Starting a new business can get a bit overwhelming, but it’s something you’ve always dreamed of. You’ve always had the goal of branching out on your own in the construction industry, and whether you are starting a business as a general contractor or are keeping it small as an independent contractor, there’s much to learn about running a business. If this is your first endeavor as a contractor with your own business, here are some tips to help make the transition to the business owner a little less complicated.
1. Build on What You Know
In the beginning, you will start with what you know. However, just because you have a number of years in your field, doesn’t mean that there won’t be advances along the way. Technology is advancing by the day, and this will have a huge impact on the construction industry. One of the best tips you can be given right from the very beginning is to keep your construction training ongoing. From tax strategies to risk reduction to bidding for and writing contracts, nothing is static in the field of construction, so it pays to keep current in changes along the way.
There are a number of courses to help you stay current in your field, and if you want to stay current with technological advances and any legalities you might encounter, regularly enroll in a construction training course online or nearby.
2. A Solid Business Plan is a Must
Starting a new business can run into quite a lot of money, especially in the construction industry where you are likely to need an assortment of heavy equipment. You will find that without a well-written business plan, financing may be a huge problem. Any lender or investor will want to see how you intend to run your business and where you expect profits to come from. Laying all this out on paper will be the surest way to get the financing and/or investments you need, so take the time to draft a thorough business plan. If you are unsure how to do this, there are professional business advisors who can help you create a plan that works for you.
3. Set Aside a Budget for Construction Software
From project management software to communications programs, the one thing you will need to have is an assortment of front-end software. It also might be a good idea to invest in CAD (Computer-Aided Design) programs because you may need to make alterations in designs as you go. If you keep an engineer on staff, they will need these programs, but even if you need to make slight alterations to a blueprint, CAD programs are an absolute must.
4. Contract a Marketing Team
You may be starting out with clients you’ve worked for with previous employers, but those clients won’t keep you in business for the long haul. It’s imperative that you get your new company’s name out there so that property investors and developers learn about who you are and what you do. Bear in mind that you will be busy running projects you have contracted and so there will be little time to canvas for new projects and clients. A marketing team can target your market so that you can concentrate on the work you’ve already contracted. With the right marketing team, you will soon find that you have all the work you can handle – and then some!
5. Find an Accountant Familiar with the Industry
Another thing you will probably notice about starting a business in the 21st century is the fact that literally every profession has become extremely specialized. Just as you might specialize in commercial construction or new home development, so will accountants often specialize in one or more industries when keeping current with changes to tax laws over time. A good accountant familiar with the construction industry will be able to tailor specific tax breaks and write-offs available to you as a construction contractor.
For example, the heavy machinery you purchase and maintain might present tax breaks not relevant to other businesses such as grocery stores or daycare centers. Every industry has its own set of variables that will affect your bottom line, so a knowledgeable construction accountant is another ‘must’ for contractors in the construction industry.
8. Be Familiar and Compliant with OSHA
If you’ve ever seen a former employer slapped with a safety violation, you know that the fines could be quite hefty. Not only will a monetary fine be imposed on companies not compliant with OSHA guidelines, but if the infraction is severe enough, it could close you down, at least temporarily! Not only should you be well versed in OSHA (Occupational Safety and Health Administration) guidelines within your industry, but you should offer training for your employees as well.
Once again, you can find the training you need on sites like findcourses.com to keep you and your employees current in safety regulations and guidelines. For example, in order to stay compliant with safety guidelines on rappelling, you should take the course and offer training for any of your workers who will be working at heights covered by regulations and guidelines. This, too, is a must for any construction company old or new.
9. Understand the Benefits of Subcontracting
Keeping the payroll manageable might present quite a challenge. Actually, this is where working with subcontractors might be the wisest course of action. It is important to decide what types of jobs in any project you want to contract out as opposed to hiring staff for those duties. An example would be contracting the site work out prior to beginning the actual building phase of a project. Do you really want to go to the expense of purchasing all that heavy equipment and hiring operators to do the job, or is it more lucrative to work with site work subcontractors?
10. Understand the Benefits of Staying within Your Areas of Expertise
This leads to the final tip you should take to heart. Yes, you have probably worked all ends of the industry and feel you are knowledgeable on everything from site preparation to a project’s final inspection upon completion but are you really prepared to take on projects of this magnitude? As a general contractor, you will want to stay within the areas of your particular expertise while contracting various jobs out to specialists in the field. Few general contractors work without subcontracting various jobs out to other contractors, and this is something you’ll need to be familiar with as well.
In the end, it’s imperative to also work with a legal team that can draft any legal documents and contracts you will require as a construction business. This is a ‘bonus tip’ you should take to heart. From liability to taxation, a legal team can help you stay compliant with laws, regulations and best practices in the construction industry. Armed with a desire to start your own company and a better understanding of what it takes to launch a successful startup, the future looks bright. These 10 tips should help you start a construction company with that bright future and the only thing left is to plant your feet firmly on the ground and stay committed to making a success of it. That commitment will guide you forward, so stay committed at all costs. That’s the best advice of all!