The current population is constantly expanding hence the need for more commercial and residential buildings. The need for new housing facilities has created an opportunity for entrepreneurs seeking to invest in the construction industry. It’s not only the residential sector providing business. The commercial sector has been witnessing the steady rise of entrepreneurs who are also seeking new office spaces and base of operation.
In the construction business, you can carve out your niche to become a specialized construction company with some of the specializations including, building restoration, renovation and ground-up build. The construction business is generally not a simple investment and is definitely a long term and costly investment. To get this venture off its feet, you need to arm yourself with an adequate knowledge base, capital and machinery.
This article is centred on the key things you need to consider when starting your construction business.
Formulate a Business Plan
Every type of business operates on a well-structured business plan to avoid any mishaps. The business plan should be able to map out the goals of the construction business, giving a detailed explanation of every stage of achieving the goals from the mode of operation to the funding. Your business plan should be solid enough as you may need it when convincing financiers or lenders to obtain funds.
Choosing a base of operation
Most startups are established in home offices, but over time, you may need to find a different location to set up shop. When looking for a suitable location, keep in mind a property or office with space where you can keep your construction equipment. You may also need to find a location with adequate parking for some of the construction vehicles you are bound to use.
Sourcing for permits and licensing
Having found anew base of operation, you need to sort out the legal aspects of your business. Getting on top of all your legal requirements positions the business in a position of authority, enabling you to operate confidently. This also helps you to get established, which means clients will be more trusting about your operations and services. Permits, certifications and licensing for business vary from one region to another. If you are not knowledgeable about the legal framework, you can hire an attorney to help smoothen your path.
Buying or Leasing Construction Equipment
Of course, for a construction company, you need to have the necessary equipment to run the business. This could range from a simple nail gun to heavy machineries like graders and mixers. For a startup, you may not be in a position to buy all the equipment at once. However, you can opt to lease some of the more costly equipment as you rearrange your finances to buy construction equipment. There is some degree of comfort in owning your equipment as you can hire them to others when you’re not using them for extra pay.
Networking in business has been one of the major contributors to business success. It would help if you surrounded yourself with the right people talking about the right topics. In the construction business, you need to communicate with suppliers, business associates and contractors constantly. This will help you secure contracts through connections as well as keep you informed of any changes occurring in the construction industry.
You need money to buy equipment, pay bills and get your business running. You need to seek the source of funds prior to kicking off your business. When talking about finances, you need to look at taxes and insurance policies for your business as well. For your insurance needs, you need to consult with an insurance agent on the various packages that your business can be offered and at what prices. In its construction, you need to review matters such as work injuries, personal liabilities and damage to the client’s property.
For taxes, your need to get your books ready just in case you are audited. You may have to hire an accountant to help you with drafting and filing all the taxes for our business.
This is a very sensitive part as it influences your finances as well as the quality of your services. You also need to decide if you are hiring full-time employees or contracting their services over a specific period. Contractors come with flexibility and are considered the cheaper option; however, having a few permanent employees can be advantageous too. Despite having to provide them with medical cover and other benefits, you are able to access a team that you can train and grow the business with. Having regular employees can also boost a client’s confidence in the legitimacy of your business.
Every business currently depends on effective marketing strategies to be able to make sales. You need to establish your brand to be able to penetrate the market. You need to maximize your advertising if you are looking to get any bids.
Starting a business can be very stressful. You may need to consult extensively before setting up your business. This will help to smoothen your operations.