How to start a siding business from the ground up

Starting a siding business is a rewarding venture that combines skilled craftsmanship with business savvy. The siding market is a multi-billion dollar industry, fueled by steady demand from new home construction, remodeling projects, and commercial property upgrades.

This guide will take you through the practical steps of validating your business concept, securing funding, obtaining necessary licenses, and acquiring equipment to help you launch a successful siding business in the U.S.

Step 1: Plan your business and research the local market

Start by analyzing your local area. Check public records at your county clerk’s office for recent building permits. This data shows you where construction and renovation are active. Also, use real estate sites to find neighborhoods with homes built 20-30 years ago, as they are prime candidates for siding replacement.

Next, identify your competition. Use Google Maps to find siding contractors in your service area. Look at their websites, the services they offer, and customer reviews on platforms like HomeAdvisor and the Better Business Bureau. This helps you find gaps in the market.

Estimate your startup costs

Startup costs can vary, but you should budget for key categories. A reliable used work truck might cost between $15,000 and $25,000. Quality equipment, including scaffolding, saws, and safety gear, will likely run from $5,000 to $15,000. Some new owners buy cheap gear, which often slows down jobs.

In addition, set aside funds for insurance and licensing, which could be $2,000 to $5,000 for your first year. An initial marketing budget for a website and local ads might be around $1,000. Your total initial investment will likely fall between $23,000 and $46,000.

Here are 3 immediate steps to take:

• Research building permit data for three target zip codes.
• List five local competitors and note their primary services and customer ratings.
• Create a startup budget with line items for a vehicle, equipment, and insurance.

Step 2: Set up your legal structure and get licensed

Choose your business structure

Most new siding contractors form a Limited Liability Company (LLC). This structure protects your personal assets, like your house and car, if the business faces a lawsuit. You can file for an LLC through your state's Secretary of State website, usually for a fee of $50 to $200.

A mistake some new owners make is operating as a sole proprietor to save on fees, but this offers no liability protection. It is a risk not worth taking when your work involves people's homes. An LLC provides a vital safety net from day one.

Secure your licenses and permits

Once your business is registered, get an Employer Identification Number (EIN) from the IRS. It’s free and you can apply online. You will need an EIN to open a business bank account, file taxes, and hire employees in the future.

Next, check your state's contractor licensing board. Requirements vary, but you will likely need a specialty contractor's license for siding. The application fee often runs between $250 and $500, with a processing time of four to eight weeks.

For each project, you will also need a building permit from the local city or county building department. Permit costs depend on the job's value but typically start around $100. Always factor this into your project quotes.

Finally, familiarize yourself with Occupational Safety and Health Administration (OSHA) standards. OSHA governs job site safety, especially for scaffolding and fall protection. Following these rules protects your crew and your business from heavy fines.

Here are 4 immediate steps to take:

• File for an LLC with your state’s Secretary of State.
• Apply for a free Employer Identification Number (EIN) on the IRS website.
• Identify the specific contractor license requirements from your state board.
• Look up the building permit application process on your local county’s website.

Step 3: Insure your business and manage risk

Key insurance policies for siding contractors

Your LLC protects your personal assets, but business insurance covers job site accidents. Start with General Liability insurance. A $1 million per occurrence policy is standard and costs between $1,200 and $3,500 annually. This covers third-party property damage, like a ladder that falls on a client’s car.

Some new owners opt for lower coverage to cut costs. This is a mistake. A single large claim can easily surpass a small policy limit, which puts your business finances at risk. Always secure adequate coverage from day one.

Next, get Commercial Auto insurance for your work truck, as personal auto policies will not cover business use. Also, look into Inland Marine insurance. This policy protects your tools and equipment whether they are in transit or at a job site.

Even if you start solo, you will need Workers’ Compensation insurance as soon as you hire your first employee. It covers medical costs and lost wages for job-related injuries. Requirements vary by state, so check your local laws.

You might want to consider providers that specialize in contractor insurance. Companies like Hiscox, The Hartford, and Next Insurance understand the risks of the trade and can offer tailored policies. A specialized agent often finds better coverage and rates.

Here are 4 immediate steps to take:

• Request quotes for a $1 million general liability policy.
• Contact an insurance agent who specializes in contractor coverage.
• Review your state’s workers’ compensation laws for employers.
• Compare rates for a commercial auto policy for your work vehicle.

