4 Things to Consider Before Starting a Construction Business
Thursday May. 30th, 2019
photo from pixabay
Almost everywhere you go, there is some kind of construction. So many roads are being expanded or redone, a new house is being built down the street and that new shopping center is popping up.
You may leave for a few months and come back to a part of town that looks completely different than it did before.
Construction is also a job that seems to have endured all the tests of time and a job sector that is expecting growth over the next decade. Unfortunately, nothing ever stays in absolute perfect condition and people will always want buildings or homes to look newer.
If you’re thinking about getting into the construction business, consider the following list before making the big jump.
Design your Business Plan
You’ll want to think of what exactly your business will be doing. Construction can be a broad term. Are you going to build houses? Remodeling? Additions? All of the above?
Think about going deep instead of going wide. It’d be great if you could service anything and everything out there, but that’s not possible.
Lay out a clear plan for yourself so you’re not left wondering what the next step is going to be. It’s just like when you had to write a paper for your English class in high school; having that outline was a great way to keep you focused and lasered in on your next objectives.
Ask for Help
Starting a construction business is similar to starting any other small business. So when you start your business, you might have to wear a lot of hats at once. When you come to an area you don’t feel particularly well-versed in, it’s time to ask for help.
You may need an HR rep to help you lay out your policies and hire people. You will need an accountant to help you on the money side of things. You may need an assistant to help you take calls, plan everything or find an office space.
There is no shame in asking for an expert’s opinion. They studied long and hard to put themselves in that position and you would be wise to ask for their assistance.
The Red Tape
You can’t simply walk outside and say, “Right now, I am starting a construction business” and have it be so. You’ll need to obtain a license and insurance.
For starters, every state has different licenses for different trades. If you plan on doing anything from electrical work, plumbing, HVAC, gas fitting or construction, you are going to need a license. You’ll need to head down to your local state business office to get any information on what you’ll need or what you’ll have to do.
You may also need surety bonds, depending on exactly what kind of work you’re in. Surety bonds ensure that a third party will pay your client if you are unable to fulfill your duties outlined in the contract.
Lastly, you’ll need insurance, and a lot of it. A construction area can be a dangerous place and you’ll want to protect yourself from anything and everything. You may need to get insurance on your equipment, business, workers, vehicles and anything else.
The Money Side
You’re going to be putting a lot of money into the business to start and it’s a good idea to look where you can save money. You don’t want to buy the cheapest equipment but you can look to rent when the time comes up.
Examine your business from top-down and see what kind of items you’ll need right off the bat. You’ll want to get an exact number so you don’t buy too much or too little.
There are lots of places that offer small business loans to get you off the ground and you’ll want to examine each one and see which is best for you. Do you research and talk to experts before making any big decisions.
When it comes to hiring, you'll generally be pulling from four areas: subcontractors, hired employees, labor brokers or independent contractors. Hire people with solid reputations and those you can trust. This is where having a good accountant and tax expert can help you weave your way through hiring each different kind of employee.