How To Start a Construction Company in 5 Easy Steps
Over 50% of millennials hate their jobs.
If you’re unhappy with your work situation, take your future into your own hands. How can you take control of your destiny? By starting a company.
One of the best industries to get involved in right now is the construction industry. However, if you don’t know what you’re doing, your construction business won’t be able to stand up against the competition.
To help you out, we’ve created this article about how to start a construction company. Are you ready to love what you do for a living?
Read on to learn how to launch a construction business in five simple steps.
1. Perform Local Market Research
Before you can learn how to start a construction company, you’ll need to research your local market. If your town’s construction market is already over-saturated and customers are happy with their current providers, you might have trouble getting your foot in the door.
Starting a successful business from scratch takes a lot of time and capital. If you don’t have a prime market that’s eager for your help, taking off can be nearly impossible. That’s why starting with market research is always the wisest choice.
2. Study Success
Studying the construction companies that are already thriving will help you in a couple of ways. For one, you’ll be able to avoid offering repeat services where there isn’t a customer base.
However, you’ll also be able to copycat the competition. Find out exactly how many construction companies are operating in your town. What are they specializing in, and how much they charge.
Go one step further to find out what customers are saying about these companies. Read several online reviews and take your Time exploring the competition’s websites.
Notice what construction companies in your area are doing to succeed, and find ways that you can do it better. For instance, what type of construction quoting software does the competition have?
Could you find a better version with more accurate numbers? Customers love firm quotes.
Every little bit of market research you perform will give you an edge. You’ll be able to develop a stronger business plan for when you’re ready to get out onto the playing field.
3. Draw Up a Business Plan
Let’s say you perform your market research, and you’re ready to get started. What’s next? Drafting a thorough business plan.
You need a solid business plan before you can ever hope to start creating a business budget. Your plan is going to help commit your company’s vision to paper.
A plan proves that you know the fundamental ideas behind your company. The ideas that make your company worth investing in. Your business plan will also be a direct path to how you’re going to earn real revenue.
You can dictate exactly when you’re starting the business and how you’re going to do it. Your plan will, of course, need adjustments along the way. For instance, your plan might need adjustments as you start looking into the different business loans that you need to take out.
If you find the idea of drafting a plan intimidating, look for an online template. There are a lot of free online business plan templates that will take the guesswork out of the planning.
4. Choose Your Business Entity
After you have a business plan, you’ll probably be eager to register your business. However, before you can register, you’ll need to decide on a business entity. The entity is the way you register and operate your company’s finances.
There are a few different ways you can register your construction company. For instance, you could decide to go with a traditional, straightforward approach by getting a limited liability corporation or LLC.
LLCs are great when you want to make taxes easy. LLCs are also good when you’re looking to protect your personal assets in case your business faces a legal issue.
There are several different types of LLCs. Some of the LLCs are for single-owner companies setups, while others include partner plans.
You could use your LLC to pay your business taxes directly from your personal filing. If you’re not sure what type of entity to register your company as, reach out to a financial advisor. Ask them to go over the different options with you, and be ready to take notes on their recommendations.
5. Start a Construction Company Insurance Plan
Once you choose a business entity and register your construction company, you’ll have to apply for a few different licenses. However, you won’t qualify for some of the licenses if you don’t already have business insurance in place.
Construction is one of the riskiest jobs when it comes to accident-prone workplaces. Heavy equipment and machinery, plus electricity, can spell disaster. A lot of construction companies are going to need at least one business insurance, but you’ll probably need more.
One of the main types of insurance policies that you’re going to need to carry is called a general liability policy. General liability insurance for construction contractors is a legal must no matter where you live.
The liability insurance will help protect you and your company against on-site injuries, workplace accidents, and other types of construction mishaps. You’ll need to take things one step further by looking into property and vehicle insurance as well.
You’ll have to have all of your company’s equipment and machinery adequately covered. You will be covering your equipment in case of an accident, but you’ll also be protecting yourself against threats like theft.
Understanding How to Start a Construction Company
What are you waiting for? Now that you know how to start a construction company, it’s time to start performing market research.
Find out how many construction companies are in your area, and discover precisely what services they offer. Then you can begin to draw up your business plan.
Before you know it, you’ll be starting an insurance policy, getting the licenses you need, and making money with your fully registered company. We love helping people make money, which is one of the reasons we set up this blog.
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