Step 4: Set up your shop and buy equipment

Find a home base for your business

You do not need a large facility at first. A 500 to 1,000-square-foot storage unit or small warehouse works well. Look for spaces zoned for light industrial or commercial use. This gives you room for your truck, equipment, and material storage without high overhead.

When you find a spot, try to negotiate a one-year lease instead of a longer term. This provides flexibility as your business grows. Some landlords may agree to a shorter term if you offer a slightly higher monthly rate. It is a worthwhile trade-off.

Purchase your core equipment

Your equipment directly impacts job quality and speed. A mistake some new owners make is to buy cheap gear, which often slows down jobs and requires early replacement. Plan to invest in durable, professional-grade items from the start.

Here are some key purchases and their typical costs:

• Aluminum Brake: A 10-foot brake for bending metal trim costs $2,000 to $3,500.
• Scaffolding: A pump-jack system for two-story homes runs $1,500 to $4,000.
• Saws: A quality miter saw and circular saw will cost $600 to $1,200 combined.

With your equipment ready, you can establish accounts with suppliers. National distributors like ABC Supply and Beacon Building Products are good places to start. They often work with new contractors and can help you open a trade account for materials.

Here are 4 immediate steps to take:

• Identify three local storage units or warehouses zoned for commercial use.
• Get price quotes for a 10-foot aluminum brake from two different brands.
• Research pump-jack scaffolding systems suitable for residential work.
• Contact a major siding supplier like ABC Supply to ask about opening an account.

Step 5: Set up your payment processing

Most siding jobs use a 50/50 payment structure. You collect a 50% deposit upfront to cover materials and secure the job, with the final 50% due upon completion. A mistake some new owners make is starting work without a deposit, which is a risky move if a client backs out.

You need a simple way to accept payments, especially on-site. Look for a solution with low transaction fees and fast access to your money. Many providers charge between 2.5% and 3.5% plus monthly fees, which can add up quickly.

For siding businesses that need to accept payments on the go, JIM offers a streamlined solution. With JIM, you can accept debit, credit, and digital wallets directly through your smartphone. Just tap and you are done. It is particularly useful for collecting deposits right after a client signs a contract.

At just 1.99% per transaction with no hidden costs or extra hardware needed, its rate is lower than the average commission rates from other payment providers. Getting started is straightforward.

• Get Started: Download the JIM app for iOS.
• Make a Sale: Type the sales amount, hit sell, and ask your customer to tap their card or device on your phone.
• Access Funds: Your money is available right on your JIM card as soon as the sale is done - no waiting for bank transfers.

Here are 3 immediate steps to take:

• Draft standard payment terms (e.g., 50% deposit) for your contracts.
• Compare the transaction fees of two different payment processors.
• Download the JIM app to explore its features for on-site payments.

Step 6: Fund your business and manage finances

Plan to have enough cash to cover operations for your first six months. This working capital, typically $10,000 to $20,000, pays for fuel, insurance, and marketing before your first checks arrive. It is a safety net that keeps the business running smoothly.

Secure your funding

The Small Business Administration (SBA) is a great starting point. Their Microloan program offers up to $50,000 with interest rates often between 8% and 13%. These loans are designed for new businesses and have more flexible qualification requirements than traditional bank loans.

Another option is equipment financing. Lenders provide funds specifically for your brake, saws, and scaffolding. The equipment itself serves as collateral, which can make approval easier. Rates vary based on your credit, but it keeps your cash free for other expenses.

A mistake some new owners make is relying on personal credit cards. The high interest rates, often over 20%, can quickly drain your profits. You might want to secure a business line of credit from your bank instead for short-term cash needs.

Here are 4 immediate steps to take:

• Calculate your estimated operating costs for the first six months.
• Visit the SBA website to review the Microloan program details.
• Ask your equipment supplier if they offer financing partnerships.
• Open a separate business checking account to manage your funds.

Step 7: Hire your crew and set up operations

Build your team

Start by hiring a skilled Siding Installer. This person is the backbone of your field operations, so look for someone with at least two years of experience. A good installer typically earns between $20 and $28 per hour, depending on their skill level.

As you grow, you can add a Crew Lead to manage the job site and communicate with clients. This role usually pays $25 to $35 per hour. Some new owners try to save money with unskilled labor, but this often backfires with poor installations and unhappy customers.

Focus on training and safety

For safety, ensure your crew completes OSHA 10-hour training. You might also have them get a Vinyl Siding Institute (VSI) Certified Installer credential. This certification shows clients you meet industry standards and can be a strong selling point for your business.

