If you’re ready to start a deck building company, you should know a few essentials
Nothing beats a good deck: it's the perfect place to set up a grill or enjoy a glass of lemonade on a sunny day. If you’re thinking about starting a deck building company, you’ve come to the right place.
It’s lucrative to build decks and patios. According to surveys of real Angi professionals, the average new deck installation costs $7,880, or about $30 to $60 per square foot. Larger decks that use premium materials will fetch much more than that. While your results will vary depending on how successful your business is, there's lots of money to be made in this market. In fact, one recent report predicted that U.S. demand for decking would rise to $7.1 billion in 2023.
If you've been thinking about how to start a deck building business, this guide will break it all down, from paperwork and permits to licenses and supplies.
First, determine whether you have the proper experience or financial support to launch a deck building company.
If you think you lack the skills or knowledge, apply for a job at a local deck company and learn the trade. Or find a mentor who owns a deck building business who can provide advice and help you plan out financial backing, like small business loans.
If you’re ready to start your own deck building business, here are the steps you must take to get all of your ducks in a row and draw up a business plan.
Like any construction project, building a deck requires paperwork, paperwork, and more paperwork. Here’s everything you should have in place before starting your business.
Create a limited liability company (LLC) or a corporation to protect you from being held personally liable if a customer sues you for breach of contract or a failure in the deck that causes injury.
Contact your state to file for an LLC or corporation. Generally, you can do it through the website, and the filing fee is usually negligible. For example, in Virginia, it costs $100 to file the Certificate of Formation.
You must pay taxes as a business, so register for an employer identification number (EIN) for free through the Internal Revenue Service (IRS) website.
Accounting may be yawn-inducing and low on your list of priorities. However, it pays to keep a detailed and timely track of your daily income and expenses. It prevents unnecessary tax penalties and helps you make wise financial decisions in the future. If stats and spreadsheets aren’t your bag, hire a bookkeeper to add things up.
In-depth bookkeeping also helps you analyze your expenses. In the beginning, it’s easy for outgoings to spiral, and you can overlook key costs. Get a handle on your regular overheads, such as storage or workshop rentals, utilities, insurance, staff, sales and marketing, etc. You’ll need to factor these into your pricing structure and workload alongside the project materials.
It’s tempting to avoid a bit of admin and run your deck building business through your personal bank account. But setting up a business bank account simplifies accounting and tax filing and offers personal asset protection. In the future, it also means you can apply for business loans.
Business account opening as a sole proprietor is relatively straightforward, with minimal paperwork. If you’re setting up as an LLC, be prepared for a little more paperwork and getting to know the bank staff.
Before you can even get a permit, you’ll need to get the proper licensing. Contact your local contractor licensing department to determine what steps you must take to become a licensed contractor. To get licensed, you'll probably need to be bonded and insured.
An insurance company or specialty surety bond company will offer coverage. The cost varies widely, but you can generally calculate this as a percentage of the coverage sum. It may cost as much as 1% of that amount, depending on the complexity of your coverage.
At a minimum, you’ll need general liability insurance. If you plan on bringing in staff, look into subcontractor liability insurance and workers’ compensation. Commercial vehicle insurance makes sense if you have a work-specific vehicle, and you might even want equipment insurance to cover top-quality tools and machinery. Some companies offer all-in-one contractor coverage, including all these elements.
You must provide a financial statement to the company and pay a monthly premium, which, again, varies widely depending on the size of your company, the work you do, and the materials you use.
Anytime you do remodeling work on a home, you'll need to obtain a building permit. Exactly what type of permit you need depends on the deck code rules and regulations of the state and region where you live.
For example, cities often have zoning laws that place restrictions on the size of the deck. In New York City, a deck may only extend 8 feet beyond the face of a building. In California, deck-builders will need a building permit for any deck that's at least 30 inches off the ground.
It may surprise some homeowners to find out they need a permit for a deck, since it seems like a simple structure. But your local jurisdiction must approve the project, and it must meet specifications laid out in the International Residential Code.
