Also, what's the best way to generate leads? Or the most cost effective?

oof. Haven't visited this forum much lately and this is the first thing I see. I'll be back.

DLM2000-GW, what do you mean by that?

What I mean is, I'm not sure Building a Home is the forum where you're going to get the kind of help you are looking for. Have you read many posts here? Anything is possible but IMO you aren't likely to get 'how to start a business' help here. You also posted in Remodeling and Other (don't even know what that is) and I can't speak to what might happen on either of those forums. Sometimes people stumble blindly into a hornets nest - I most certainly could be wrong in this case.

Sorry, I guess I shouldn't have posted it building a house. Other probably would have been my best bet

No need to apologize. I'm just giving you a heads up.

Thanks

I was a licensed renovator and registered homebuilder for many years.

As a start, I would suggest obtaining the appropriate building and/or renovation licenses in your jurisdiction, workman's comp or equivalent registration and insurance and any trade licences and association affiliations you can qualify for.

The best referral is word of mouth. Or your signs on current jobs.

Thanks! In this area, southern Illinois, I don't need licenses for anything except HVAC plumbing and electrical. I've done quite a few jobs already and have gotten several referrals from them, but I will need more jobs to transition it more into a full time job. Word of mouth is definitely best, but I do need customers in the first place

I recommend a course in managerial accounting. There are several inexpensive courses on Coursera that are great and can usually improve decision making. Coursera cost ranges from $39 to $99 per month with free seven day trial (the managerial accounting course can be completed in seven days).

My father owned a plumbing company and I took a managerial accounting course to help my father, I found it so powerful that I ended up staying for a dual major in accounting. My father would agree with that. It gave him a method for making decisions that he largely just did by intuition.

I teach a managerial accounting course in a public outreach program and 90% of the people who take it are in the trades.

Here are some examples:

https://www.coursera.org/learn/accounting-for-managers

https://www.coursera.org/learn/managerial-accounting-business-decisions

The first course will deal with methods for costing/pricing. e.g. establishing your overhead rate. The second course deals with capital budgeting and operations control.

https://www.coursera.org/learn/uva-darden-managerial-accounting

This one is a condensed version that might be a bit easier if you aren’t wanting to get too deep.

At the very least, you should get a business license in the municipalities in which you plan to work, carry general liability insurance, and carry worker's compensation insurance (I know it may not be required for a small company, but getting it makes you a safer choice for a homeowner.) Also, be sure you know what services you can provide without violating your state's contractor laws. Here in Virginia you wouldn't need a license to perform handyman services, but you would if you cross the line from simple handyman repairs to remodeling.

“If you do not know how to calculate your overhead costs, you are already losing money and just don’t know it.”

If you asked 100 contractors if they were good at calculating overhead, 98 are going to say yes. Ask them to calculate their neighbor’s overhead rate and 98 of them are going to get it wrong. I seriously doubt that even five percent of contractors can calculate a decent predetermined overhead rate. I am not sure that five percent could even distinguish between a direct and indirect cost.

Make sure you are really good at tile before you take a tile job. The houzz forum is full of contractor complaints. See this website for info on tile setting and requirements for becoming certified:

https://www.ceramictilefoundation.org

If you have not run a business before, see if you have a local chamber of commerce that offers educational seminars for small businesses. I don’t know if they operate IRL as much now, but it helps to be face to face with other small business owners that want to help new business owners. You can ask questions and get a few leads. There may even be a builder/remodeler association that meets in your area.

Don’t get overbooked. Build slowly if you can. If you can be totally referral-based (with qualified referrals), you may be more likely to have a higher close rate. Figure out the types of jobs you want. If you are good, you won’t be able to take all the opportunities you run across.

Assess the competition, especially services like handyman franchises and referral services like Angi.

I would suggest that you get a level of confidence (knowledge) with the overall industry before you launch to the public. I am not a remodeling contractor - I am a DIYer who has done full home remodels and I owned a marketing business where several clients were builders and remodeling contractors.

I don't know the particulars of your market, but there are a number of one and two-man handyman companies in our area that don't do much construction and have two-month backlogs. They do everything from cleaning gutters to rot repair to painting and bill by the hour at a pretty hefty rate.

I was just having this conversation with a friend last week . . . about how so many small business people (particularly in the trades) have great technical skills but are lousy business people. All too often we encounter trades people who don't return calls or emails, are unable to produce timely estimates, contracts or invoices, can't seem to manage their schedules or just disappear for long periods of time without explanation. I suspect many businesses fail because of these problems more than anything else.

Be sure that you have your back-office set up and ready to go -- someone designated as an office manager who promply responds to calls/emails/texts, a bookeeper who manages your finances, and someone who takes care of your website and social media. You can do some of these things yourself but probably not all and probably not well. Be realistic about what your real skills are and be prepared to pay others to do what you cannot. The Small Business Administration might be a good place to look for help.

P.S. I second NextDoor as a place a lot of neighborhood entrepreneurs get their start in my area.

I always go to my neighborhood Nextdoor when I need someone to work around my house. I was just there an hour ago looking for an appliance repair service recommendation. Join your local Nextdoor group. When someone is looking for the type of work that you do respond to them. Do a great job at a fair price & they will start recommend you to others. Good luck!

EHS:

Just jump in the pool; you'll be fine. It ain't all that.

Don't listen to naysayer friends and particularly relatives. Much better to crash and burn and listen to all the "I-told-you-so"s than to lie on your deathbed wondering what might have been.

You're getting good advice here, but you can be very successful by hiring out all your math. Stick to your strong stuff and plan on taking an inevitable a$$-whuppin' now and again.

I agree with using Nextdoor to promote your services. Many discussions can be found when someone posts looking for recommendations for a handyman, painter, home remodel, etc. I always bookmark those so I can refer to when needed. People will share who to contact and who not to!! Good luck!

Hmmm... My neighborhood doesn't have a nextdoor, and I doubt I could get one started. Guess I should change my address on it to the town that I figure most of my jobs will be in? It does seem like a good place to find work.

As a homeowner, I would be hesitant to hire a new tradesman without an established reputation and licensure for anything as extensive as a remodel, but I can and have jumped at the opportunity to hire a handyman for wood rot repair (door jambs, window sills, and deck rail posts all need attention at some point). We paid what I know to be the going rate here for more experienced/licensed tradesmen because, unlike more established contractors, the handyman didn't have a long waitlist and was able to start in a matter of days rather than weeks/months, then gave him good reviews on social media (Next Door and Yelp) for the work he did. The job took him just a few hours and then he was able to move on to the next customer. Handling smaller jobs like minor rot repair and advertising yourself as "specialising in (job)" is a good way to pop up in search engines and quickly build your reputation and client pool.

There are several states that don’t license general contractors, Illinois is one of those. Municipalities may license contractors but generally only the more populated areas do so.

So in many areas in Illinois, you are forced to hire an unlicensed contractor, because there is literally no license available to contractors.

In my opinion, a successful contractor is going to do four things pretty well (1) pricing/bidding the job, (2) managing expectations, (3) managing the schedule, (4) managing your money. If you do those four things well, I strongly suspect you will never have to worry about finding work.

The one that often gets overlooked is managing expectations. Too many contractors are quick to pick up those windfall jobs that they believe are too profitable to pass on, only to find that the customer expects a quality level that they are not capable of delivering. So making sure that you and the customer are on the same page before the project begins will save you money and worry.