Many people aspire to own their own construction business one day, but few actually act on it.
Worse yet, some people will start their own company, but because they missed a step along the way, their business falters shortly after it starts up.
If you have aspirations of owning a construction company — and want to ensure it thrives long-term — then follow these 6 essential steps for starting your own business.
Don’t Be the Man/Woman Without a Plan
Without a thorough, developed, and well-thought-out business plan you will have a hard time finding success with your new company.
Without a business plan, you may find outlining the next steps quite difficult. Your business plan will guide you during the early days of your business and make sure that you’re on track for your goals. It will also help you define what your business is.
Here are the following sections you should include in your business plan:
- Executive Summary
- Should be short and to the point — identify the name of your business, products and services offered, and any mission and vision statements
- Company Description
- A high-level view of your business — the legal structure of the business, summary of short and long-term goals, brief history of the company and nature of the business
- Products and Services
- A detailed description of what you’re selling and how it benefits the consumers — include any advantages you have over competitors
- Market Analysis
- A section dedicated to sketching out your target customer segments, including size and demographics, as well as an industry outlook and evaluation of competitors (strengths and weaknesses)
- Strategy and Implementation
- An explanation for how you plan on promoting your business, details about costs, pricing, and logistics of your operations, as well as information on sources of labor and number of employees
- Organization and Management Team
- A description of your organizational chart and information about the owners and the management team
- Financial Plan
- Include projection for sales and expenses and other estimations for the first five years of your business
Keep in mind, you may have to fill in some of the information as the process of starting your business goes forward. For example, you may not know how many employees you have and therefore can’t fill in that part of the strategy and implementation section.
Location, Location, Location
Selecting your home base is extremely exciting for some business owners. For others, it can be a bit stressful.
Just remember, wherever you choose to make your home base for your start-up, you don’t have to stay there forever.
Perhaps you have aspirations of being located in a major city, but you know you won’t be able to afford the rent for a few years. So, start off in a neighboring suburb and work your way up! (Make sure to include your goal of moving to a bigger, better office in your business plan).
Depending on the size of your operation, your initial home base needs to be big enough to encompass all the equipment and vehicles for your operations.
Understand the Laws (So You Don’t Break Them)
You may need to hire a lawyer for this step — depending on your experience and knowledge of industry laws. Even if you are well-versed in construction, it’s wise to hire a lawyer who can double and triple check to make sure you have all your ducks in a row.
There are legal certification, permits, licenses, and registrations that you NEED to have in order to start a construction business.
These requirements will also vary from state to state and city to city. So, you’ll have to do some research to ensure you’re good to go no matter where your business resides.
Choose the Right Accounting Software/Team
From the very first days of your business, you should have a strong grasp on your accounting. It’s a smart decision to hire an accountant to assist you with this step. That way you can focus on other areas of the business without having to worry about managing the money.
At 24hr Bookkeeper, we have the knowledge and expertise to help your construction business find success. When it comes to finding the right accounting software, we are huge proponents of QuickBooks Online and one of our services is actually QuickBooks Training.
We also offer monthly bookkeeping, construction software integration, update financials, and workflow advisory services.
If you’re interested in working with a professional, friendly, and experienced accounting team, then contact us today!
Secure Your Financing
Apply for proper financing early to ensure that you have the proper funds before you bid on your first contract. You’re going to need to decide if you want to purchase, rent, or lease all your equipment, tools, and vehicles to get your business off the ground.
Assemble Your Construction Team & Network of Suppliers
You have to decide whether to keep full-time staff or hire contractors — and there are pros and cons for each.
For example, having your own staff will allow you to build a strong team and build a good rapport and working relationship with them. However, hiring contractors on the spot allows you to not have to pay salaries when business is slow (like in the winter).
You’ll also need to start building relationships with suppliers, associates, and other contractors. It’s important to be involved in the construction community in case you ever need help finishing a job or need a specialist for a specific part of the build.
It’s also wise to get involved in any local construction or business groups and associations. This will help you build relationships and get noticed early on in your business endeavors.