodeling. That will bring with it many adjustments having to do with the communication issues that will arise.

Assuming you quickly have more work than you and a helper can build, do you have a plan in place to attract and recruit first-rate carpenters — the kind of people who can also order materials, solicit bids from subcontractors, supervise the work of those subcontractors, and interact with homeowners in such a way that the quality of the experience is outstanding for your customer?

Size Matters

Many remodeling companies have crossed the $5 million threshold and are pushing toward sales of $10 million or more. Some may follow the path of the larger home builders and resort to using suppliers to arrange for installation of certain products. Does any of this mean there's no room for small operators in today's market?

Not at all. In fact, many niches exist that offer ample opportunity for remodelers just entering the market. Take handyman. Until the early 1990s, almost nobody in the remodeling business wanted anything to do with the handyman concept. Now, houses have gotten more expensive and harder to maintain. Baby boomers are often unwilling to become involved with a nonprofessional handyman. Many remodelers have been forced by their old customers to perform home maintenance. Today, there are at least 10 handyman franchise organizations out there.

If it's the desire to be your own boss, and make lots of money, that's driving your ambition to own your own company, have you considered one of the many niches that exist, including handyman?

The need to sell service, as opposed to simply products, is what propels many of the changes taking place in the industry. It's by no means confined to residential construction. Many auto dealerships make more on servicing cars than selling them.

It's a trend that's not going away. So as you sit down and think about what kind of company you'd like to have, think first about who you'll serve, and why. Then move on to how.

– Walt Stoeppelwerth is a publisher of management and estimating information for professional remodelers. (800) 638-8292; [email protected]; www.hometechonline.com.