How to Start a Renovation Business in Ontario: Step-by-Step Guide + Funding Options

Renovation businesses are in high demand in Ontario where the construction industry has seen significant growth in recent years.

According to Statistics Canada, the construction industry contributed 7.7% to Ontario’s GDP in 2021. The sector also employed 534,000 people, comprising 7.2% of Ontario’s workforce in 2021.

This presents a lucrative opportunity for entrepreneurs looking to start their own renovation business.

Starting a renovation business comes with several advantages. Firstly, the construction industry is thriving, meaning there is a high demand for renovation services.

Secondly, the government of Ontario provides numerous incentives and support programs for small businesses, including those in the construction industry.

Finally, running a renovation business allows you to work in a creative and dynamic field, where each project is unique.

However, starting a renovation business also has its challenges. One of the main disadvantages is the high competition in the industry, with many established companies already operating in the market.

Additionally, starting a business requires a significant investment of time and money, and there are numerous legal and regulatory requirements that must be met.

In this article, we will explore the steps involved in starting a new renovation business in Ontario, and provide tips on how to overcome the challenges associated with starting a business in this industry:

Step 1: Develop a Business Plan

Developing a business plan for your renovation business can help you define your goals, identify your target market, anticipate challenges, develop a financial plan, and secure funding.

It can also help you stay focused and on track as you start and grow your business. Here are the steps you can take to create a working business plan:

  • Executive Summary: The executive summary is a brief overview of your business plan. It should highlight your business idea, target market, and goals of your business.
  • Business Description: This section should describe the nature of your renovation business, the services you offer, and your unique selling proposition.
  • Market Analysis: In this section, you need to conduct market research and analyze your competition. Identify your target market and the needs of your potential customers.
  • Marketing and Sales Strategy: Develop a marketing and sales strategy to reach your target market. Include details such as pricing, promotional activities, and sales channels.
  • Operational Plan: This section should detail your business operations, including the equipment, tools, and materials required to carry out your services. You should also include information about the suppliers, staff, and subcontractors you will work with.
  • Management and Organization: Detail the management structure of your business, including the roles and responsibilities of each team member. Identify your key personnel, their qualifications, and their experience.
  • Financial Plan: The financial plan should include your startup costs, projected revenue, and cash flow analysis. This section should also include financial projections for the next three to five years.
  • Appendices: Include any additional information that supports your business plan, such as market research, resumes of key personnel, or legal documents.

Step 2: Choose Your Business Structure

Choosing a business structure is critical as it can affect liability protection, tax implications, ownership and management, perpetual existence, and access to funding.

It’s important to carefully consider your options and even consult with a legal and/or financial professional to make the best decision for your specific situation.

The steps below can help you in choosing a business structure:

  • Understand the different business structures: The most common business structures in Ontario are sole proprietorship, partnership, and corporation. Each structure has different legal and tax implications.
  • Consider your personal liability: Sole proprietors and partnerships offer no legal separation between the business and the owner. This means that the owner is personally liable for any debts or legal claims against the business. A corporation, on the other hand, is a separate legal entity, and the owner’s liability is limited to their investment in the business.
  • Consider your tax obligations: Each business structure has different tax implications. A sole proprietorship and partnership are not separate legal entities, and the owner reports business income on their personal tax return. A corporation is a separate legal entity, and corporate income is taxed at a lower rate than personal income.
  • Consider your growth plans: If you plan to grow your business or seek investors, a corporation may be the best choice as it can issue shares to raise capital.
  • Consult with a lawyer and accountant: It is important to consult with a lawyer and accountant to help you understand the legal and tax implications of each business structure and to help you choose the right structure for your renovation business.

Step 3: Register Your Business

Registering your business is not only a legal requirement, but it can also provide several benefits such as legal protection, access to business loans and credit, and credibility with customers and suppliers.

Failure to do so can result in fines and other penalties.

Here are the steps to take to register your business with the government:


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    • Choose a business name: Choose a unique and memorable name for your business that is not already in use by another company in Ontario. You can search for business names on the Ontario government’s website to ensure it is available.
    • Determine your business structure: Decide on the type of business structure you want for your renovation business. The most common types of business structures in Ontario are sole proprietorship, partnership, and corporation. Each type has different legal and tax implications, so it is essential to choose the right one for your business.
    • Register your business name: Once you have chosen your business name, register it with the Companies Branch of the Ministry of Government Services. You can register your business name online or in person at a ServiceOntario location.
    • Register for a business number: Register for a Business Number (BN) from the Canada Revenue Agency (CRA). This number is required if you plan to hire employees or charge GST/HST.
    • Register for taxes: If you plan to collect GST/HST, you will need to register for the Harmonized Sales Tax with the CRA.

    Step 4: Get the Necessary Licenses and Permits

    In Ontario, many municipalities require permits for construction and renovation projects, including building permits, plumbing permits, and electrical permits.

