Here’s another post in my Genius Business Idea series one day after the first. This one came during the same homework assignment as yesterday’s, I hope indicating great ideas can come quickly. Like many ideas, this one also came from personal experience. For all I know, such a profession already exists, but I don’t know about it so I’m writing it up anyway.
The unmet need
If you’ve had your home renovated, you know overruns in time and budget happen a lot. Home renovations often involve experienced contractors and an inexperienced homeowner so homeowners don’t know if the contractor is doing a good job and don’t understand sources of overruns. Contractors often can’t explain reasons for overruns and aren’t good at managing clients. Since no one involved can speak the languages of both parties, communication suffers.
This situation doesn’t work well for anyone. Some contractors use their better knowledge to milk money from the homeowner. Such short-term gains probably hold them back from future referrals, perhaps hurting them in the long run. In any case, difficult relationships extend projects and make life worse for everyone involved.
The service
The idea is to apply what works in selling apartments, where brokers facilitate transactions. How about an “Home renovations broker”? The idea could work in commercial work too, but I’ll refer to the client as a homeowner for simplicity.
The renovations broker’s role is to manage process, representing the homeowner. This person would be skilled in renovations so he or she can speak language of contractor and skilled in client management so he or she can speak language of homeowner. This person would visit the construction site regularly, updating the homeowner on the one side and helping the contractor on the other, solving problems representing the homeowner’s interests.
While you might at first think the contractor wouldn’t want the extra person meddling, this person would relieve contractor of client management, which they often aren’t skilled at. I expect they’d prefer to work with a skilled, knowledgeable person who speaks their language than an unskilled, ignorant person who is liable to speak with more emotion than reason.
The most important result is that it makes the project finish faster. Since contractors generally get paid on a project basis, finishing faster means more jobs, which means more money. The homeowner obviously likes getting their home back sooner too. My stepfather, who has plenty of construction experience, did the role for my sister, who has little, when she had her home renovated and everyone involved said it improved their experience and got the job done faster.
At the same time, this person could reassure the client (the homeowner) on the contractor’s work quality and effort.
This person wouldn’t provide much physical labor, though could help if necessary on small parts of the project. Mostly this person needs experience having done construction work themselves.
This person’s web page would have ratings and past customers reviews for transparency.
Want to do it?
If you like the idea, feel free to run with it. You wouldn’t need that much capital to start it. Mostly finding people with contracting experience willing to take on the role and marketing, I’d think, then it’s mostly salaries. You’d probably have to train them in client management skills, maybe in negotiation.
I haven’t searched to see if people are doing it already.
About entrepreneurship
I want to reinforce that the main point of this series is to show how ideas are easy to create. I don’t claim to have much experience in this field, so people with experience could improve it. I hope they do, and run with it. If you do, please let me know because I’d love to find my ideas made the world better for someone.
It’s funny I came across your above article…I’m actually in the process of creating something similar. It’s a long difficult journey to create everything the way I have it planned, but it’s sort of like your idea but blown up a bit.
Based on my experience with renovations, I see the need. If you meet your clients’ needs I hope you succeed and influence the market.
Joshua, I actually have my company up and running. TheconstructionBroker.com. Getting some good prospect to date. Been in the industry for over 30 years, time to re invent myself.
I wish you luck! I wish I’d worked with a broker.
have you had anything further on this? Would be interested to hear as i thought of this idea also independently.
I haven’t followed up on it but I hope someone does. I think it could help a lot of people. I wouldn’t mind paying for the service.
Great Site. Having worked as a Project Manager for a Class A contractor and saw how subs got bullied and Home Owners ripped off. Extensive knowledge of Brokering and contracts would be needed aside from the contract knowledge IMO. I have the brokering skills so I’m going to give it a whirl in the Hampton Roads area. Will keep you posted!
Thank you!
Good luck if you take on the practice. I’d love to hear you succeed and help home owners and contractors alike. I’d love to hear that you help start an industry that put the problems I faced into the past.
Thanks Josh. I’m already in discussions with a few contractors. I’m trying to decide how to schedule my fees. Do you think %10 is fair, or to high/low. On a 30k bathroom remodel job that would leave me 3k for finding the job and offering project management services. I get paid on the draws by the contractor.
All right! … I like seeing someone taking action instead of just planning forever.
