According to the U.S. Bureau of Labor Statistics, the construction industry employs more than 8 million people. Although the success of the industry is closely tied to the housing market --- it was hit hard when the credit crisis of 2007 all but halted new building for years --- small builders, especially those who specialize in niche jobs like energy-efficient design, will always be needed. With careful planning, starting your own company can be a profitable venture. Successful Construction Company owners are above all else good businesspeople, so leave no stone unturned when creating your business plan.Instructions
1.Create a written business plan. Your business plan should detail which services your construction company will offer, how you will market your company and what tools and equipment you need to purchase. A well-written, workable business plan will highlight any gaps in your plans as well as provide you with the information you need to apply for loans or financing
2.Consider setting up your construction company as a limited liability company (LLC) corporation or a limited liability partnership (LLP) in order to protect your personal assets. Each type of company has its pros and cons, so contact your attorney or accountant for advice. Either type of business can be formed at your Secretary of State's office for a fee.
3.Determine your financing needs. You will need to have funds available to purchase tools and materials, lease or buy vehicles and hire laborers. Many small construction company owners get started using their own credit cards or personal savings. Consider applying for a small business loan through the U.S. Small Business Administration (SBA) or your local bank.
4.Obtain any necessary licenses and permits. Make sure you have an up-to-date contractor's license. Check with your city, county and state to determine their requirements for running a construction company. You might need special permits for specific construction jobs depending on the regulations of your region.
5.Get insured. Construction companies typically need bonding insurance, general liability insurance, auto insurance and worker's compensation. Contact a commercial insurance agent for advice on selecting insurance policies for your construction business.
6.Purchase or lease construction equipment and tools. The tools and machinery you need will depend on the services you plan to offer your clients. General contractors should also lease a small office space where they can meet with clients.
7.Make sure you understand cost estimation. You must have a solid understanding of cost estimation before you can effectively bid on projects. Underbidding to win jobs will only make you lose money. Bidding too high, however, will usually cost you the job. Spend some time learning how to determine pricing structures. Hire someone with experience in construction estimation if you don't feel you can bid competitively.
8.Hire experienced construction workers. You will need to get together a crew of carpenters, masons, roofers, electricians, plumbers and other tradesmen who turn out quality work. You will also need a foreman to manage your construction crew. You can oversee your own workforce if you plan to be on-site all the time. Otherwise, hire someone with experience leading work crews and sticking to a schedule.
9.Hire subcontractors. You will need to subcontract any work that your own employees can't do. Only hire subcontractors who are licensed and have a good reputation in your community. Remember that your clients will attribute any bad or good results to your company.
10.Advertise your construction company. Create business cards, flyers and mailers with your construction company's information and current contact numbers. Start a company website and advertise your construction services and general price ranges.
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Things You'll Need
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Tips and Warnings
- Keep a list of the names and telephone numbers of your satisfied clients. Use these individuals for references. Word of mouth is the best advertising for construction companies
- Develop a good professional relationship with local building inspectors. These are the people who will have to approve your work.
- Make sure you hire carpenters with solid work records and a high level of expertise. Hiring workers with bad reputations can quickly doom any hope of success for your construction company.
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