Streamline your workflow

Once you have a few jobs lined up, manual scheduling gets messy. Consider software like Jobber or Buildertrend to manage projects and send quotes. It keeps your operations organized as you scale and helps you look professional from the start.

A productive two-person crew can often generate $250,000 to $400,000 in annual revenue. Aim to keep your labor costs between 30% and 40% of each project’s total price. This ratio is a good benchmark to ensure your jobs remain profitable.

Here are 4 immediate steps to take:

• Write a job description for a Siding Installer with a competitive pay rate.
• Look up the Vinyl Siding Institute (VSI) certification program online.
• Sign up for a free trial of a scheduling software like Jobber.
• Create a basic safety checklist for your job sites based on OSHA guidelines.

Step 8: Market your business and get customers

Start with direct marketing in the neighborhoods you researched. A budget of $200 can get you about 1,000 professional door hangers. Distribute them in areas with older homes, as these are your prime targets for siding replacement jobs.

Next, establish your online presence. Set up a free Google Business Profile to appear in local search results and on Google Maps. You should also build a simple one-page website to showcase photos of your work and provide clear contact information.

You might want to explore lead generation services like Angi or Thumbtack. Leads can cost between $40 and $100 each. A mistake some new owners make is to pay for leads but not call them immediately. You should follow up within 15 minutes to have the best chance of booking the job.

Build relationships with other local contractors, like roofers and painters, for referrals. After each job, ask for a review on your Google profile. Good reviews are your best marketing asset and help you win future bids against more established competitors.

Here are 4 immediate steps to take:

• Set up a free Google Business Profile for your company.
• Design and print 500 door hangers for a target neighborhood.
• Research the cost per lead on a platform like Angi for your service area.
• Ask a local roofer or window installer about a referral partnership.

Step 9: Price your services and create quotes

Most siding jobs are priced per "square," a 10x10 foot area. For standard vinyl siding, a common price is $400 to $800 per square. Fiber cement siding can run from $700 to $1,300 per square. This price should cover your materials, labor, and profit.

Calculate your costs and markup

First, add up your direct costs like siding material, trim, and fasteners. Then, factor in labor, which should account for 30% to 40% of the total project price. This ensures your crew is paid fairly without hurting your margin.

A mistake some new owners make is forgetting overhead. Add a percentage for insurance, marketing, and fuel to each job. After all costs are tallied, apply a markup of 30% to 50% to determine your final price. This is your gross profit.

To see if your pricing is competitive, you might want to call a few local competitors for a quote on a hypothetical project. This gives you a real-world baseline for your market. Just be sure to compare their services and materials to your own.

Here are 3 immediate steps to take:

• Determine your price per square for both vinyl and fiber cement siding.
• Create a quote template that itemizes materials, labor, and overhead.
• Call two local competitors to get a sample quote for a 1,500-square-foot house.

Step 10: Control quality and scale your operations

Establish your quality standards

Your reputation is built on quality. A key metric to track is your callback rate for repairs, and you should aim for a rate below 5%. You might also encourage your lead installers to get a Vinyl Siding Institute (VSI) Certified Installer credential to signal professionalism.

After each job, perform a final walkthrough using a checklist. Check for straight lines, proper nailing, and clean trim work. This simple process catches mistakes before the client does and reinforces your commitment to excellence, which helps avoid costly return trips.

Plan your growth

When your lead installer is consistently booked more than four weeks out, it is a good signal to hire another crew member. A mistake some owners make is expanding too quickly without the cash flow to support a larger payroll. Have three months of wages saved before you hire.

As you add crews, manual scheduling becomes difficult. Software like Jobber or Buildertrend helps manage multiple projects, crews, and client communications. This keeps your operations smooth as you scale from one crew to two or more.

Here are 4 immediate steps to take:

• Create a final walkthrough checklist for your job sites.
• Look up the requirements for the VSI Certified Installer program.
• Set a revenue or scheduling benchmark that will trigger your next hire.
• Sign up for a free trial of a construction management software.

You have the steps to launch your siding business. Remember that your final walkthrough is your last chance to impress a client. A reputation for quality work is built one perfect job at a time. With a solid plan, you are ready to start.

And when it is time to collect payment, a simple solution like JIM turns your phone into a card reader. You can accept payments on-site with no extra hardware for a flat 1.99% fee. Download JIM and get paid on the spot.