Pricing is always a challenge for a new product or service. You have to make sure you’ll cover your costs and it doesn’t take more of your time than it’s worth, but you don’t want to lose too many customers. My strategy is generally to start low, telling early customers that they’re guinea pigs to manage expectations, and say part of the reason I’m giving them a discount is that if they are satisfied, to motivate them to leave stellar testimonials, ideally by video.
Another strategy is to segment the market by offering tiered service. Some people want white-glove turnkey service and are willing to pay a premium for it. Others want the bare minimum and a discount. Can you offer perks or tiers that allow you to charge more for people willing to pay for it or ways to discount people who can’t? Then you can let them choose how much they’ll pay.
Then, with experience, you can raise prices as you learn your market more and your skills improve.
Thank you Joshua and you all for the comments and ideas, I am about to embark in this new business model, I have 25 years of selling and marketing experiemcr in different industries, and have done construccion for 5 years now. I was approach by a few subcontractors asking for help to get bigger projects, now I have a better idea how to start, charge and services to offer.
You’re welcome and thank you for updating us.
Congratulations on diving in and good luck! Please keep us apprised. I hope to hear you have satisfied customer on both sides and are hiring more people. I wish I could have hired someone in this position when I renovated.
Wow… thought I had a genius idea for coming up with this about a month ago. Actually about to make some major headway in implementing this in Texas. I’d love to connect Joshua.
I’m happy to be of service, to prevent others having to live with incompetence like Sweeten.com caused for me https://joshuaspodek.com/company-review-thesweeten-ruined.
it’s very informative post, i was searching for the same post. Thanks for sharing with us.
independent broker dealer
This must be like a broken record…I knew someone had to have thought of this first but I also independently thought this up and in doing some research found this post. I too will be giving this model a go in the Denver area.
I wish more people thought of it and did it. I would have gladly used the service.
I hope your business thrives and helps lead to better construction results and better relationships between homeowners and contractors.
I’d love to network with more folks who are running their construction brokering operations. I’ve been a lone ranger in certain niche’s in the Denver market.
Entering this world of brokering industrial and commercial construction projects. This was a need one of our consulting customers recently had, no time to do due diligence or vet sub-contractors in a market they were unfamiliar with! We saw an opportunity and filled the need. Now we are trying to add “our network” or “brokering” to our services offered and stumbled upon your article trying to figure out what to call these new services… The key now is the cost… i’m working on a percentage based on project scope and total spend…. for our first project, we charged a referral bonus to the performing contractor which they happily paid to enter a new market. Unfortunately, I don’t see that being a sustainable model. Still working out details, but for us, for now, it will be a case by case basis…
would welcome any feedback anyone has to offer… contact me on my website: http://www.hse.team
Glad to see someone filling the need. From my experience, I wish you success helping homeowners and contractors.
I’m intrigued by this idea. I come more from the high touch customer service side. Would this model allow me to avoid going through the whole contractor’s license process and simply do the vetting of the contractors that I cultivate in my “go to pool”?
Good question. Several people have contacted me about starting a service like this, but I haven’t started one myself. If you started one yourself, you could choose your way. Otherwise, if anyone has started one, and I hope some have, they’ll have chosen how to do it.
I hope you’re interested in starting it because I think the world could use it.
I’m running with this. I already had the idea but found your article inspiring and supportive. Looking forward to reading more of your ideas
Glad to hear! The service can help people. I hope you’ll update me on how it goes.
Hello and good day to you I wanted to tell you that I myself have been thinking of this idea and I have had my doubts about starting this up because I currently have a business that takes up most of my time but in all honesty my heart isn’t in it. Tomorrow I’m going to go to my local home depot and start looking for contractors that can do the work I’m going to bring there way threw marketing and dedication I will succeed as a construction broker I really see this as a sign hope you too can run with this idea and make a profitable living from it have a blessed day and let’s keep shaping this idea until it becomes a diamond the potential is there…..
Even if you don’t do it, posting shows demand, which may prompt the people who eventually make a business of it. Or maybe people will contact you or me to make it happen.
It’s been years since the contractor I first worked with and I still almost daily am reminded of poor work that is too expensive or impossible to fix without major new renovations. If only a broker had existed, I would have used that service and recommend it to others.