How to Start a Retail Home Renovation Business

In 2021, the U.S. Census Bureau reported a 55% increase in the number of new businesses launched (just over 5 million). Most were launched by first-time entrepreneurs. The move was motivated by COVID-19, which caused people to re-evaluate how they were earning a living. Certainly, running your own business allows you more control over your time and finances — but first, you have to get through the start-up phase. Building a business on a solid foundation is critical to living the life you want as an entrepreneur.

Home improvement industry continues to grow

The home improvement industry boomed during the peak of the pandemic, but the trend is continuing, making a home renovation business a solid entrepreneurial opportunity. Home values are growing, and homeowner equity has almost doubled in the past five years. In addition to new homes, 80% of homes are at least 20 years old and 40% are at least 50 years old; a good indicator that home renovation interest will continue.

With a strong foundation to start a retail home renovation business, the next step is determining what type of business will be profitable in an industry that is dominated by some major chains.

The retail giants

The challenge of starting a retail home improvement business is that the market already hosts some key players. For example, The Home Depot had Q4 earnings of $35.7 billion in 2021; Lowe’s recorded $21.3 billion in their Q4 earnings, and Builders First had $4.6 billion in Q4 sales. Even though the retail sector is expected to grow at more than 4.1% between 2021 and 2027, is there really room to grow in this industry with your own home renovation business? The answer is yes.

Home improvement niche markets

To establish a niche retail home improvement business, you need to choose to focus on a particular product or a certain consumer demographic. Some product niches include paint, antique or small-ticket home decor, a kitchen shop, or a gardening center. Indoor paint and stain sales increased 16% in 2020, while kitchen and bath sales increased by 28%.

Smaller stores that purposely cater to a niche customer can often offer a better service with smaller square footage when compared to retail giants who try to be everything to everybody. The niche market store has the benefit of a more meaningful customer satisfaction experience, leveraging knowledge and a tailored product line for customers who want a more customized shopping opportunity.

A niche market franchise could be your best decision

ProSource Wholesale offers a niche market franchise in the home improvement industry — we cater specifically to trade professionals. As a leader in this market, we offer interested entrepreneurs the opportunity to fast-track the start-up phase of establishing a business that has a successful model for the trade pro customer. The average unit volume per franchise is $5.8 million.

Included in the ProSource franchise are financing and cash-flow management — two critical parts of opening your own business. Financing is often easier to obtain with a franchise model because the business plan has already been proven with other franchisees. When building your financing foundation from scratch, you are really submitting your best guess as to how you’ll make money by managing inventory and collecting receivables. With ProSource Wholesale, there are no receivables — the order is paid before it is placed. Being paid upfront for your products is more financing-friendly to lending institutions than having to sacrifice your cash flow in purchasing stock upfront.

A good resource to help you with a business plan is offered by the U.S. Small Business Administration. It provides an in-depth review of financing, legal requirements and other key areas to build the foundation for your business.

Franchising is a sustainable business option

ProSource Wholesale offers a proven business strategy for people who are looking to be in business for themselves. When you become a franchisee, you have the marketing and operations package already done, and you know it works because 150 other locations have been using it to be successful. If the goal is to retain control of your life and your financial future while working in a profitable industry, a ProSource Wholesale franchise will help you do it.

Fill out this form today to request more information and to learn the next steps in becoming a home improvement entrepreneur.