Americans spend hundreds of billions of dollars a year improving and repairing their homes. Harvard’s Joint Center for Housing Studies projects homeowner improvement and repair spending of about $518 billion by the end of 2026, with growth slowing through the year as the housing market stays sluggish. That’s a huge, steady market for remodelers, from handymen tackling small projects to design-build firms transforming kitchens and baths.
Remodeling is also one of the most complex contracting businesses: projects involve design, permits, multiple trades, changing customer decisions and large sums of money. The BLS counted about 959,000 carpenters in 2024, with a median wage of $59,310; remodeling business owners earn their profit through sales, project management and coordinating trades efficiently.
The workforce
| Occupation | Jobs (2024) | Median pay (May 2024) | Projected growth, 2024 to 2034 |
|---|---|---|---|
| Carpenters | about 959,000 | $59,310 | +4% |
Source: U.S. Bureau of Labor Statistics, Occupational Outlook Handbook.
Market data
| Measure | Value |
|---|---|
| Projected homeowner improvement and repair spending, end of 2026 | about $518 billion |
| Spending trend | Growth slowing through 2026 |
Business models compared
The figures below are illustrative months from our step-by-step guides, not industry averages. They show how revenue and costs typically fit together; your market, prices and costs will differ.
| Business model | Startup costs | Example monthly revenue | Costs | Profit before owner pay | Margin |
|---|---|---|---|---|---|
| Kitchen and bath remodeler | Moderate to high: crew, vehicle, design tools, showroom or office, working capital | $120,000 | $104,100 | $15,900 | 13% |
| Basement finishing | Moderate: crew, tools, trades relationships | $76,000 | $58,700 | $17,300 | 23% |
| Small remodels and handyman work | Low: van, tools, insurance | $18,500 | $9,800 | $8,700 | 47% |
Fixed and variable costs
For projections, the most useful split is between variable costs, which rise and fall with sales (materials, parts, hourly labor), and fixed costs, which you pay every month regardless (rent, salaried staff, insurance, loan payments).
| Business model | Variable costs (% of revenue) | Fixed costs per month | What it means |
|---|---|---|---|
| Kitchen and bath remodeler | 61.7% | $30,100 | Mostly variable: profitable early, but watch cash flow |
| Basement finishing | 58.6% | $14,200 | Mostly variable: profitable early, but watch cash flow |
| Small remodels and handyman work | 20.5% | $6,000 | Low costs overall: time is the main constraint |
What the numbers say
The market is large but steady, not booming. Harvard’s outlook shows spending near record levels but growth slowing in 2026. Remodelers win by taking share through reputation, referrals and strong local visibility rather than riding a surge.
Kitchen and bath remodeling carries heavy fixed costs. Project managers, office or showroom space and lead carpenters must be paid even in slow months, which is why the example projection takes five months to turn profitable.
Subcontractors and materials take most of each dollar. Remodelers’ margins depend on accurate estimates, controlled change orders and efficient scheduling of trades.
The three models in brief
Kitchen and bath remodeler. High-value projects with design, selections, permits and several trades. Build a free remodeling website in minutes.
Basement finishing. Strong demand in regions with basements; framing, drywall, electrical, plumbing and flooring coordinated into one project.
Small remodels and handyman work. Low startup costs and quick jobs; a common path into larger remodeling. See the handyman website builder.
Cost structure: kitchen and bath remodeler
Each cost as a share of the example month’s revenue ($120,000):
| Cost | Monthly amount | Share of revenue | Type |
|---|---|---|---|
| Materials and fixtures | $42,000 | 35.0% | Variable |
| Subcontractors | $30,000 | 25.0% | Variable |
| Lead carpenter and carpenter | $11,000 | 9.2% | Fixed |
| Project manager and office | $6,000 | 5.0% | Fixed |
| Marketing | $4,000 | 3.3% | Fixed |
| Insurance | $2,500 | 2.1% | Fixed |
| Office or showroom rent | $2,500 | 2.1% | Fixed |
| Payroll taxes and benefits | $2,200 | 1.8% | Fixed |
| Permits and dumpsters | $2,000 | 1.7% | Variable |
| Vehicle | $1,500 | 1.2% | Fixed |
| Software | $400 | 0.3% | Fixed |
| Profit before owner pay | $15,900 | 13% |
A first-year projection: kitchen and bath remodeler
New businesses rarely start at full speed. This projection assumes revenue ramps from 35% of the example month in month 1 to 100% by month 12, variable costs move with revenue, and fixed costs stay the same every month. It’s a planning illustration, not a forecast.
