It is not wrong to say that a business is a profitable venture if done correctly. There is a cap on a fixed-income job, but a successful business has no limitations to its profits.
Similarly, the construction business is lucrative and can bring in lots of profits if you manage it efficiently. Suppose you are looking to start your own construction business. Then with prior experience, it will be easy for you to create a construction business from scratch. But if you are new to it, you need to conduct loads of research on standards and safety laws in this field. Hence, preparing a checklist will help you along the way. You can quickly start implementing your business plan action.
The following are seven essential things to consider before starting a construction business:
1. Decide On Hiring Contractors Or Full-time Staff
Will you hire contractors when you get a project or keep a full-time staff? If you wish to go with contractors, then there are benefits, such as not paying salaries when there are no projects on-board. However, if you plan to hire employees, start small by initially hiring only five to six employees.
Also, You will need employees close to the construction site to avoid any delays in completing your project. Moreover, you want them to work at their optimum levels. Employees get disgruntled if they have to travel to the construction site from long distances, which reduces their productivity. You can provide your staff with workforce lodging that is near to your construction site. That will not only improve employee motivation but will make them feel comfortable working at the construction site.
2. Create A Business Plan
Any successful business start with an effective business plan. Your business plan should contain the goals you wish to achieve with your business. Present in it should be details about every step involved in the entire process and the funding and time required to achieve your goals.
Include in it whatever you think will contribute to the success of your business. Also, don’t forget to include details about everything you wish to achieve with your construction business. You can create an excel graph of your expense and income to see the profit and loss. You can use axis labels for major divisions. Learn how to add axis labels in excel. MS Excel provides many custom features that are very helpful.
The business plan must include the following details:
- Manufacturing costs (Raw materials)
- Staffing policies
- Budget for the business
- Financing(long term loan)
- Insurance
3. Get Financing
When you decide to start a business of your own, let alone a construction business, you need to have the financial backing to make that happen. Your life savings will help you out to a point.
You will need money to buy construction equipment such as excavators, backhoe, bulldozers, graders, trenchers, asphalt crack filler machine, loaders, rent an office, pay off your utility bills, and much more. Whether you decide to go to the bank and acquire a loan or contact angel investors, make a list of options you can use to get finances.
4. Organize Your Business Legally
The best way to provide your construction business a more professional look is to organize yourself and fulfill all legal requirements that go into running a construction business. For example, when you start a food business, you have to acquire permits and licenses from the FDA.
Find out which authority can provide you with all the permits, licenses, and certifications required to run a construction business without breaking any rules and laws. Also, hire a lawyer if you find the legal jargon confusing.
5. Tax Requirements
An audit might be something that doesn’t happen every day. However, they can occur when you least expect them to happen. And if you don’t have all your deductions and tax filed accurately, you can face legal action.
Be prepared by keeping all your financial books up to date and as accurate as possible. Hire an expert to do your taxes and manage your accounts efficiently.
6. Get License and Insurance
When operating a construction business, you have to protect yourself and your employees from work-related injuries. Also, don’t forget about getting insurance for your equipment, in case it suffers damage. Set up a meeting with various insurance agents and ask them about the coverages you need to get for your construction business. Your business and your assets must be safe by getting insurance coverage. It will give you financial security from spending money from your pocket.
Most people do not prefer to hire a construction company that is not licensed or insured. Get a license in the first place. If you are a commercial construction company, then get a commercial construction license. That will avoid any delays when starting on your new project.
7. Set A Marketing Budget
After setting up a construction business, you need to market your company to bring in customers and projects. You can use various forms of marketing tools to create a brand for your company. Maybe you want to create a logo for your business or promote it on social media. Set aside some money for marketing. And don’t forget to allocate ten percent more than what you think you will require for your marketing campaign.
Conclusion
Starting a construction business will take some persistence and hard work from your side. However, the most challenging thing about it is staying in business long enough to see profits. If you devise a proper business plan and make a checklist, the whole process will be smoother. Do not hesitate to get consultancy from a professional as it could be useful and will make things easier for you to start your construction company.
