01Put Together a Solid Business Plan
Before opening a new construction business, it is important to understand the amount of preparation and work that is involved. Establishing a new business of any kind is never easy, and there are always things to consider that may or may not be at the forefront of one's mind, even an experienced entrepreneur. Are you ready to launch your construction startup? Here are 10 things that should be at the foundation of your plans.
Your business plan should clearly establish the goals of your construction business. It should include detailed plans for every stage involved in the process along with the timeframe and funding you will need to meet each of your goals. Include anything you believe relates to the smooth operation of your business. Your business plan needs to be thorough since you will need to supply copies of your plan to financial institutions when attempting to borrow funds.
02Find a Good Home Base for Your Startup
While many construction startups begin in the owners’ homes, eventually you will want to move into more official business premises to legitimize the business. The property you choose as a home base will need to have adequate office and storage space since you will likely be storing equipment and tools onsite. The location you choose should also have ample space for parking vehicles used in the business.
03Get Your Legal Ducks in a Row
The best way to establish your business as a professional operation and to instill confidence in it is to show that you are organized, efficient, and compliant with all relevant regulations, laws, and standards. Be certain of all the certifications, licenses, permits, and registrations that are mandatory for the business. These vary by state, city, and locality, so do your homework. Hire a lawyer if necessary.
04Understand Your Tax Requirements
Hire an accountant and iron out what documentation you will need to have on file for your deductions. Audits are not terribly common, but they do happen, so you want to be prepared and you want your books to be accurate.
05Understand Your Insurance Responsibilities
Arrange a meeting with an insurance agent and talk with him or her about the coverages required for your business. You need to protect not just business assets, but also yourself should work-related injuries, personal liabilities, or damage to clients' property occur. Both you and your business need to be fully covered.
06Secure Your Financing
You will need to purchase, rent, or lease equipment, tools, and vehicles to get your business started. You will also need to pay your bills, invest in advertising, and meet payroll. You will need to secure funds before you bid on your first contract, so apply for financing early on.
07Network With Suppliers, Business Associates, and Other Contractors
Open accounts with several suppliers and establish credit with them. You will need to have a good relationship with other contractors so you have people to call upon to help you complete jobs you either cannot finish yourself or don't have the time to complete within the deadline. You will also need to establish good relationships with industry professionals, including building inspectors.
08Decide Whether to Hire Employees or Contractors
Will you keep full-time staff or simply hire contractors when you need them? There is greater flexibility and lower cost involved with dealing with contractors since you don't have to pay benefits (in most cases) or continue providing a salary when business is slow. At a minimum, though, you might consider having a full-time assistant whom you can train to know all the ins and outs of your business and keep things running smoothly. People also appreciate hearing a familiar voice when they call your place of business.
09Establish an Advertising and Marketing Budget
You might decide that your advertising needs are as simple as signage for your job sites. You might also decide you need more—radio, TV, and online marketing, like a website and blog. You will also want to create a logo to establish your brand. Other recommended promotional items include business cards, brochures, and, eventually, a business portfolio. Whatever you do, don't skimp on the marketing. Allocate more than you think you'll need for it.
Don't forget to allocate some funds for construction management software to run your business, as this will allow you to streamline and automate various processes. The right software solutions can eliminate hours' worth of work per project, even per day.