Carole Petterson, Negosentro | Setting the Foundation for a Successful Construction Startup | Privately held construction companies showed a significant growth of income in the previous year. This represents huge prospects for companies at all levels of this industry, whether we are talking about residential or commercial construction. However, this branch is not without its risks, especially for startups, which are only beginning to enter this unforgiving arena. There are a lot of things you need to have in mind if you want to set this kind of business off to a good start. Although there are many risks of making a mistake in this line of work, the following tips should help you establish and run a successful construction business.
Get the legal things in order
The first thing you should do before establishing your own construction business is learn all the legal requirements for that in your state. When your business is compliant with all relevant laws, regulations, and standards you will look better organized and more professional to potential investors and clients. So, check all the permits, licenses, certifications, and registrations that are obligatory for your business, and be aware that these vary, not only by state, but also by city and locality. If necessary, you can hire a lawyer.
Find a home base
At first, you might feel tempted to start operating your business from your home, but that will make you appear unprofessional. A home-based construction company is only an option if you have separate offices and enough storage space (e.g. spacious garage). The adequate storage space should be able to keep tools and equipment, while the space outside should be enough to park vehicles used in business.
Secure the financing
Construction startup requires significantly larger investments than many of the other popular businesses, because you will need money for the equipment, vehicles and payrolls. You should secure funds before you sign your first contract, so apply for financing as soon as possible.
Get the necessary equipment
Depending on the type of the construction you will work on and the amount of funds you’ve gathered, you’ll be able to afford buying some more affordable, but essential pieces of equipment, such as an automatic measuring stop, a forklift and a hoist, while you can rent other heavier machines like a bulldozer, a road roller and an excavator as needed. You will also need vehicles for transporting the material.
Understand tax and insurance
Do not try to figure out the complicated roads of taxes. It is best to hire an accountant to prepare you for the future and manage your books. As for the insurance, make sure you do not protect exclusively your business assets, but also yourself from work-related injuries, damage to the client’s property and liability.
Build a network
Before you start building buildings as a construction startup, you should build a network of people and companies that are useful for your business. Those are business associates, suppliers, and other contractors. This way, you will always be able to get the most profitable deal. Also, you should have a good relationship with professional building inspectors.
Hire the staff
Every business’ success depends on the employees working in the company in question. That’s why you need to be sure you have hired the best professionals, especially when it comes to people on the most responsible positions, such as architects. As for the workers, you can decide to hire contractors only when you need them. This gives you the chance to save money on benefits and avoid paying them a salary when the business is slow.
Invest in branding and advertising
Although there is still room on the job market for more construction startup companies, the competition is fierce, and you need to find a way to get through to potential clients. This requires a branding and advertising strategy, that needs to be done both online and offline.
Finally, you need to be aware that construction business is constantly changing and improving, and you need to keep up. For now, that progress is reflected in new materials, machines and construction management software that allows you to streamline and automate various work-related processes.