Check with government agencies on their permit filing process, as it will differ depending on your location. Expect to file a permitting fee, which generally ranges from $225 to $500 for a deck.
If you’ve spoken to local government agencies but are unsure if you’re doing everything right, reach out to a local lawyer specializing in construction for guidance.
Simply saying you offer deck building services isn’t the best strategy. When marketing your business, showing you provide a diverse and full range of services adds credibility and can help you secure new clients. As a decking contractor, some other services worth considering, alongside new and replacement deck building, include:
Deck repairs
Deck renovations
Deck design
Deck inspections
Deck lighting
Pergola or gazebo installation
Deck staining or painting
Old deck demolition
How much you'll pay for lumber for each job depends on the type of deck you're building, what materials you want to use, how big it is, and so on.
But you’ll need to prepare for the following costs as well:
A work vehicle capable of transporting supplies and equipment
Warehousing space to store supplies and equipment
Construction equipment
Tools
Labor
With a local deck building company, an excellent reputation and regular networking will be essential to your success. Use business cards and social media to get the word out. Perform quality work each time, so your customers will refer you.
As your reputation grows, neighbors dropping by for a cookout will ask who made that beautiful deck, and you’ll get a phone call. There's nothing like word-of-mouth marketing in the deck building business, so focus on building your brand this way.
If you want to grow your deck building business beyond the neighborhood, you’ll need some online help. Advertise your business on Angi to homeowners searching for local deck and patio builders. Get more qualified leads and showcase your photos and ratings to grow your business year-round.
When starting out, it’s tempting to set your pricing way below your local competition to bring in the customer. But underpricing yourself is a quick route to bankruptcy. Especially because, in the beginning, it’s tricky to cost jobs effectively, and you could end up over budget. Look at competitor pricing, so you don’t price yourself out of the market, but make sure you add a buffer and calculate the break-even point for each project. Consider the following:
Overheads
Desired profit margin
Job scope (including labor hours and materials)
Don’t forget, going too low can raise suspicion among potential clients. They might wonder if you plan to cut corners or use sub-par materials. If you’re struggling with pricing, hire an accountant to help formulate realistic starting quotes.
Turning out a quality job per your client’s instruction is the top priority, but focusing on your customer service makes you more likely to get repeat customers and word-of-mouth referrals. To keep your customers on your side, consider the following:
Communicate clearly throughout the project.
Deliver on time (or communicate when you can’t and why).
Maintain a professional appearance.
Keep the work site tidy.
Provide a formal contract for peace of mind on both sides.
Keep insurance and licenses up to date (sensible homeowners will ask to see this).
Keeping a formal record of your past clients and the work you’ve done for them means you can update them with offers through email marketing tools (with prior consent). You can also reach out for references, remind yourself of the project if they contact you requesting a quote for further work, and even thank them for referrals.
Making a profit is about more than revenue—it’s also about keeping your expenses in check. Sometimes, figuring out a way to cut costs will make you more money than finding a new customer.
Here are a few ways to keep your overhead low:
Use affordable materials. Rather than only using the most premium wood available, consider offering less-expensive materials like pressure-treated pine wood, which has a long lifespan if cared for. It'll require more work to maintain, but the upfront cost will be lower. You might even offer a regular maintenance plan as an upsell to your customers.
Go with a straightforward design. It might be tempting to wow your customers with expensive multilevel designs, but it might not give them much value in return. Aim for a simple, high-quality deck job that will keep you on time and budget.
Have all your paperwork in order. Not having the proper licenses and permits adds unnecessary delays and, therefore, cost overruns for your project. By ensuring you've done your homework and have the correct paperwork in place, you'll avoid these common expenses.
Do it yourself. Consider doing the planning and hammering yourself rather than hiring subcontractor help. While this won’t work down the road as you seek to grow your business, early on when money is tight, it can keep you afloat. Labor gets expensive fast, so the more you can avoid hiring help at the outset, the more you'll save.
Take advantage of technology. Use construction management software and applications such as Procore, Raken, or Fieldwire to simplify and automate the organization of your business.
D.P. Taylor contributed to this piece.
