You have a passion for construction, you’re very knowledgeable in your field, and you have a desire to be your own boss. So starting your own construction business is a seemingly simple task, especially if you have years of experience in the construction industry and you’re good at what you do, right? While you certainly possess the knowledge and drive to be successful, becoming the owner of any kind of business can be difficult, and there’s a lot that goes into starting and running a business. When it comes to construction, in particular, there are several things that need to be done before you can open the doors of your construction business.
1: You need to have your contractor’s license
Having your contractor’s license can open up more opportunities for you as a business owner. In fact, in the state of California, you have to have your license to own your own construction company and legally advertise it, though each state in the U.S. has its own licensing requirements, according to Rocketcert.com. However, being a licensed professional general contractor means that you have more prestige, and more people will be willing to choose your company. People tend to go with licensed contractors because they are more likely to follow guidelines set in place by the local and federal government, because failure to do so can result in legal action, including the removal of your contractor’s license.
2: You must construct a solid business plan
When starting up any kind of business, a plan is necessary. This written document will describe in detail how you plan to make it successful, from the startup to future projections. Investors don’t like to put money into something that doesn’t have a proven track record, so your business plan can be the determining factor in whether or not you receive financing for your business, since it’s brand new and has no record. Your plan is something that isn’t discarded once you’ve received the funds to start up your business. You should keep it, review it, update it, and possibly even create a new business plan in case you decide to take your company in another direction.
3: Your business has to have insurance and other legal matters taken care of
Once your business plan has been approved and you’ve received financing, you should look into getting insurance. Insurance for your business will help protect it and yourself from any claims of bodily injury, property damage, and any other liability claims made against your business. There are several things to consider when looking for insurance. You don’t want to be too hasty in your decision and just go with the first type you see. You’ll want to take your time in choosing the right type of insurance for your new business.
Generally, you’ll want to look for something that covers:
- Business income
- Commercial property
- Data breach
- General liability
- Workers’ compensation
In addition to having insurance for your business, you’ll also need to establish a legal business entity. The most common type is an LLC (limited liability company), but your business can also be established as a partnership, sole proprietorship, or a corporation. You will also need to register for state and federal taxes, and you’ll have different options for how you’ll be taxed, based on the type of business structure you choose.
4: You’ll want to buy the best tools and equipment upfront
Finally, you’ll want to make sure that your business will use the best tools and equipment to work on construction projects. It may be tempting to start off cheap and say that you’ll invest in better tools once your business takes off, but not having the best tools may not always yield the best results, and not all clients may be happy with your work. If this is the case, then your business will not take off as you expect, so it’s a good idea to invest in the best tools that will show in the craftsmanship of your work. How you’ll obtain the funds for the best tools and equipment should be taken care of in your plan so you won’t have to worry about this when you’re close to opening your business.
5: Don’t forget to open a business bank account
This goes without saying, but some first-time small business owners are tempted to keep both their personal and business finances in the same account. Doing so can potentially cause legal issues, so it’s best to just have a separate account for your business. This will also be beneficial to you when you set up business accounting. This will help you to clearly see how well it is performing financially and will save you a lot of headache during tax time.
6: Go ahead and create social media accounts and set up a business website
It may seem too early to do this, but this will save you the trouble later when you start marketing your business. Social media is fairly easy to use; and yes, everyone is using it. This will be a great start to marketing your new business. Also, they are viewed as being more professional when they have a website. Here you can list all of your services, start building a portfolio with pictures of all of your work, list your contact information (phone number and email address), and your hours of operation if you have a physical location for clients.
A new business is a big investment, not only for investors but also for yourself and it’s an investment in yourself. You’ll want to put your best foot forward when it comes to owning your own construction business because it will be a reflection of you. Being a business owner is a process, and there will be some setbacks. The key is to be patient and to keep trying. Soon enough, you’ll see success, and your business will grow.