How to Start a Kitchen Remodeling Business

July 27, 2014 | By | Reply More

start kitchen remodeling business

The kitchen is one of the most important rooms in the house. People want a kitchen that works for them, their families and their lifestyles, particularly if they are the type who loves to entertain. When buying a house, kitchens, along with baths, are the first two things that people look at and consider during the purchase.

Given the importance of kitchens, kitchen remodeling is one of the best niches in the home improvement industry. There is a constant demand for kitchen remodeling, particularly now that the economy is improving and home prices are increasing. They want to increase the size of their kitchens, improve its layout and work flow, add features such as a walk-in pantry or more storage solutions, or update the style.

Homeowners looking to sell their homes understand that kitchen remodeling is one of the best investments they can do in their homes. A kitchen remodel can return anywhere from 66% to 85% of its cost upon resale. People look more for a remodeled kitchen than a remodeled attic or brand-new swimming pool in the backyard!

Starting a Kitchen Remodeling Business

The kitchen remodeling business requires design and creativity, technical knowledge of architecture and construction, as well as product knowledge of kitchen appliances and cabinetry. To succeed in the business, you need to be strong in design and well-versed in aesthetics and space planning. You need to showcase deep practical technical knowledge such as how to install cabinets and what issues may arise during the renovation. You also need to know how plumbing, electric and HVAC (heating, ventilation and air conditioning) systems work to start a kitchen remodeling business.

RELATED: How to Start a Handyman Business

Most of all, you need to be a people-person; someone who honestly enjoy working and helping people. A kitchen remodeling business entails understanding the vision of the customers and translating it into design. You need to know how to sell and have good presentation skills.

If you want to start a kitchen remodeling business, here are the steps to consider:

Identify your Target Market

The kitchen remodeling business is a local business where you will be operating in your geographic area (unless you can replicate the business and franchise it). The type of population in your target area will shape the services that you will offer.

Start by researching your target market. Here are some questions to help you jumpstart your research:

  • What is the average single family home price in the area? Single family homes in the price range of $2-15 million will have different remodeling needs than homes in the $100,000-200,000 price range.
  • What is the average age of the residents in the area? Generation X individuals have different remodeling needs compared to the mature market or even young families.
  • How many new single family homes are built annually? Major renovations are typically undertaken right after the home purchase.
  • How many remodeling contractors operate in the area? Specifically, how many are kitchen remodeling contractors? It is important to understand the competition including the services they offer so you can determine how you can differentiate your business from them.

Based on the demographic characteristics of your chosen location, determine your ideal customers. If there are a significant number of high-priced single family homes in your area, you can offer high-end kitchen renovation services. You can also target the middle market, whose kitchen renovation jobs cost anywhere from $5,000-$50,000. These are customers who want quality work and products, but are looking for good value for their money.

You also need to choose whether you want to focus on commercial kitchens, or private kitchens. Working on commercial kitchens that will serve 2,000 people is different from a residential kitchen for 4 people.

Identify the right target market, and then align your business in pursuit of that target market.

Find a niche for your business.

Niches allow you to better position and market your company. By specializing in a product or service, your business can have a competitive advantage among other players in the market. The goal is to find a smaller segment of the market where you can deliver the best quality product or service and dominate that niche. Better yet, find a niche in your market where there is no competition.

One example of a niche market is the environmentally sustainable kitchen project. Your business can focus on creating an eco-friendly kitchen, starting with green options for counter tops, cabinets, tile backsplash, floors, sinks and faucets, cook tops and other appliances.

Another possible niche is kitchen renovation for homes repossessed by banks. There are investors who buy and sell foreclosed and repossessed homes – and a key part of their strategy to sell the homes for a profit is to renovate the kitchen.

You can also choose to focus on multi-unit projects such as hospitals, hotels, or apartment complexes.

Get the necessary licenses and permits

The next thing that you need to think about is the license and permit for the kitchen remodeling business. Check with your city or local county government the types of licenses and permits you will need to operate. In some areas, you may be required to get a tradesman license or a contractor license.

In addition to the licenses, you may need to get business licenses or tax permits from your city or county clerk or revenue department. You may also be required to register for business tax, including income tax withholding, seller’s permit (sales and use tax), and unemployment insurance tax.

