If you’ve been in construction your whole life, then there’s a good chance you’ve considered going into business for yourself. Starting a construction business is an amazing way to earn more for the work you do, but it doesn’t come without its challenges; it’s about understanding how to manage a business, dealing with clients, keeping up with trends and skills within the industry, and most importantly, offering the best service for people in your area. Sounds daunting, right? Let’s take a look at how you can set up a successful construction business and hopefully avoid any mishaps along the way.
Understand the construction industry
If you’re thinking of going into the construction industry as a business owner, there’s a good chance you already have a working knowledge of the construction market. However, it won’t do you any harm to check out the demand in your area. Is your area leaning more to residential builds? Or, maybe it’s bustling with commercial demand? You’ll also need to familiarise yourself with local building codes, zoning laws, and any permits of certifications you might need. Not only does this help you make sure you’re complying with legal standards from day one, but it helps you identify where you can fit into the market.
Create a business plan
While your main goal as a construction business is to acquire as many clients as possible to make as much money as possible, it’s important to have a detailed business plan in place. This plan should include your goals, target market, pricing and financial projections. You would also benefit from having a few reports on your competitors so that you can make a strategy to get ahead. If you’re looking to speak to investors about funding, this business plan is going to be what makes the difference between getting that cheque and not being able to get your business off the ground.
Make sure you detail how you plan to run your business. Is there anything that makes it stand out from the crowd that would be appealing to investors? The types of projects you’ll take on and how you plan to grow your business are also useful details to have in your business plan. So, before launching anything, make sure you have this plan created and know what your vision is.
Register your business
Once your business plan is in place, it’s time to register your business. Choose a suitable and catchy business name and decide what kind of business you’re going to be (such as sole proprietorship, partnership, LLC or corporation). It’s important to remember that the legal structure you use for your business will have implications on your taxes and your personal liability, so make sure you know what you’re choosing is right for you. Once you’ve decided, register your business under your local government’s regulations and make sure you apply for any licences or permits, as mentioned earlier.
Unfortunately, starting a construction business will require a significant amount of funding to begin with. You’ll need equipment, insurance, some sort of office space, marketing, and even labour (unless you’re going to be working alone) – and these things aren’t cheap! You should start by taking a look at different financing options such as bank loans, investments from potential partners, or even any personal savings you may have. As mentioned above, make sure you have a solid business plan and pitch ready if you’re planning to look for investors as this will help highlight how profitable your business could be.
Boost productivity with technology
In this day and age, you almost need to use technology to help run your business if you want to be at the top in your industry. However, you don’t always associate technology with a construction industry. But, there are things like field service quoting software that you can use because it allows you to quickly provide accurate job estimates for your clients. It also helps simplify tasks like creating, managing and following up on quotes you’ve made to potential clients. Not only that, but it reduces the chance of any human error, which could save you time and money in the long run. Take the time to look at various pieces of technology that could help you maximise your time, resources and efforts for your business. While it might be an initial investment, it will soon pay for itself and you’ll be glad you did.
Insurance and liability
As you already know, insurance is so important in the construction industry. You’ll need to look into getting:
- General liability insurance
- Workers’ compensation
- Professional liability insurance
It may seem like a lot, but these policies help protect your business from any lawsuits from accidents, injuries or any other unforeseen event that could damage your business financially. The list above isn’t exhaustive, so make sure you look into other types of insurance that you may need to avoid any devastation for your company.
Equipment and tools
Your tools and equipment are your most significant assets, and it’s important not to scrimp back when it comes to buying equipment and tools for your business. While investing in high-quality tools will set your back initially, they can help make sure that the work you’re doing is safe and efficient. They are also more likely to be durable than cheaper versions, which means you’re less likely to have to repair or replace it any time soon. This goes for everything from heavy machinery to PPE for your staff (if you hire any). If you’ve worked with certain brands before and trusted the equipment, then it’s a good idea to stick with them. However, if you’ve always found anything you’ve used before to be a little unreliable, then take the time to research high quality equipment and tools for your construction business.
Hiring a team
If you are planning to hire a team, then it’s important to focus on finding skilled and experienced workers. While hiring an intern of sorts may look like it will save you money, you’ll be spending your valuable time training them up, which could cost you more in the long run. You also need to make sure you’re following local labour laws when it comes to hiring, employee rights, wages and any benefits you might provide.
Remember that your team represents your business, so hiring well, making sure that any new training available is given to your employees should be high on your priority list.
Pretty much all new businesses start off small and unheard of, so it’s important to get your marketing strategy right from the very beginning. You’ll need a website, social media presence and put email marketing into place. You should also concentrate on SEO and local SEO so that your business is found organically too. On the flip side, you will also need to look into more traditional methods like local adverts in newspapers, flyers and networking events. Make sure you have a strong portfolio to display on all forms of marketing to show people what you have to offer. Gathering customer testimonials will also help strengthen your credibility when potential clients read your adverts.
If you’re not very experienced in marketing, then it’s a good idea to hire someone who knows what they’re doing. This could be a permanent in-house role, but you could also outsource this position so that you don’t have to add another wage onto your outgoings. Getting your marketing efforts right from the start will make a world of difference to your business!
Following compliance and safety rules
You will also need to make sure you stay compliant with local building codes and safety standards. That’s why regular training for you and your team is essential. Compliance isn’t just about avoiding legal issues, it’s about making sure that your employees and clients are safe at all times. If something goes wrong and you haven’t followed safety rules or provided training, you could face a hefty lawsuit, which will damage your reputation and your finances.
Networking and building relationships
You may not realise it, but networking is a very powerful tool in the construction industry. Look out for local business groups and join them, attend industry events, and build up rapport with suppliers and contractors. Not only does this help you make sure you get the job done properly and on budget, but it can also lead to new business opportunities or a collaboration of some sort.
Staying on top of your finances is so important if you want your business to be successful. Be meticulous with keeping accurate records of all transactions you make. You can use accounting software to keep on top of this, but if you’re worried about missing something, then you should hire a professional accountant. Taking care of your finances helps make sure that you always have the funds available for all business operations, whether that’s paying wages or buying materials for your next job.
As you can see, there’s a lot to think about when it comes to going into the construction industry. Take these tips into consideration and good luck with your new venture!