    These permits ensure that the work being done meets safety standards and building codes.

    Additionally, certain types of renovations, such as those involving asbestos or lead-based paint, may require specialized permits or licenses.

    To obtain the necessary permits you should:

    • Determine the permits and licenses required: Depending on the type of renovation work you plan to undertake, you may require permits and licenses from various government agencies. For example, if you plan to install a new electrical system, you will need an electrical permit. Similarly, if you plan to handle hazardous materials, you may require a special permit. Contact the Ministry of Labour, Training and Skills Development to determine which permits and licenses are required for your renovation business.
    • Apply for the permits and licenses: Once you have identified the necessary permits and licenses, you can apply for them. The application process may vary depending on the permit or license required, and some applications may require you to provide additional documentation or undergo an inspection. Some applications can be completed online, while others require you to submit the application in person or by mail.
    • Pay any applicable fees: Some permits and licenses may require a fee to be paid when you submit your application. The fee will vary depending on the type of permit or license required and the duration of the permit.
    • Wait for approval: After you have submitted your application and paid any applicable fees, you will need to wait for the approval. Depending on the permit or license, the approval process may take several weeks. It is important to plan ahead and apply for permits and licenses well in advance of any renovation work you plan to undertake.
    • Display your permits: Once you have received your permits and licenses, display them in a prominent location at your place of business. This will show that you are operating legally and may be required during inspections.

    Step 5: Obtain Insurance

    Renovation work can involve risks such as property damage, personal injury, and liability for faulty workmanship. Insurance can provide financial protection in case of an accident or lawsuit.

    Having insurance can help protect your business and give you peace of mind, knowing that you are covered in case of an accident or lawsuit.

    Here are the steps you can take to obtain insurance:

    • Determine the type of insurance you need: As a renovation business owner, you’ll need insurance coverage that protects your business and your clients. Some common types of insurance for renovation businesses include commercial general liability insurance, property insurance, and professional liability insurance.
    • Research insurance providers: Look for insurance providers that specialize in business insurance for renovation companies. You can start by searching online, asking for recommendations from other business owners, or contacting your local Chamber of Commerce for referrals.
    • Request quotes: Contact several insurance providers and request quotes for the types of insurance you need. Be sure to ask about deductibles, coverage limits, and any exclusions or limitations.
    • Compare quotes: Once you’ve received quotes from several providers, compare them carefully to find the best coverage at the most competitive price.
    • Purchase insurance: Once you’ve selected an insurance provider and coverage, complete the application process and purchase your insurance policy.
    • Review and update your insurance regularly: As your business grows and changes, it’s important to review and update your insurance coverage regularly to ensure that you’re adequately protected.

    Step 6: Hire Employees

    Depending on the scope and scale of your business, you may be able to operate as a sole proprietor or with a small team of contractors or subcontractors.

    If you do decide to hire employees, there are certain legal requirements that you will need to meet.

    Here are some points to consider:

    • Determine your hiring needs: Before you start recruiting, determine your hiring needs. What positions do you need to fill? What skills and experience are required? What is your budget for salaries and benefits?
    • Develop job descriptions: Write clear job descriptions for each position you need to fill. Be specific about job duties, required skills and experience, and any necessary qualifications or certifications.
    • Advertise job openings: Advertise your job openings on online job boards, local newspapers, and industry publications. You can also post job openings on your company website and social media accounts.
    • Review resumes and applications: Review resumes and applications carefully, and select candidates who meet your job requirements. You may also want to conduct phone or video interviews to narrow down your list of candidates.
    • Conduct in-person interviews: Invite top candidates for in-person interviews. Be prepared with a list of questions to ask, and give candidates an opportunity to ask questions about the position and your company.
    • Check references: Before making a job offer, check references to verify a candidate’s work experience and skills.
    • Make a job offer: Once you’ve selected the right candidate, make a job offer that includes the job title, salary, benefits, and any other relevant details.
    • Complete necessary paperwork: Once the candidate has accepted the job offer, complete all necessary paperwork, including tax and employment forms.
    • Train new employees: Provide new employees with training on company policies and procedures, job duties, and safety protocols.

    Step 7: Establish a System for Accounting and Bookkeeping

    As a business owner, you are required by law to keep accurate financial records and report your income and expenses to the CRA for tax purposes.

    It is essential to seek guidance from a financial professional, such as an accountant or bookkeeper, to ensure that you are setting up your accounting system properly and complying with all relevant laws and regulations.

