Starting a construction business (or any business for that matter) is by no means an easy task, but it can be a very lucrative venture for those who understand the industry and have the skills and experience behind them. Many construction startups fail in the first few years, often because people try to run before they can walk and they omit to take care of the basics before they launch. Every business, like every building, needs solid foundations before it can grow. If you are considering launching your own construction business, here are 7 steps to take to ensure you have your foundations in place.
1. Write your business plan
A business plan sets out the goals you want your business to achieve in the early years with details of each stage of development. This includes how the business will attract customers, the services it will provide, market research which will inform your operation and your financial plan. Your construction business needs tools and equipment and whether you choose to rent or buy them, you will need money to do so. You will also need to consider how you will pay for marketing, wages, utilities and other services.
2. Find the right premises
While your business might start in your home, soon enough you will need premises to at least store the equipment and tools you are using. Having official premises which are not a residential address can also help to make the business appear more professional and trustworthy. Take a look at this guide to choosing the right business premises.
3. Register your business legally
To show that your business is legitimate and to meet your legal obligations, you need to register your business in your local area and state. There are likely to be certifications, permits and licenses which you need in order to operate, so make sure you are satisfying all the legal requirements.
4. Familiarize yourself with tax obligations
Find yourself an accountant who can guide you through all of your tax obligations and how you can ensure you are compliant.
5. Get adequate construction insurance
It’s important that your business has the right level of construction insurance to ensure that you, your assets, your employees and customers are all protected should something go wrong during one of your jobs.
6. Consider employees or contractors
You will need to decide if you will take on full or part-time staff, or will you hire contractors on an as-and-when basis? Contractors can be the more flexible option in the beginning as you won’t have to provide benefits and they will file their own taxes, but you may need at least one or two full-time staff to handle the day to day administration and organization.
7. Allocate a marketing budget
Some construction businesses are content with placing signage outside the sites where they are working to advertise, while others like to think a bit more creatively. There are plenty of potential advertising and marketing channels to consider but there is a big difference in terms of the costs involved. Digital marketing, i.e., having a website, social media presence, advertising on search engines and sending marketing emails can be effective for startups because they are low cost marketing methods, but traditional business cards and brochures can also be effective.