The Boom of Home Improvement Businesses

According to some experts, the U.S. residential remodeling market is forecasted to grow at a Compound Annual Growth Rate (CAGR) of 4.4% from 2023 to 2030. This is due to several factors, such as changing consumer habits and lifestyles. Many consumers want their homes to be not only functional, but also aesthetically pleasing and "smarter" to accommodate new and emerging technologies. 

Since 2022, most U.S. households have undertaken home improvements, with kitchens and bathrooms being popular areas for renovation. Additionally, there is a growing trend among property owners to remodel their existing homes rather than move. Real estate companies are also responding by offering more customized and modern homes for sale.

So, how to start a home improvement business? Should you do it as an independent business owner or a franchisee? Let's break down the pros and cons of each to help you make an informed decision.

The Pros And Cons of Starting A Home Improvement Business from Scratch

Starting a home improvement business from the ground up offers lots of creative freedom and flexibility. You’ll have the ability to design your brand, set your rules, and work at your own pace. But it also means taking on more risk and responsibility, with fewer resources and less support. Here are the pros and cons.

The Pros

Creative Freedom

As the owner of an independent business, you’ll have full control over your brand. From your logo to your office setup, you can bring your vision to life. You can also design your marketing strategy, work processes, rules of operation, and customer experience from scratch.

Independence and Flexibility

Running your own business allows you to dictate your work style and pace, tailoring your business to meet your personal and professional needs. Unlike a franchise, you won’t be tied to a pre-determined model or playbook.

Lower General Costs

An independent business can often be launched with a smaller budget since you won’t need to pay franchise fees or licensing costs. You can grow incrementally based on your resources and goals.

The Cons

A Lack of Resources

As an independent business owner, you’re responsible for everything—marketing, training, staff development, and even location selection. Without the backing of a larger organization, building a successful business can feel overwhelming.

Lower Scale and Hard Competition

While it can be good to grow at your own pace, it can also mean growing too slowly. Without the marketing power or name recognition of a franchise, gaining traction may take longer.

Competition will also be much greater, as a small business can struggle to gain a foothold among the larger, established, and recognized brands.  

Lower Success Rates

Success rates in an independent business are usually much lower than those of a franchise because an established, well-known brand is more likely to attract customers than a new brand. It is also easier to properly train employees or respond to crises if you have a support team on your side.

The Pros And Cons of Owning a Home Improvement Franchise

Franchises come with the advantage of a proven business model, established brand recognition, and a support network. However, they also require significant upfront investment and come with strict guidelines that limit your creative freedom. Let’s take a look at the pros and cons.

The Pros

Brand Recognition 

One of the biggest advantages of joining a franchise is starting with an established name. You’ll benefit from the franchisor’s marketing resources, brand reputation, and built-in customer trust.

Structure and Consistency to Clients

Franchises provide a detailed roadmap for success, complete with training, operational guidelines, and access to a network of fellow franchisees. This structure can be invaluable, especially for first-time business owners.

Higher Success Rates

Thanks to their proven business models and support systems, franchises generally boast higher success rates compared to independent businesses. Comprehensive marketing tools and ongoing guidance further increase your chances of success.

The Cons

Higher Start Up Costs

We won't lie: Starting a Home Improvement franchise is expensive. Unlike opening a business independently and growing at a pace that a small budget can afford, opening a franchise may require additional fees and licensing. While some franchisors offer financing options, the selection process can be highly competitive.

Susceptibility To Economic Changes

Although the Home Improvement Business market is growing year after year, it is still sensitive to economic fluctuations that can drive up the prices of materials and distribution. Additionally, this market is highly competitive, making it essential to partner with the best suppliers and hire skilled workers. Companies that provide superior service at reasonable prices will gain a significant advantage over their competitors.

Strict Guidelines

There is little room for creativity within a franchise, as everything is set and delimited from day one. One important thing to keep in mind is that deviating from these guidelines can result in penalties or even termination of the franchise agreement.

The Bottom Line

Starting a home improvement business independently or investing in a franchise both come with unique opportunities and challenges. If creative freedom and gradual growth on a smaller budget appeal to you, an independent business might be the way to go. On the other hand, if you prefer the security of a proven model and can accommodate the higher upfront costs, a franchise could be a better fit.

Still not sure which path is right for you? Take our free Franchise Aptitude Assessment to see if a franchise could be the best fit for your entrepreneurial style. You can also schedule a consultation with us—we’d love to guide you through the decision-making process and help you take the first step toward a successful home improvement business.