How to Start a Construction Business

Before opening a construction business, understand that doing so takes a lot of groundwork. Not only do you need to think about how you are going to pay the start-up costs, but you need to decide how you are going to complete your projects. Consider the following steps if you are hoping to start a construction business.

Steps

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1. Put together a business plan that establishes your construction business goals. Add how your proposal will come into fruition and include stages involved, timeframe and funding. Include anything else that you feel relates to the operation of your business. You may need to submit a copy of this business plan to a financial institution if you are planning on applying for funds.
2. Search for a home base for your construction firm start-up. You will need a property that provides an office for your administrators, large storage space for tools and equipment and parking for your construction vehicles. Note that some construction owners work from their home. You could begin your business at home, but as it grows, you may want to consider finding an official site to legitimize your business.
3. Set your business up in accordance to the law. Find out what licenses, registrations, certifications and permits are mandatory for your construction business, per your location. If you want to appear professional, then you need to set your business up officially and be recognized as a legitimate business.
4. Make sure that you are adhering to your tax requirements. Meet with an accountant, and find out what documentation you need to keep on file for deductions and in case of an audit.
5. Meet with an insurance agent and find out what kind of coverage you require. Not only will you need to protect all your business assets, but you will need to cover yourself in the event of work related injuries and client's property damage. Make sure that you and your new construction business are fully covered.
6. Arrange financing for your construction firm. You will need to lease or buy vehicles, equipment and tools to start your business. Additionally, you will have to pay bills, advertise and, if you have staff, you will need to pay salaries. In order to get your business started, and assuming you don't have the funds readily available, you need to apply for financing.
7. Establish positive relationships with suppliers, other contractors and trade business associates. You should open accounts with suppliers and set up credit with them. You will also need the assistance of other contractors to complete jobs that you cannot do, don't have time to do or need assistance completing. Additionally, you will need to partner with building inspectors and other professionals in the industry.
8. Decide whether you will be hiring assistants full-time or contracting help when you need it. The latter allows for more flexibility in a volatile industry. For example, you don't have to keep paying a staff even during a quiet period. Additionally, if you didn't like working with a specific contractor, you don't have to hire that person again.
9. Establish a marketing budget. You could opt for methods as simple as putting out a sign at the site of your jobs to something more elaborate like a television ad. Create a logo for the company, there are plenty of ways to create a custom logo on a small business budget. Be sure to put the logo on signs and business cards, people will affiliate that logo with your great work. Take pictures of projects as they progress from before to after. You can create a portfolio that you can show to potential clients. You can also create a website and include the pictures. Marketing your construction business start-up should be one of your priorities when starting out. Therefore, set aside a fund specifically for this purpose.

Tips

• Learn the art of bidding, if you will be quoting your own jobs. Your prices need to take into account the cost of materials, labor and profit. At the same time you need to remain competitive. Consider hiring an administrator who is experienced in bidding projects. Your administrator can quote jobs in a timely fashion, while you focus on completing projects. You could also have the same person submit invoices and collect your payments on time so you have the funds to pay for materials without accruing excessive interest.

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