As long as you have some experience and can avoid major pitfalls, the construction industry is a profitable sector in which to start a business.
Now is an excellent time to venture into the construction industry, especially if your startup can help meet infrastructure and housing needs while avoiding labor shortages and supply chain issues.
Here’s a quick guide to help any beginner interested in starting a construction company.
Get Equipped: The Best Machines for Your Company
While your startup might be unable to purchase every piece of equipment it needs, you should have a few basic pieces of machinery to begin, and you can rent the rest as you need them.
Depending on what niche your construction company enters, you will have different equipment needs, but almost every construction company needs a forklift.
A forklift makes loading and unloading heavy materials safer and more efficient. In addition, with labor savings, you can quickly pay for your forklift.
Increase the efficiency and usability of your forklift with attachments like pallet forks. Pallet forks designed for your application will make your jobs more manageable, and you can get custom-fit extensions to increase the safety of your equipment.
When you purchase forklift extensions, don’t sacrifice quality because of price. You don’t have to spend much more to buy durable attachments made with quality steel, which will save you money in the long term. Then, you don’t have to worry about frustrating equipment failures.
Make a Plan: Business Planning Basics
Any construction company starting up requires a business plan. Your business plan needs to address everything from registering and certifying your business to funding and marketing it.
Finding a business mentor or team of mentors that can help you every step of the way is critical. Have a team help you develop your business plan, and include a lawyer and an accountant. You are far less likely to succeed when you plan your business alone.
Here are the significant steps of a business plan:
- Research your market to understand the feasibility and direction of your startup,
- Find a market advantage by using competitive analysis,
- Define the organization and legal structure of your company,
- Describe your services and products,
- Strategize marketing, bidding, and sales,
- Make financial projections,
- Calculate your startup costs, and
- Secure funding.
Protect Your Business: Insurance Policies for Your Startup
Finding the right insurance policies for your construction company should be included in your business plan, and protecting your business by analyzing and mitigating your risk is essential.
Implementing a safety program includes making sure your employees wear protective equipment like hard hats, identifying hazards, and using signs to warn people about dangers. Another important aspect of a safety program is using engineering controls, such as fences or other barriers, to separate workers from hazardous conditions.
The construction industry is high-risk, and protecting your business means more than just purchasing insurance. You must address all risk management aspects, including implementing a safety program and job site security.
Addressing workplace safety is incredibly important, but equipment loss due to theft and vandalism can also strain your operations. For example, construction companies lose millions of dollars annually to the theft of building supply materials. With the rising cost of lumber and other materials, theft of building supplies has increased and created an even more significant need for security.
Track Your Progress: Find a Software Solution
There are a lot of moving parts when it comes to construction management. First, you need to find a software package to help you keep track of your progress, communicate with clients, and stay organized.
With some types of project management software, it can be easier to stay on schedule when collaborating with dozens of different people, from subcontractors to third-party inspectors. Even if you think you can manage to keep track of everything, you should know that you will be much more efficient if you use a software package.
Fund Your Startup: Applying for Loans and Grants
Every startup in the construction industry needs money, and there are multiple ways to go about getting what you need.
First, several types of loans are available to small businesses, such as small business loans, peer-to-peer loans, working capital loans, and equipment financing. Then, there are also grants available for different types of construction projects and renewable resources.
Ask your accountant to help you research and apply for state and federal grants because this can be an excellent way to get your foot in the door of the construction industry.
Stay Focused and Positive
Stay focused throughout the process of starting your construction company. Any business startup requires incredible work, but the rewards can be significant and life-changing. Remain positive by understanding that many people before you have started companies from scratch, which means you can do it, too.