    Here are some steps to get you started:

    • Choose an accounting method: There are two primary accounting methods, cash basis, and accrual basis. Choose the method that best suits your business needs.
    • Select accounting software: Select an accounting software program that is user-friendly and provides features such as invoicing, expense tracking, and financial reporting.
    • Set up a chart of accounts: A chart of accounts is a list of accounts used to track financial transactions. Set up a chart of accounts that aligns with your business needs.
    • Establish a bookkeeping schedule: Establish a regular bookkeeping schedule to ensure that financial transactions are recorded accurately and in a timely manner.
    • Record financial transactions: Record all financial transactions, including income, expenses, and payments, in your accounting software.
    • Reconcile bank statements: Reconcile bank statements on a monthly basis to ensure that all financial transactions are accounted for and to identify any discrepancies.
    • Generate financial reports: Use your accounting software to generate financial reports, including balance sheets and income statements, to monitor your business’s financial health.
    • Monitor cash flow: Monitor your cash flow regularly to ensure that your business has enough funds to cover expenses and to identify any cash flow issues.
    • Consult with an accountant: Consider consulting with an accountant to ensure that your accounting and bookkeeping system is set up correctly and to get advice on tax planning and financial management.

    Step 8: Market Your Business

    It is important to develop a marketing plan that is tailored to your specific business goals and target audience.

    Marketing helps increase your business’s visibility and makes it easier for potential clients to find you. This can be especially important in a competitive industry like renovation.

    Here’s how you can create a marketing plan for your business:

    • Identify your target market: Identify your target market by determining the demographics and psychographics of your ideal client. This will help you tailor your marketing message to appeal to your target audience.
    • Develop a marketing plan: Develop a marketing plan that includes a strategy for reaching your target market, the channels you will use to promote your business, and a budget for your marketing activities.
    • Build a website: Build a professional website that showcases your renovation services, previous projects, and client testimonials. Ensure that your website is mobile-friendly and optimized for search engines.
    • Create a social media presence: Create social media profiles on platforms such as Facebook, Instagram, and LinkedIn to connect with potential clients and showcase your work.
    • Utilize paid advertising: Utilize paid advertising platforms such as Google Ads, Facebook Ads, or LinkedIn Ads to target potential clients and drive traffic to your website.
    • Network with industry professionals: Attend industry events, join local business organizations, and network with other renovation professionals to build relationships and generate referrals.
    • Offer promotions or incentives: Offer promotions or incentives such as discounts, referral bonuses, or free consultations to attract new clients and generate interest in your services.
    • Utilize content marketing: Create blog posts, videos, and other types of content that showcase your expertise and provide value to potential clients. Share this content on your website and social media platforms.
    • Measure and track your marketing efforts: Use analytics tools to measure the effectiveness of your marketing activities and track your return on investment. Adjust your marketing plan as needed to optimize your results.

    Step 9: Invest in Tools and Equipment

    The specific tools and equipment you will need will depend on the type of renovation work you do.

    For example, if you specialize in kitchen or bathroom renovations, you may need specialized plumbing tools or tile-cutting equipment.

    If you focus on larger-scale renovations, you may need heavy-duty power tools like saws, drills, and sanders.

    Here is how you can create a tool and equipment investment plan:

    • Make a list of the tools and equipment you need: Make a list of the essential tools and equipment you need to run your business. This list should include items such as saws, drills, hammers, ladders, safety equipment, and other specialty tools based on your specific renovation services.
    • Determine your budget: Determine your budget for purchasing tools and equipment. Consider both the initial purchase cost and ongoing maintenance costs.
    • Research suppliers: Research suppliers of the tools and equipment you need. Look for suppliers who offer high-quality products at a reasonable price and provide good customer service.
    • Compare prices and features: Compare prices and features of different brands and models of the tools and equipment you need. Consider factors such as durability, functionality, and ease of use.
    • Purchase or lease equipment: Decide whether to purchase or lease the equipment you need. Purchasing equipment may be more cost-effective in the long run, but leasing may be a better option if you need to conserve cash flow or plan to upgrade your equipment frequently.
    • Arrange financing: If you need to finance your equipment purchases, consider options such as bank loans, equipment financing, or leasing. Look for financing options with favorable terms and low-interest rates.
    • Train employees: Ensure that your employees are trained on how to properly use the tools and equipment you purchase. This will help prevent accidents and increase productivity.
    • Maintain and repair equipment: Develop a maintenance and repair plan for your tools and equipment. Regular maintenance will help extend the life of your equipment and prevent costly repairs.


    ​​Starting a renovation business in Ontario can be a challenging but rewarding endeavor. With a booming construction industry, government support, and the potential for growth, there has never been a better time to start your own renovation business.

    By following the steps outlined in this article, you can overcome the challenges and set your business on a path to success.

    Remember, starting a business is not an easy feat, and it will require hard work, dedication, and a willingness to learn and adapt.

    However, with the right mindset and the right tools at your disposal, you can build a thriving renovation business that makes a positive impact on the community and the economy.

    We hope this guide has provided you with the information and resources you need to start your journey as a successful renovation business owner!

    Resources for Renovation Business in Ontario

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