Construction businesses are great opportunities for aspiring entrepreneurs. Construction jobs are expected to grow significantly in the next decade, and the sector is filled with small companies that aren’t yet at full capacity.
The demand for construction services is strong, which makes starting a construction business an appealing option if you’re considering entrepreneurship and have relevant skills and training.
Unfortunately, many construction businesses fail within the first couple of years because new business owners don’t know what they’re getting into or don’t take the necessary precautions.
While it isn’t a saturated market like some other small businesses like cafes or restaurants may be, there are a lot of subtle nuances to starting your own construction company that can catch you unawares if you aren’t prepared.
If you’ve been thinking about launching your own construction company and want to do everything possible to increase your chances of success, here are our top 5 tips for starting a construction company:
Hire an Accounting Service
Accounting is one of the most important aspects of any business, but some construction companies overlook this until it is too late, and they are already in financial trouble or even facing bankruptcy.
It is important to hire an accountant for contractors in the early stages of your business is a great way to mitigate risk and make sure you remain financially healthy. An accountant can assist you with everything from finding the right type of business structure to calculating your break-even point.
Accounting services are also a lot less expensive than hiring an auditing firm to do an annual financial audit. Most accounting firms can provide you with a range of services depending on your needs and the size of your business.
You can opt for a one-time consultation, a monthly or quarterly review, or even a payroll service.
Have a Solid Business Plan and Know Your Audience
Businesses, no matter the industry, are all about supply and demand. Before you even start to consider what type of construction services you’ll be providing, take some time to research how many people are in need of those services.
If there’s a high demand but a low supply of certain services, like foundation repair, you have a great opportunity to enter the market and make a name for yourself. But if there’s already stiff competition for foundation repair jobs, you may want to consider another niche.
Don’t make the mistake of thinking that just because people need your services that you’ll automatically get jobs. All construction companies need to be able to prove their worth to potential clients, and that means knowing your audience inside and out.
Hire the Right Employees
When it comes to hiring employees for your construction business, you have a few different options. You can hire employees directly and have them work on-site with your customers. You can hire employees off-site and have them work remotely. Or you can hire a combination of both.
You should definitely be hiring employees directly if you are in the very beginning stages of starting a company and still need to finish certain jobs. But as time goes on, you’ll want to hire employees who don’t actually do the work themselves. But instead they can manage projects and deal with customers.
If you are hiring employees directly and on-site, you will most likely need to get the necessary government permits to do so. You may also need to provide your employees with safety training.
Establish Strong Partnerships
Some construction project owners prefer to hire an in-house company to do all of their work. While others prefer to outsource some or all of their projects to third-party construction companies.
If you want to build up a steady stream of recurring work, you’ll want to partner with as many project owners as possible. As a construction company owner, you will want to join organizations that promote collaboration and partnerships in your industry.
You can also reach out to other contractors in your area and try to forge alliances with them. You can also consider joining networking groups that allow you to make connections and form partnerships over the internet.
Make Safety a Priority
Construction is a dangerous profession. If you’re planning to hire employees directly, you must make safety a top priority. You can’t just hire anyone; send them to work sites, and hope they come back safe every day.
You have to be diligent about hiring the right people. Make sure they are equipped with all the necessary safety gear. You will also have to provide your employees with the proper safety training. Don’t forget to make sure they are up-to-date on all applicable government regulations for their industry.
And you may even have to hire a safety manager or other type of safety professional to make sure all of your employees are safe at all times. Keep your workers safe and pass government inspections. You’ll also need to keep proper records of safety procedures, safety equipment, and safety violations.
Construction companies are expected to grow significantly throughout the next decade, which makes them great opportunities for aspiring entrepreneurs. Before you launch your own construction company, however, it’s important to have a solid business plan and know your audience.
Before you launch your own construction company, however, it’s important to have a solid business plan and know your audience. From there, you’ll want to hire an accounting service, hire the right employees, establish strong partnerships, and make safety a priority. By following these tips, you can make sure your new construction business is a success.