How to Start a Demolition Contractor Business

Demolition is needed at every renovation project. It’s hard work and can take a lot of time, but if you’re willing to start your own demolition company it can be very profitable. Many contractors don’t have the time to complete demolition on top of their other responsibilities and are willing to outsource the work to trustworthy, hard-working people who don’t mind getting a little bit dirty. 

As with any business, the hardest part is usually getting started. As a new small business owner, you’ll be embarking on a journey that has no guaranteed success or income, but like all entrepreneurs, you’ve decided the risk is worth it. The renovation and construction industry is booming, and you’ve got the skill and experience required to take on the demo work, you just need some help in the other areas of running a small business. 

If your business is to succeed in the long-term, you’ll need to attract customers. As a demolition specialist, we don’t expect you to have the marketing and business expertise to make this happen right away, which is why we created Bidmii.

Bidmii helps connect independent contractors with homeowners who need projects done well, and fast. We’re here to help get small businesses like yours off the ground, and the good news is, it’s easier than you think. Below, we cover everything you need to do to launch and grow your business, from your business plan and cash flow to getting your first customers and getting paid. We’ll help provide the knowledge and resources you need when you’re starting a business, so you can focus on what you do best.

Table of contents

• Business Plan
• Selecting a Business Structure
• Register Your Business
• Create a Website
• Get Insurance
• Municipal Licensing
• Get Your First Customers
• How to Bid on a Project
• Complete the Project and Get Paid
• Build your Profile

Choose Your Services

The type of projects your demolition business might take on can vary in size and scope, so you’ll need to get specific about the types of jobs you’re willing to take on. Unless you have access to heavy equipment such as an excavator, dozer, or backhoe, it’s probably better to keep startup costs low and start with more manageable small-scale demolition jobs. You can work to add more or bigger services as your business grows. When starting a demolition business, you’ll want to consider the potential issues that might come up during demolition at a job site. Some demolition companies specialize in hazardous materials and have specific licenses and permits to deal with things like asbestos or other hazardous materials. Consider that you may need to outsource some of your work to this type of company, and make sure you’re pricing your services accordingly.

Don’t Forget the Cost of Tools & Equipment

Startup costs are one of the most prohibitive elements of starting any business. In demolition, you’ll need a variety of tools and equipment to make sure you can get the job done safely and efficiently. Examples of tools a demolition contractor might use include:

• Extension ladders
• Scaffolding
• Sledgehammers & crowbars
• Sawzalls or other tearout equipment
• Hammers, wrenches, screwdrivers
• Gas-powered generator
• Fall protection equipment

If you’ve been doing these types of jobs already, chances are you already have some tools and equipment that will come in handy, but since you’re just starting your own business, it’s likely that you’ll have to purchase some additional items. After tools and equipment, your next major investment will likely be a company vehicle and job trailer to haul your equipment. Your company truck and trailer can act as a moving billboard to advertise your business, so it’s worth getting your company logo and phone number on them. This helps build brand awareness and portrays an image of legitimacy and professionalism to your potential customers.

Business Plan & Cash Flow

So you’ve decided you’re starting a demolition business — congratulations! On top of your demolition job, you’ll also need to be a CEO, CFO, business leader, and salesperson, along with several other responsibilities. If you’re serious about running a legitimate demolition contractor business, you’ll have a basic business plan and cash flow. You should know the basic services you’ll offer, and how much you’ll charge for each service, whether that means an hourly rate or a rate for each service you’ll offer. It doesn’t have to be pretty or complicated, but it should lay out your path forward.

One of the biggest reasons your business should have a business plan and initial cash flow is to apply for a small business loan. If you need vehicles, materials, or equipment like saws, jackhammers, or heavy machinery for your demolition business, this will be crucial for you. Keep in mind that you may also need to provide a letter of credit if you’re taking out a loan. Your business plan will include a description of your business, the services you will offer, a summary of who is involved and their responsibilities, how you plan to market your services and operate and manage the business, as well as how much funding you need, if any.

Selecting a Business Structure

A business structure is one of the first decisions you’ll need to make when you start a demolition company. There are 4 standard types of business structures:

• Sole proprietorship
• Partnership
• Corporation
• Cooperative

Each structure type has different pros, cons, and implications, so you’ll need to choose the one that works best for your business. When selecting your business structure, consider your liability. Businesses with higher liability will want to choose a more protective structure, such as a corporation, which costs more than a sole proprietorship but offers benefits such as limited personal liability. Since you’re in the construction business, your potential liability is higher, so it makes sense to protect yourself and your business from the start. Learn more about choosing your business structure.

Register Your Business

Now that you’ve selected your business structure, you’ll want to get your business license. Registering your business protects your business name and proves that your company is a legitimate entity, which means that you can hire employees and complete legitimate work, among other benefits. To register for a business license, you’ll need to provide your business name and structure type, along with information including your address and other details. You’ll also need to pay for your business registration.

Register Your Business in Ontario

Create a Website

In the digital age, if you’re not online, you’re behind. Most owners of small businesses rely on word of mouth and social media to get customers, but a website is a big checkmark that helps to show potential customers that you’re operating as a legitimate company. Your website can be a simple contact page to prove you’re a real business. Many website builders offer a free trial, so you can get a basic website up and running on your own fairly quickly. 

