HomeKnowledge3 Tips for Establishing a Solid Foundation for New Construction Businesses

3 Tips for Establishing a Solid Foundation for New Construction Businesses

The coronavirus pandemic isn’t quite over yet, but the world is beginning to reopen, and with that comes a veritable deluge of brand-new opportunities. Workers across industries are quitting and starting something new, embarking on ventures they’ve been dreaming about for decades, and if you’re reading this article, chances are you might be one of them.

With the post-pandemic world just out of sight, businesses that halted production abruptly during the pandemic are starting to kick back up. The construction industry in particular was hit hard during the pandemic and is just beginning to get back steam, with new projects springing up all over the United States as things start to get back to normal slowly. For the aspiring entrepreneur looking to take their destiny by the horns and live out their version of the American dream, now would be an excellent time to go into business for themselves and start their own construction company. However, it can be challenging to know where to start, especially if this is your first foray into the world of construction.

Looking to establish a strong foundation? Here are a few of the fundamentals for launching your own construction business.

1. Register Your Business and Get Some Insurance

When you decide you’re officially ready to establish your own business, the first step you should take is to go to your secretary of state’s website and find the relevant application for registration. After filling out the necessary application and paying the required fees, it becomes a waiting game as the state evaluates whether you can begin operating.

Your very next step, once you get approved, should be to seek out a solid liability insurance plan. Do some research on what is required in your state, then add contingencies in your policy that you feel may benefit you once your business gets running. You will likely need to purchase a surety bond per state regulations, which will protect your customers should you royally mess up while on the job; be prepared to pay upfront for that as well, and do research on the minimum surety bond your state requires.

2. Obtain Construction Equipment

No job can be completed without the proper equipment, and equipment of any sort tends to run a pretty penny: excavation equipment alone can run from $10,000 to $100,000, even more in some cases. Depending on the jobs you aim to take on, the equipment you need will likely vary, but a few standard items you’ll probably need for any job include excavating machines, dump trucks, and a ‘dozer or two. You’ll also want to shop with brands that tend to produce reliable equipment, like Caterpillar: their equipment tends to be top of the market and built to last for a while, meaning every machine you get from them will likely be a solid investment.

 

Purchasing new equipment outright can be a boatload of money, and if you’re just starting, you probably don’t even have the capital to invest in something like that, especially with top brands like Caterpillar, which tend to run even more than lesser-known brand machinery. The good news is, there are vendors who have used Caterpillar equipment for sale as well as equipment from other reliable brands. Consider seeking these vendors out before you blow your start-up cash on brand new equipment.

3. Set Up Reliable Streams of Funding

You’re going to need a LOT of money to run a construction business, and it’s essential to know where your options lie. If you don’t have enough in your savings to support the company for an extended period as it’s finding its way, you might try applying for loans or consulting with your local Small Business Association. If all else fails, the Small Business Association may prove an invaluable resource, securing you loans you can’t quite get anywhere else.

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Building a Business From the Ground Up

Starting a construction business requires a lot of capital, a lot of grit, and a clear strategy that will get you working on the properties you want to work on. Likely, this article doesn’t even scratch the surface of what you’ll have to do to get started.  But by following these simple tips, you’ll at least have laid the groundwork for your business to build off of, and you’ll likely find that as you roll with the punches, you already have the foundation to keep going through the hard times.

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