If your business will have its own office, you may be required to get a number of permits:

  • building permit
  • signage permit
  • occupational permit
  • alarm permit
  • fire permit
  • zoning permit
Set Up Your Business

Decide on the business structure as to how you will operate a business. Consult a lawyer as to what the best structure for your business – whether you can start as a sole proprietor, LLC, partnership or corporation. Learn the differences of each of these legal structures, particularly in terms of personal liability and tax implications.

If you plan to start a company, you would possibly need to hire workers. Thus, you should study the policy that deals with workers’ compensation, benefits and other legal issues.

Develop a Business Plan

If you have plans of starting a kitchen remodeling business, you should come up with a business plan that would help you organize your ideas for this endeavor. You need to know the tools that are ideal for a successful remodeling business. Initially, the nature of your business should be appealing to you. Many business owners are motivated to exert their efforts when they find accomplishment and satisfaction in the business. Thus, you should have the right attitude and character that could be your foundation for a successful career.

When you want to attain success in your kitchen remodeling business, you should carefully plan the components that should make up your business. You might want to have an outline or a plan for your business. The business plan should include the nature, location, name, job positions, and the financial aspect of your enterprise. If you have no background on how to start a business, you should consult a lawyer or a business advisor who could guide you on your plan for your business.

Be bonded and insured

You need to get insurance for your kitchen remodeling business. If you already have insurance for your home or your automobile, you might want to consult the insurance company for possible coverage that you could have for your business. You could inquire about the ideal policy that you need such as liability insurance. This insurance covers damages and accidents that might occur in your business. Once you have an idea about the different policies, you could choose the ones that you want to apply for your remodeling business.

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You will also need to get surety bond for your business. Most states require contractors, including kitchen renovators, to get bonded as a prerequisite for getting a license. Read the article Benefits of Surety Bonds: How Being Bonded Helps Home Business Owners

Prepare your marketing plan

After you have completed the legal aspects of your kitchen remodeling business, you should think about the best way on how you could inform the public about your business. You should have an excellent marketing strategy, as your company’s success depends on your customers. Your goal is to make the public choose you instead of your competitors in the business. Hence, you should come up with brilliant ways on how to advertise the company.

You should consider using online and print advertisements as part of your marketing plan. Create a company website that features the services, company background, relevant photos and contact details of your company. You could also contact your newspaper publication company, and request for a spot in the newspaper column where you could have your business advertised.

Your business would be a big success, as long as you have exerted your efforts on how to make it prosper.

Become a Member of Industry Associations

Becoming a member of an industry association will lend more credibility to you and your business, as well as promote trust among your clients. It will also provide you with networking as well as educational opportunities. If you enter into industry awards through the associations and win, that could be a huge asset in your marketing strategies.

Some of the industry associations you should consider joining include:

  • National Kitchen and Bath Association (NKBA)
  • American Institute of Architects (AIA)
  • American Society of Interior Designers (ASID)
  • SEN Design Group (SEN)
  • National Association of Remodeling Industry (NARI)
  • Better Business Bureau (BBB).
Think how you will set up your business

There are a number of important issues that you need to do before starting your kitchen remodeling business:

  • Decide whether you will need a showroom, and whether you have the resources to do it. A showroom lets potential customers see samples of kitchen designs that you can do. You can also use the showroom as the place to allow customers to pick and choose the materials they want to use for their kitchen renovation project. However, note that a showroom will require a significant amount of capital investment.
  • Prepare an administrative system that will help you to track accurately job costing. You need to set up procedures and systems that will allow you to track the costs of completing a job.
  • Select software that can help you in designing the kitchen based on client’s specification; as well as software to help in quotations and order processing.
  • Find manpower with the necessary skills to help you in your business.


Next: How to Succeed in the Kitchen Remodeling Business

Recommended Books on How to Start a Kitchen Remodeling Business:


Jenny Fulbright

Jenny Fulbright

Jenny Fulbright is a writer for

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Starting a Kitchen Remodeling Business
The kitchen is one of the most important rooms in the house. People want a kitchen that works for them, their families and their lifestyles. Learn how to start a kitchen remodeling business.
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