It takes a lot of work to own your own construction business.You need to think about how you are going to pay for the start-up costs and come up with procedures for marketing yourself and completing your projects.It is possible to have a successful construction business if you plan ahead.
Step 1: Market research is important.
You need to understand your market before you start a business.Information about market trends specific to the construction industry in your area can be found in industry publications.The U.S. Small Business Administration can be used to find industry information.You should find out what other companies offer similar construction services in your area, how much they charge, and what kind of reputation they have.You can learn more about your community's needs for construction services by talking to local residents and business owners.The demographic of your area is important.The people in your community will be able to afford the services you provide.
Step 2: A business plan is important.
A business plan is an important step in starting a business.Everything you need to know about starting and running a business can be found in this formal document.You will need to present your business plan to any potential lender, so be sure to put plenty of time into developing it.Your business plan should explain in detail how you will structure and manage your business, what kind of services you provide, who your target market will be, how many employees you hire, and how much competition you face.If you've never written a business plan before, you might want to consider hiring a professional to help.
Step 3: Get support.
If you're starting a business, you might benefit from the advice of a mentor.You can get matched with a mentor from your industry for free.The Small Business Development Center can give you guidance.Veterans can get help from the Veteran's Business Outreach Center if they look into it.
Step 4: You have to decide where you will run your business.
There needs to be an office for administrators, large storage space for tools and equipment, and parking for construction vehicles.The owners of the construction company work from home.As your business grows, you may want to look for an office location.If you run your business out of your home, you will need a special license.Even if you run your business from home, you will need to budget for a few office-related expenses, including a dedicated business phone line, an organized work area, and maybe a PO box.
Step 5: Get the funds you need.
Depending on where you operate and what services you provide, the startup costs for a construction company can be vastly different.You will need funds to lease vehicles, equipment, and tools.You will have to pay bills and salaries.You need to apply for financing if you don't have the funds.Even if you are not approved for a traditional loan, the U.S. Small Business Administration can help you with financing.If your business qualifies for a government grant, be sure to check out grants.gov.
Step 6: At the state level you can register your business.
To create a legitimate business, you need to register it with the state in which you intend to operate.The Secretary of State's website has complete instructions on how to register a business in your state.Before you start the paperwork, be sure to come up with a name for your business.It is possible to check with your state's filing agency to make sure no other business is using that name.You should check with the U.S.The name should not be trademarked by another business.Each of the business structure options has pros and cons, as well as its own legal requirements and fees.Tax benefits are not protection from personal liability.Corporations protect the company's owners from personal liability, but they are taxed at a higher rate.A combination of tax benefits and liability protection for small businesses is offered by limited liability corporations.
Step 7: The IRS requires you to register.
You need to apply for an EIN from the IRS in order to comply with federal tax laws.It's very easy to apply for an EIN.You can do it on the IRS website, by fax, or over the phone.All you have to do is answer a few questions.
Step 8: You can get a license in your state.
You need to apply for a general business license in the state in which you operate in order to legally operate your business.You will need to apply for specialty licenses based on the services you offer.In many states, a tradesman license is required to provide certain types of construction services.Check with your state's business license office to find out what you need for your business.
Step 9: You need to get insured.
In order to protect yourself and your business, you will need a variety of comprehensive insurance policies.Meeting with an insurance agent to discuss your insurance needs is a good way to find out what kind of coverage you need.If you have employees, there are additional insurance requirements.Depending on your state, you may be required to carry workers' compensation, unemployment, and/or disability insurance.
Step 10: Make sure that you have surety bonds.
If you don't complete your work as agreed upon, your clients will be protected by a surety bond.Each state has different requirements for surety bonds for construction companies.Look up your state's requirements online or meet with a surety bond agent to find out what you need.To be approved for a surety bond, you need to prove to the provider that you are experienced, capable, and financially secure.The Small Business Administration can give you a surety bond if you can't get approved by a third party.The bonds cost between 1% and 2% of the project cost.
Step 11: Follow all industry rules.
You need to make sure you are in compliance with all the laws that regulate the construction industry once you start working on a project.Proper procedures for dealing with and disposing of hazardous materials, as well as energy efficiency standards, are good things to know.Don't forget about building permits.You will need to know the proper procedure for applying for permits in your area and your work needs to be up to local building code standards in order to pass the inspections.
Step 12: You need to meet your tax obligations.
It's important for you to keep track of your expenses and costs because you will be responsible for paying business taxes.If you don't have the time to do it yourself, you might want to hire an accountant.
Step 13: Sell equipment.
It's important that you have the right equipment for the job.Depending on the type of project you are accepting, the required equipment will vary a lot.When you're just starting out, buying used equipment is a great way to save money.Renting may be economical for equipment that you rarely use.
Step 14: Hire employees.
Unless you plan on doing all of the work yourself, you will need a team of skilled and reliable workers.You can find jobs on popular job boards.Make sure you only hire people who can do the job.It's possible to save money if you hire your own team of full and part-time employees.You will have to pay payroll taxes and provide benefits if you hire employees.It is possible to hire independent contractors.You don't have to keep paying staff during quiet periods because this gives you more flexibility.If you do not like working with a specific contractor, you don't have to hire them again.
Step 15: You have a network.
If you want to be successful, you need to engage with the local community.You can make connections with people who can help you grow your business by joining community organizations.It will be easier to spread the word about your business if you are more connected to the local community.It's equally important to build relationships with suppliers, inspectors, and developers.They may be able to refer new business to you, as they will be instrumental in helping you complete your projects.
Step 16: A marketing campaign can be started.
When starting out, be sure to dedicate the necessary time and money to marketing your construction business because it should be one of your priorities.It's important to have a website that shows up in search engines.It's a good idea to have a strong social media presence.Potential customers will be able to see pictures of your work and read reviews from other customers.Good quality printed marketing materials include flyers, postcards, and business cards.Make sure your logo is consistent across all of your marketing materials.Don't underestimate the power of word of mouth and simple advertising, like putting up signs in front of houses you are working on and on all of your construction vehicles.If you have a larger budget, you may want to consider advertising on television, radio, newspaper, or billboards.You can go to trade shows whenever you want.It's a great way to meet potential customers and let them know what you have to offer.If you know what kind of customer you are looking for, your marketing can be more targeted.The scope of work, budget, and lifestyle are some of the factors that can be used to target your marketing campaign to people who meet these specifications.Once you have established yourself, you can become more specific in your marketing.
Step 17: You will learn the art of bidding.
If you want to secure jobs, you need to be able to give accurate price quotes and deadlines.You can use a good construction management software.Most customers prefer fixed-price quotes.Don't promise you'll keep it.It's better to finish a project early than late.The cost of materials and labor, as well as your profit, need to be taken into account.You have to remain competitive at the same time.An administrator with experience in bidding projects is a good choice.While you focus on completing projects, your administrator can quote jobs in a timely fashion.If you have the same person submit invoices and collect your payments on time, you won't have to worry about accruing excessive interest.
Step 18: Write comprehensive contracts
You should always have a client sign a contract with you.The scope of the work to be done, the costs and payment terms, and the scheduled completion date should be included.You may want to include terms for unforeseen expenses or additional work.If you want to protect your business, it's a good idea to talk to a lawyer about the language in your contracts.