How to Start a Niche Contracting Business


With the construction and housing markets roaring back to life, there is ample opportunity for those with a construction or contracting background to start their own company. One of the problems a lot of new contractors struggle with is the temptation to market themselves as a company that can do any kind of contracting work, instead of becoming a local “expert” at one kind of job that there is local demand for.

A great example of a contractor who is successful in a construction niche in Southern California: many homes built in the 1980’s and 1990’s have large open spaces with 25-foot high ceilings that some homeowners consider both a waste of space and a recipe for high electric bills. This contractor has built a nice steady business marketing himself as a “loft conversion” specialist and he is just about the only contractor for 100 miles marketing himself as such.

Due to this specialization, when a homeowner thinking about a loft conversion searches in his area and comes across his company, it is clear immediately upon working with him that he knows more about loft additions and does more loft additions than anyone else in the area. As a result he wins a large percentage of his bids, and, within reason, the selection of his company over others isn’t about price – so he enjoys good profit margins.

Steps to Get Started With Niche Contracting

If you think starting a niche-based business is right for you, the steps to take are actually pretty easy:

  • Pick a niche
  • Find a way to finance your new business
  • Market your new business

These three steps may sound a little overly-simplified, so let’s go over each of them:

How to Pick a Contracting Niche

If you’re planning on being a small contractor, you don’t have to find a huge niche. An easy way to start thinking of niches: go to contractor websites that list dozens of services that they provide, and if you look at enough one will probably jump out at you as something that you have the know-how to do and that not many companies in the area seem to be specializing in.

Here’s a quick list of a few “big” categories-vs.-niches to give you an idea of niche thinking:

  1. Plumbing services vs. repipe specialist
  2. Landscaper vs. koi pond building expert
  3. Painter vs. texture painting specialist

Virtually every category of contracting has a huge potential for endless subcategories within – just find one that matches your expertise and run with it.

How to Fund Your New Contracting Business

So, you’ve got a great niche business idea, but it costs some money to start a business, so in most cases you’ll need to find some startup capital. Becoming a repiping company isn’t exactly as sexy as saying you’re going to start the next Facebook, so most business owners look for some form of startup loans.

In contracting, the most important loans new businesses tend to look for is for equipment. In most cases, if you’ve got decent credit or some sort of collateral, equipment leasing is available to startup businesses.

Equipment leasing rates for a brand new business aren’t typically cheap, but they tend to be much more cost effective than renting equipment or buying the oldest junk you can find that may break down on you and also have a negative impact on your image.

How to Advertise Your New Business

Once you’ve found your niche and gotten access to some money and equipment, you’ll need to get the word out. There are dozens of ways to advertise your new business and the “right” way is different for each business, but in general:

Setting up a good website advertising yourself as the local [insert niche here] expert is a good way to get found on Google when people search for the specific service you provide.Advertise daily in online directories such as CraiglistBuying advertising in the monthly coupon books that go out to homeowners is both cheap and effectiveWhile many people find these methods to be difficult – they are extraordinarily difficult to stand out in as a generalist (such as “plumber”) but not difficult at all to stand out for if you are one of the only businesses in your geographic area that advertises themselves as the “expert” that only focuses on XYZ specialty.

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