How to Start a Home Renovation Referral Business

Focus on referring home-renovation contractors who specialize. Home renovation is a broad category. This can include a variety of experts including plumbers, carpenters, basement renovators, flooring specialists, electricians, painters and more. Focus on referring two or three home-renovation specialties. For example, your business may focus on referring homeowners to contractors who provide roofing, gutter-cleaning and replacement and window replacement.

Research requirements of licensing, bonding and business registry. You will need to contact your local, county and state government for each type of contractor service you'll be referring. This information is one of the most important steps toward building your business. Your expert knowledge about this information is an important part of establishing your business as a professional, credible and trustworthy. Your clients will realize that any contractor your service recommends has met your rigorous standards and criteria.

Establish clear qualifications for contractors. You will have certain obvious requirements, like requiring that all contractors' licensing, bonding and insurance information be up to date. And only contractors who provide certain services will be considered. For instance, if your service specializes in kitchen renovation specialists and window replacement specialists, those will be the only contractors you will consider as eligible to be a part of your list. You may also require a list of at least three references for each contractor.

Conduct background checks. When a contractor is recommended to your service, you should conduct a thorough background check. Speak to the contractor and explain your service to them. Most contractors will gladly give you the information you need. Let them know that you'll need to see their license, bonding and insurance information for confirmation. Find out about the services they offer and the costs and ask for references.

Set your fees. You should make your referral service free to homeowners who contact you seeking a home renovation. Instead, charge contractors a finder's fee of 5 percent to 15 percent of the cost of the job. You will be the middleman connecting clients with the contractors you recommend. Once a job is complete, the contractor pays you the standard fee.