Renovation services to home owners and businesses can be lucrative to a skilled professional with experience working with contractors. Most types of renovation work are regulated, and some specializations require licensing at local, state, and federal levels. In addition to a license from the Maryland Home Improvement Commission for the owner and any staff member, any kind electrical, plumbing, HVAC work, or tree removal requires additional licensing. Handling toxic chemicals, such as asbestos and lead paint, need to be certified by the Environmental Protection Agency.

The various licenses that may be required will be the biggest start-up costs before doing business, but the cost of materials used for services will be the biggest monthly cost. The materials cost will vary depending on the services offered and demanded. Many contractors do not require separate facilities and may need to operate only out of the home. They should however be bonded and insured for the protection of the business as well as the customer. An assistant laborer is also recommended, who should also be licensed, bonded, and insured.

The tables below depict the common issues and costs associated with operating a renovation business.

Political Labor laws – ensuring that staff is eligible to work in the US. Maintaining a safe work environment and compensating legally
Economic Housing market – renovation adds value
Can be partially seasonal, between indoor and outdoor work
Social Neighbors seeing renovation occurring often will ask for the same services
Technological Handling money using different software applications
Electrical and plumbing advancements – can create a need to subcontract to specialists
Advertising online/Using social media
Environmental Waste disposal
Supply storage, if any
Legal Licensing at local, state, and federal levels, depending on services provided
Licensing for specializations, including handling asbestos and lead; tree removal; HVAC
License from the Home Improvement Commission to provide services in Maryland
Paying into Guaranty Fund during licensing and renewal
Zoning considerations depending on renovations desired
Bonding and insurance
Critical Success Factors Acquiring the appropriate licensing for services offered
Bonding and insurance is strongly advised to compete
Major Activities Associated Costs Cost Driver
Painting, repairing drywall Supplies Square footage to be repaired
Building and repairing stonework Supplies Square footage to be repaired
Installing paneling Supplies Square footage to be repaired
Installing light fixtures Supplies Number and type of fixtures
Installing tiles/grout Supplies Square footage to be repaired
Installing linoleum Supplies Square footage to be repaired
Installing and removing carpet Supplies Square footage to be repaired
Repairing and installing hardwood floors Supplies Square footage to be repaired


Projected Expenses
Employee Costs including benefits Year One Cost per month
Owner  $          3,500
Book Keeper – Outsourced  $              800
Legal – Outsourced  $              800
Laborer  $          2,400
Wages Subtotal  $          7,500
Taxes, Fees  $          1,125
Subtotal  $          8,625
Tools  $              100
Materials  $          4,000
Subtotal  $          4,100
Facility Expense (deductible part of home)  $              500
Internet/Telephone  $              100
Office supplies  $                25
Computers/Hardware  $              100
Subtotal  $              725
Marketing Costs
Web site hosting and advertising  $              200
Web site updates  $              100
Business Cards, Pens, Swag  $                50
Subtotal  $              350
Bonding and Insurance  $              300
Subtotal  $              300
Projected Monthly Costs   $        14,100