| Month | Revenue | Variable costs | Fixed costs | Profit | Cumulative |
|---|---|---|---|---|---|
| 1 | $42,000 | $25,900 | $30,100 | -$14,000 | -$14,000 |
| 2 | $54,000 | $33,300 | $30,100 | -$9,400 | -$23,400 |
| 3 | $66,000 | $40,700 | $30,100 | -$4,800 | -$28,200 |
| 4 | $74,400 | $45,880 | $30,100 | -$1,580 | -$29,780 |
| 5 | $84,000 | $51,800 | $30,100 | $2,100 | -$27,680 |
| 6 | $91,200 | $56,240 | $30,100 | $4,860 | -$22,820 |
| 7 | $98,400 | $60,680 | $30,100 | $7,620 | -$15,200 |
| 8 | $104,400 | $64,380 | $30,100 | $9,920 | -$5,280 |
| 9 | $109,200 | $67,340 | $30,100 | $11,760 | $6,480 |
| 10 | $114,000 | $70,300 | $30,100 | $13,600 | $20,080 |
| 11 | $117,600 | $72,520 | $30,100 | $14,980 | $35,060 |
| 12 | $120,000 | $74,000 | $30,100 | $15,900 | $50,960 |
Year one: revenue $1,075,200, profit before owner pay $50,960. The first profitable month is month 5. Cumulative results bottom out at -$29,780, which is the minimum cash cushion this plan would need, before any startup costs.
A kitchen and bath company carries a project manager, office or showroom and crew from the first month. In this illustration, the first profitable month is month 5, with a cumulative low of about $29,800, which is the minimum cash cushion the plan needs on top of startup costs. Deposits and progress payments are essential to keep material purchases from draining cash.
How remodelers price
- Fixed-price contracts based on detailed scopes and selections, the most common approach for homeowners.
- Cost-plus pricing (costs plus a fee or percentage) for complex or uncertain projects.
- Allowances for items the customer hasn’t selected yet, such as tile or fixtures.
- Change orders for any change in scope, priced and signed before work proceeds.
- Design fees for planning and drawings, often credited toward the project.
Seasonality and demand patterns
Interior remodeling continues year-round, while additions, decks and exterior work slow in winter in cold regions. Many homeowners plan projects in winter and start in spring, so design and sales activity often peaks months before construction. Remodeling demand also tracks home sales: buyers often remodel soon after moving in.
A startup checklist
- Get licensed as a contractor where required, and learn local permit processes.
- Get EPA lead-safe certification for work on pre-1978 homes.
- Arrange insurance: general liability, workers’ comp and commercial auto; consider builder’s risk for larger projects.
- Build a network of reliable licensed subcontractors.
- Create contract templates with payment schedules, allowances and change-order terms.
- Choose project management software for schedules, selections and communication.
- Build your portfolio and reviews; see local SEO for contractors.
Questions to answer before you start
- What types of projects will you specialize in?
- How will you manage subcontractors and keep schedules on track?
- What payment schedule will protect your cash flow?
- How will you handle change orders and customer indecision?
- How much working capital do you need for materials and payroll?
Where the opportunities are
- Aging in place: accessible bathrooms, entryways and first-floor living for older homeowners.
- Kitchen and bath upgrades: consistently the most popular remodeling projects.
- Energy improvements: insulation, windows and electrification-ready upgrades.
- Basement and attic conversions that add living space without moving.
- Repairs after storms and water damage.
Key terms
| Term | Meaning |
|---|---|
| Scope of work | A detailed description of what the project includes |
| Allowance | A budget for items not yet selected, adjusted when chosen |
| Change order | A signed agreement changing scope and price |
| Progress payments | Payments tied to project milestones |
| Design-build | One company handling both design and construction |
Selling remodeling projects
Remodeling sales are about trust. Homeowners are inviting you into their homes for weeks and spending large sums, so they look for evidence you’ll deliver: a portfolio of similar projects, reviews, clear communication, a detailed written scope and a realistic schedule. Many successful remodelers charge for design and planning, which filters out casual shoppers and gives the customer a clear plan. Keep in touch during long decision periods; many projects close months after the first visit.
