This is an excerpt from Entrepreneur Magazine’s Ultimate Homebased Business Handbook by James Stephenson and Rich Mintzer available from Entrepreneur Press .
Renovating Your Workspace
If you can use the space that you have selected with only minimal renovations, you are wise to do so. Sometimes, however, you will have to renovate your workspace or other areas of your home to accommodate your new business. This is especially true for professionals setting up practices at home and for people engaged in manufacturing or assembling products at home.
Renovating your workspace can be challenging for a number of reasons. There is the noise and disruption that result. Also, if the renovations are extensive, you’ll have to deal with the mess. In addition, there’s the time factor. Once you have decided to start a home business, you want to get moving as quickly as possible so that you can begin to recoup some of the money you’ll be spending. Finally, there’s the cost. Renovating is not cheap, especially when you consider that skilled tradespeople charge upward of $50 per hour plus the costs of materials. If you can get by with the workspace that you have without renovations, you should do so. However, if you must renovate your home to accommodate your new business, the information in this section should help.
Do It Yourself or Hire a Contractor?
Once you have action and design plans and know exactly what you need, the next step is to decide if you can do the work or if an experienced contractor is necessary. Certainly, if the job is uncomplicated and if you have the time, tools, and talents necessary to do the work, by all means do it. It can save you a substantial amount of money on labor costs. If the job is small, but outside your comfort zone, you may be able to hire a local handyperson. If you do so, expect to pay about $40+ per hour plus the cost of materials. If however, your new workspace is a major renovation that includes upgraded mechanicals, removing walls, installing new doors, and so forth, you will be well advised to hire a professional contractor.
If you decide to hire a contractor, the following are a few tips:
- Explain the type of business that you will be starting and show the contractor your plans, equipment lists, and other information relevant to the renovation. Doing so will help the contractor understand what you want and he or she may offer some cost-saving suggestions.
- Obtain three quotes, basing your decision not only on price, but also on value, quality, and reputation.
- Call each contractor’s references to make sure past clients were satisfied with the jobs. If possible, try to get a look at a home office that the contractor has built or substantially renovated.
- Before selecting a contractor check with your local chapter of the Better Business Bureau to make sure the contractor has no unresolved complaints outstanding. I say “unresolved” because complaints that have been resolved are generally not a sign of trouble, but unresolved complaints usually are.
- Get a contract in writing, signed by both parties. Make sure that it specifies the scope of work and all details.
- Obtain proof of liability insurance and workers’ compensation insurance from the contractor before the job begins.
- Arrange for favorable payment terms in four installments: 25 percent deposit, 25 percent progress installment, 25 percent on substantial completion, and the balance 30 days after full competition of the renovation.
- Inspect materials delivered to the job site before they are used, to make sure they are what is specified in the scope of work and contract.
- Know which party is responsible for securing building permits and if the costs of these permits are included in the estimate. This is very important. If you renovate without a permit and the required inspections from your local municipality, if any structural, electrical, or other mechanical problems arise with the work that has been done, your insurance company may not compensate you if the work was completed illegally.
- Make sure that all warranty information is included in the written agreement. The workmanship portion of the warranty should be a minimum of five years from the date of completion.
- Don’t be totally focused on cost. Remember: this is a job that you want to tackle only once. You may save $500 now by not installing an outside door into your workspace, but if you decide to install one later, the cost can easily be as much as five times what it would have cost when the crew and tools were there for the renovation.
- Make sure that your contract specifies a completion date. Some renovation projects have taken far longer than expected. A “finish” date for the job is essential.
Whether you plan on doing the required renovations yourself or hiring a contractor, it is wise to have a general idea of the costs associated with the renovation before getting started or asking for quotes and bids on the job. Following is a basic Renovation Costs Worksheet (Figure 7.1) that you can use to estimate the costs of renovating your workspace. Add or delete items according to your specific needs. To arrive at the cost per unit or total cost of some items or services, you will need to make a few calls and visit your local home improvement store to check product prices.
The full article here: http://www.entrepreneur.com/article/207306