Starting a home staging business can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful home staging business.
Importantly, a critical step in starting a home staging business is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.
14 Steps To Start a Home Staging Business:
- Choose the Name for Your Home Staging Business
- Develop Your Home Staging Business Plan
- Choose the Legal Structure for Your Home Staging Business
- Secure Startup Funding for Your Home Staging Business (If Needed)
- Secure a Location for Your Business
- Register Your Home Staging Business with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Home Staging Business
- Buy or Lease the Right Home Staging Business Equipment
- Develop Your Home Staging Business Marketing Materials
- Purchase and Setup the Software Needed to Run Your Home Staging Business
- Open for Business
1. Choose the Name for Your Home Staging Business
The first step to starting a home staging business is to choose your business’ name.
This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your own home staging business:
- Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
- Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing. Come up with a name that reflects the desired brand and/or focus of your home staging business.
2. Develop Your Home Staging Business Plan
One of the most important steps in starting a home staging business is to develop your business plan. The process of creating your plan ensures that you fully understand your local real estate market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.
Your business plan should include the following sections:
- Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your home staging business.
- Company Overview – this section tells the reader about the history of your home staging business and what type of home staging business you operate. For example, are you a traditional home staging business, home staging consulting service, home staging furniture rental business, or a home staging photography business?
- Industry Analysis – here you will document key information about the home staging industry. Conduct market research and document how big the industry is and what trends are affecting it.
- Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing services like the ones you will offer?
- Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
- Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
- Product: Determine and document what products/services you will offer
- Prices: Document the prices of your products/services
- Place: Where will your business be located and how will that location help you increase sales?
- Promotions: What promotional methods will you use to attract customers to your home staging business? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
- Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
- Management Team – this section details the background of your company’s management team.
- Financial Plan – finally, the financial plan answers questions including the following:
- What startup costs will you incur?
- How will your home staging business make money?
- What are your projected sales and expenses for the next five years?
- Do you need to raise funding to launch your business?
3. Choose the Legal Structure for Your Home Staging Business
Next you need to choose a legal structure for your own home staging business and register it and your business name with the Secretary of State in each state where you operate your business.
Below are the five most common legal structures:
1) Sole proprietorship
A sole proprietorship is a legal business entity in which the owner of the home staging business and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.
A partnership is a legal structure that is popular among small business owners. It is an agreement between two or more people who want to start a home staging business together. The partners share in the profits and losses of the business.
The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.
3) Limited Liability Company (LLC)
A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a home staging business include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.
4) C Corporation
A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a home staging business is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.
5) S Corporation
An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.
Once you register your home staging business, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.
4. Secure Startup Funding for Your Home Staging Business (If Needed)
In developing your home staging business plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a home staging business to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a home staging business that they believe has high potential for growth.
5. Secure a Location for Your Business
To find a location for your home staging business, start by looking for areas that are popular for home buying and selling. Try to find a commercial space that is close to these areas. Additionally, consider the cost of rent and whether the area has a lot of competition from other business owners. You’ll also want to make sure that the space is large enough to accommodate your staging equipment and furniture.
6. Register Your Home Staging Business with the IRS
Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).
Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.
Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.
7. Open a Business Bank Account
It is important to establish a bank account in your home staging business’ name. This process is fairly simple and involves the following steps:
- Identify and contact the bank you want to use
- Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
- Complete the bank’s application form and provide all relevant information
- Meet with a banker to discuss your business needs and establish a relationship with them
8. Get a Business Credit Card
You should get a business credit card for your home staging business to help you separate personal and business expenses.
You can either apply for a business credit card through your bank or apply for one through a credit card company.
When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
9. Get the Required Business Licenses and Permits
A business license is required to start a home staging business. In addition, you may need a contractor’s license, and other permits depending on your location and the scope of your business.
10. Get Business Insurance for Your Home Staging Business
The types of insurance you need to operate a home staging business will depend on the type of business.
Some business insurance policies you should consider for your home staging business include:
- General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
- Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
- Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
- Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
- Professional liability insurance: This protects your business against claims of professional negligence.
Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.
11. Buy or Lease the Right Home Staging Business Equipment
To start a home staging business, you will need some basic equipment. This includes a computer, phone, and printer. You may also want to consider investing in some furniture and accessories to help stage homes.
12. Develop Your Home Staging Business Marketing Materials
Marketing materials will be required to attract and retain customers to your home staging business.
The key marketing materials you will need are as follows:
- Logo: Spend some time developing a good logo for your home staging business. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
- Website: Likewise, a professional home staging business website provides potential customers with information about the services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
- Social Media Accounts: establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your home staging business.
13. Purchase and Setup the Software Needed to Run Your Home Staging Business
You will need software to manage your business finances, including invoicing, tracking expenses, and generating reports. You’ll also need a customer relationship management (CRM) system to track leads and customers. Additionally, you’ll need a project management tool to help you plan and coordinate your staging projects.
14. Open for Business
You are now ready to open your home staging business. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.
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How to Start a Home Staging Business FAQs
Is it hard to start a home staging business?
No, it's not hard to start a home staging business, but there are some important steps to take in order to make sure your business is successful. The most important step is to create a business plan. This document will outline your business goals and strategies, and how you plan on achieving them.
How can I start a home staging business with no experience?
To start a home staging business with no experience, you can begin by doing some research on the industry. There are a lot of resources online that can help you get started. You can also find classes or workshops that can help you learn the basics of home staging.
Another option is to find a mentor. There are plenty of experienced local real estate agents and home stagers who would be happy to help you get started. They can teach you the ropes and give you advice on how to grow your business.
What type of home staging business is most profitable?
The type of home staging business that is most profitable is one that specializes in preparing homes for sale. This type of business can help homeowners get their homes ready to sell quickly and for a higher price.
How much does it cost to start a home staging business?
The cost of starting a home staging business can vary depending on the size and scope of the business. However, in general, you can expect to spend between $1,000 and $5,000 to get started. This includes items such as business licenses, marketing materials, furniture and equipment, and training.
What are the ongoing expenses for a home staging business?
The ongoing expenses for a home staging business can include advertising, marketing, and website design and maintenance. Other expenses may include employee wages, insurance, and rent or lease payments.
How does a home staging business make money?
A home staging company can make money by charging homeowners or home sellers for its services. Home staging businesses usually charge a percentage of the total cost of the home, or they may charge by the hour for the staging jobs they complete. Some businesses also charge for their furniture and accessories.
Is owning a home staging business profitable?
Yes, owning a home staging company is profitable because it is a low cost business to start, there is a high demand for the service, especially in the real estate business, and many home staging companies are home-based businesses. Many home stagers also offer complementary services such as interior design, which increases their profits.
Why do home staging businesses fail?
There are many reasons home staging companies can fail. One reason may be that the business does not have a clear target market. Another reason may be that the business doesn't differentiate itself enough from its competitors. Additionally, the company may not have a good marketing strategy. Finally, the business may not have a solid financial foundation.