Pro Tip: Your Google business profile will be the largest entry point for your business. Start your site there, and you’ll have an online storefront created quickly for less than $20/year.

Don’t get overwhelmed - just get it launched!

Many business owners will put off launching a website for months because it’s not perfect. In the beginning, you won’t get much traffic, so just make a basic website with relevant information and get it online. You don’t need to spend money on a custom designed website. Once you’ve got money coming in consistently, you can invest more in your website. Just be clear about what you offer. For example, it’s a good idea to include information about the types of jobs you can do, along with your experience in that specific trade. Your customers need to know that your demolition business matches what they’re looking for. If the job requires a full demolition crew with a backhoe and other heavy machinery, they won’t be happy if you show up at the demolition site with a shovel and jackhammer.

Get Demolition Business Insurance

Because you’re in the construction industry, you’ll probably want to consider at least 3 different types of insurance for your demolition business. Demolition can be very dangerous, especially if you’re working on bigger scale projects or impacting the structure of a building. Depending on the types of projects you’ll be doing, you’ll need to cover your general liability and consider factors like workplace safety and fall protection. It’s worth reaching out to several different insurance agents for quotes and advice. The types of insurance you may need include:

General Liability insurance: potential damage you may unintentionally create at a client’s property.

Workers' Compensation: potential injuries to you or others while on the job.

Equipment insurance: theft or damage to your tools and equipment.

Learn the Bylaws and Licenses Needed For a Demolition Company in Ontario

It’s important to note that, depending on the municipality you’re operating in, a demolition contractor may need additional licensing. Different rules and regulations may apply to your demolition business. You’ll want to look into whether your municipality or province requires a contractor’s license or handyman license on top of your business license.

For example, according to bylaws in the City of Toronto, additional license requirements apply to anyone who advertises or solicits for work as a building renovator or building contractor doing renovation work (including altering, repairing, or renovating buildings or structures). This means that if you’re planning to operate your demolition business within the City of Toronto, you’ll need a work permit from the city.  

In order to obtain this permit, you may need to provide additional documentation and submit to project evaluation by city examiners. The local municipal code will detail which trades require city permits, so it’s important to ensure that your subcontractors comply with this rule. If you don’t, you may deal with projects being halted if a representative of the city drops by the job site.

Get Your First Customers

The biggest step to starting your demolition contracting company is getting your first customer, but it can quickly become a struggle between lining up new projects and completing those you’ve already agreed to. Most new business owners are forced to divide their already limited time to the different areas of their business. As a business owner, you’ll need to make an executive decision about where your time is best spent.

To ensure you have new projects coming in, you’ll need to spend time and money on marketing and sales, on top of managing your job sites. Traditional advertising can cost up to $100 per lead for lawn signs, flyers, and more, which is unrealistic when you’re starting your own business. Many successful demolition businesses are preferred contractors for real estate or construction companies, but you may find this tough while you’re just starting out. The good news is, that’s why we created Bidmii. It’s the cheapest, easiest, and fastest way to get your first customers. 

How Bidmii Helps You Earn Your First Customers:

With Bidmii, you’ll lower your business expenses and increase your profitability with one simple tool. You’ll never have to pay for marketing expenses and materials because we’ll provide a direct link to your customers. Just create a free profile, select the types of projects you’re interested in, and receive daily notifications for new projects through SMS and emails that  connect you with homeowners in your area. You can immediately start bidding on projects you want, send offers to potential customers, and engage in direct conversations with customers in your area. 

How to Bid On a Demolition Project

Bidding on a project is easy and it helps provide upfront insight into your profitability on each project. If you’re just starting out, you may want to seek advice from other professional demolition companies on how to price projects, but in general, you should always make sure you can account for your costs. 

Example Project Bid: Demolition

Paul from Cambridge wants his shed demolished, so he posts a project on Bidmii. You see the email notification on your phone and decide to put in a bid. You estimate that you will incur around $500 in material removal. With this in mind, you decide to quote the job at $1100. Mike accepts the bid, and you’re left with at least $600 profit on your first job, and you only spent money out-of-pocket on your handyman business registration, expenses, and materials.

Your Proposed Price: $1,100

Equipment & Expenses: $500

Total Profit: $600

Complete the Project and Get Paid

This is why you’re really here and why you started your demolition business in the first place. With Bidmii, you won’t have to spend your valuable time chasing payments from your customer. You’re protected by our terms and conditions, so you’ll receive payment directly into your account as soon as a project (or project stage) is marked as completed by both parties. 

Build your Profile

Congrats, you’ve completed your first project! If you do high-quality work, you’ll be rewarded with honest, verified ratings and reviews from your customers about your completed projects directly on Bidmii. As you grow your business with Bidmii, homeowners will feel more and more confident using your services which will help you compete for more (and bigger) projects. 

Want To Build Your Business Using Bidmii?

Bidmii is the fastest, easiest, and cheapest way to earn new customers for your demolition business. We’ll help you find new clients and make lasting relationships with homeowners in your area. By completing projects you’ll earn a strong reputation through ratings and reviews based solely on your skillset and communication.

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