You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your deck building business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a deck building business?
Starting a deck building business can require a substantial amount of initial capital. You will need to build up your tools and equipment, such as circular and chop saws, pneumatic nail guns, screw guns, routers, air compressors, jigsaws, and handheld tools, such as planers, chisels, and hammers. You will also need some materials, such as nails, screws, and metal hardware at hand.
Additional investments include:
- A work truck or van
- A flatbed trailer for hauling equipment and supplies
- Signage for vehicles and your warehouse
- A warehouse for storing equipment and supplies, with utilities
- Insurance for the business and your workers
- A contractor’s license
- A website, cell phones, and internet for the business
What are the ongoing expenses for a deck building business?
Most expenses will fall in the materials and equipment categories, as your tools and the deck or patio materials are most often purchased. You will also see rent, insurance, and vehicle maintenance as critical values in your earning equations.
Who is the target market?
Your target market will more than likely be middle, to upper class clients, looking to add to the appeal or livability of their homes. You may also want to focus on customers looking to advertise their house for sale or as tenant rentals. The addition of an outside deck or patio can often be a relatively inexpensive addition, which will dramatically increase the overall value and appeal of the house.
How does a deck building business make money?
A deck building business generates revenue through the completion of deck and patio projects for customers.
How much can you charge customers?
Depending on the customer’s plan and requests, you will charge between $100-150 per square foot, although it’s best to research the price points for contractors and companies in your area and strive to stay competitive with the competition.
How much profit can a deck building business make?
Depending on the size of your company and the type of clients you regularly work for, a successful deck business can see earnings in the $80,000-120,000 range, annually.
How can you make your business more profitable?
When considering more profitable options, think about what extras customers mention or ask about in the initial estimating process. If your customers want more decorative designs and added wood or stone protections, you may want to consider dedicating a division of your business to remodeling, maintenance, or add-ons to already existing structures. You might also consider partial enclosures, sun shades, or pergolas as options for customers. Listen to their requests and create additional work options, since the customers are your number one concern and the key to your success.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your deck building business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a deck building business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Certificate of Occupancy
A deck building business is generally run out of a warehouse or similar building. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a deck building business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your deck building business will be in compliance and able to obtain a CO.
Deck building businesses should consider requiring clients to sign a services agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and so on.
Labor Safety Requirements
Deck building involves the use of power tools and other potentially dangerous equipment, so it is important that you familiarize yourself with your areas labor safety requirements, which can be found here.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a deck building business
When marketing and promoting your business, positive customer word of mouth and recommendations will be an integral part of your strategy. You will also want to utilize as many free or low overhead options for advertising either online (Facebook, Instagram) or through flyers and handouts. Consider joining a contractor’s organization or advertise through regional builder associations, homeowner associations, and home, garden, and patio shows. These are excellent outlets for finding new customers outside of your customer base.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Maintain the most professional look, customer interactions, and final products possible. Your work really does speak for itself. When finishing a job, make sure nothing is left behind, except a professionally finished deck or patio.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Deck Building Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
A deck building business requires knowledge in carpentry, electrical, and sometimes plumbing construction. Experience in creating customer estimates and communication skills are also necessary to become and stay successful. The individual who enjoys working with his/her hands and in natural elements would be best fit for this profession.
What happens during a typical day at a deck building business?
Day to day activities focus on the construction of decks, creating customer estimates, and following up on customer leads for new projects. A deck business will also spend some time gathering materials and equipment for future jobs.
What are some skills and experiences that will help you build a successful deck building business?
Since virtually all of your profit, as well as future business is determined by customer satisfaction, it is critical that you understand how to talk to your clients and foster a word of mouth customer base. A good communicator will be able to continue to develop and grow the customer goodwill.
Additionally, experience in construction is absolutely essential. Some fast learners won’t need to rely as heavily on past experiences but, understanding framing, foundation building, and finish/trim work will prepare you for many of the situations you’ll be faced with day to day.
What is the growth potential for a deck building business?
As more customers look to improve the living conditions and curb appeal of their houses, the demand for external deck add-ons will continue to grow. By maintaining a positive rapport with customers and developing a trusted brand name, your earning potential can expand exponentially.
TRUiC's YouTube Channel
For fun informative videos about starting a busines visit the TRUiC YouTube Channel or subscribe below to view later.
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a deck building business?
When first starting out, you’ll need to have some successes to point to, in order to attract customers. Create flyers and business cards. Many hardware stores and lumber yards will have pin boards for contractors to advertise their business. Then, take some jobs, preferably not too challenging, to complete. Take pictures of the final products and post them on your website and social media pages. Let people see for themselves what your work looks like. And, as stated earlier, rely on customers to spread the word about how professional and prompt your service was. You may even want to offer rebates on future work for customer referrals.
How and when to build a team
Having a strong and diverse team is a critical first step. A crew of 3-4 will be a good starting place. And, once you have established your business, you can build multiple crews and expand your workload and earning potential.