Managing subcontractors
Most remodelers rely on licensed electricians, plumbers, HVAC technicians, drywallers and tile setters. Your reputation depends on theirs. Build a bench of reliable trades, confirm their licenses and insurance, agree on scope and pricing in writing, schedule them in a logical sequence, and inspect their work before the next phase begins. Pay subcontractors promptly; reliable payment keeps good trades loyal and available when you need them most.
Marketing a remodeling company
Remodeling customers research carefully. A strong portfolio of completed projects, detailed reviews, and a website with project galleries and clear service pages matter more than ads alone. Many remodelers get their best leads from past clients, realtors, designers and neighbors who watched a project. Keep a list of past clients and stay in touch; they’re the source of repeat projects and referrals for years. See local SEO for contractors and our free remodeling website builder. A short, friendly check-in a year after each project often brings the next one.
Payment schedules and cash flow
Remodeling cash flow depends on payment terms. A common structure is a deposit at signing (within any limits your state sets), progress payments tied to milestones such as demolition, rough-ins, drywall and cabinets, and a final payment at completion. Order long-lead items like cabinets and windows only after deposits clear. Track every project’s costs against its budget weekly, so overruns are caught early, and map your cash month by month with our cash flow forecast.
Design-build or build-only?
Build-only remodelers work from plans created by the homeowner, an architect or a designer, and compete mainly on price and schedule. Design-build firms handle design, selections and construction, which takes more skill and staff but creates a clearer process, fewer disputes and higher margins. Many remodelers start build-only and add design services as they grow, often beginning with simple layout drawings.
How to use these numbers for your own plan
- Start with the closest model above and its cost structure.
- Replace every price and cost with local quotes: insurance, wages, vehicles, materials and your expected prices.
- Estimate your ramp: how many jobs you can realistically win each month in year one.
- Separate fixed and variable costs, then calculate your break-even point with our free break-even calculator.
- Map cash month by month with our cash flow forecast, including equipment and loan payments.
- Build the plan in our free Business Planner.
These figures will also feed a planned Advanton projection tool, so you’ll be able to start from an industry template and adjust it to your situation.
About this data
Workforce figures come from the U.S. Bureau of Labor Statistics (Occupational Outlook Handbook and Occupational Employment and Wage Statistics, May 2024 and the 2024 to 2034 projections). Market figures cite their sources in the list above. Business model figures are illustrative months built from typical prices and costs to show how revenue, fixed costs and variable costs fit together; they are not industry averages or guarantees. We review these profiles when new government data is released, at least once a year. The same figures are available in a structured format for Advanton’s upcoming business projection tool.
Licensing and rules
Most states and many cities require a contractor license for remodeling above a project value, plus building permits and inspections; EPA lead-safe (RRP) certification for work disturbing paint in pre-1978 homes; trade work (electrical, plumbing, HVAC) by licensed trades. Requirements change; confirm with your state and local agencies before you start.
Frequently asked questions
How big is the remodeling market?
Harvard’s Joint Center for Housing Studies projects homeowner improvement and repair spending of about $518 billion by the end of 2026, with growth slowing through the year.
What do carpenters earn?
The BLS reported a median wage of $59,310 for carpenters in May 2024.
Do remodelers need a license?
Most states and many cities require a contractor license above certain project values, plus permits and inspections for most remodels.
Why do remodeling companies take months to become profitable?
Fixed costs such as project managers, offices and crews arrive before projects reach full volume, and sales cycles are long.
How can I use these numbers?
Start with the closest model, then replace every figure with your local prices, subcontractor costs and expected project volume.
Keep learning
- Kitchen and bath remodeler
- Small remodels and handyman work
- Local SEO for contractors
- How to get more contractor leads
- Specialty trades industry data
Sources
- U.S. Bureau of Labor Statistics, Carpenters
- Joint Center for Housing Studies of Harvard University, Remodeling growth set to downshift in late 2026 (LIRA)
Last reviewed October 29, 2026. Startup costs are estimates; check local prices, licensing and tax rules before you commit money.
