10 Essential Tips for Starting a Contracting Business in Construction
Construction has proven to be one of the most lucrative and stable types of businesses throughout the years. You may be interested in how to start a contracting business that you can grow and profit from. But first, you need to know the basics so you can do it right.
There are definitely some essential key factors to consider before starting a contracting business. Check out this list below of 10 tips that will help you with running a successful construction company.
1. Write a Business Plan
Some people may think that writing a business plan has become an outdated step. However, there are still many entrepreneurs and investors who value them.
Developing a plan when starting a contracting business will allow you to outline all the necessary steps you’ll need to take to increase the chances of success. There are many free templates you can use to help you write a small construction company business plan.
2. Research Regulations Specific to Your State
Each state has different regulations in regards to setting up a business. Since the laws and guidelines may shift depending on where you are, it’s important to know which ones can impact your construction business. For instance, you will need to be aware of tax filing requirements and licenses necessary for where you’ll be starting a contracting business.
You may also need to look into the regulations for the process of registering your business as well. It won’t be possible for you to have a business without setting up a legal business entity first.
The more information you know about state-specific requirements beforehand, the easier it will be to avoid roadblocks when beginning.
3. Get Access to Funding Resources
Everyone knows that it takes money to get any business off the ground. Starting a contracting business is no exception. Finding financial resources to help with starting a contracting business will allow things to run more smoothly.
You’ll need to find funding sources if you don’t already have a savings account for your company. Another route to funding your business would be to consider applying for a small business loan through government programs.
4. Understand Regulations for Construction Industry
Every industry has a set of rules that are put in place to keep all businesses within that sector held at certain standards. Aside from brushing up on important rules and regulations that govern each state, it’s also important to be familiar with guidelines that are specific to the construction industry as well.
Consult with the department of labor’s website for regulations for starting a contracting business in construction. These steps and guidelines will ensure that your company is following compliance.
5. Obtain Proper Licenses and Permits
The last thing you want to do is position your company to be outside of legal standards. There may be licenses and permits that you need to have when starting a contracting business to prove legitimacy.
Gaining the appropriate license and permit requirements will help to protect your business. Reference the paperwork for your state to find out which certifications or permits are recognized as necessary for you to operate locally.
6. Get Your Business Insured
Another way to protect your business is to make sure that you are properly insured. You’ll especially want to make sure that you are insured when starting a contracting business due to the nature of this type of work.
Businesses do require a lot of investments so getting insurance can help out financially in the event of an incident. You should at least get liability insurance for general protection.
7. Recruiting and Hiring Laborers
You can’t run a successful construction company if you don’t have anyone to help execute the work. After you’ve set up all the legal and structural foundations of your business you’ll need to begin recruiting individuals that can work for your company.
Depending on the model of your business, you will be able to hire people under various formats. For instance, you may want to enlist subcontractors, independent contractors, etc. You may even want to hire some employees to do administration work, such as handling payroll and system operations.
The best way to go about finding individuals to work for you when starting a contracting business is to begin posting job ads online via job sites and appropriate social media platforms. You should also use word-of-mouth and career day events to your advantage.
8. Develop a Health and Safety Plan
You’ll want to put a safety and health plan in place for the people you hire. There are specific health standards that need to be met that are regulated by government guidelines.
Check out workplace and safety standards based on Osha’s requirements to assist you with creating a health and safety plan.
9. Search for Tools and Resources
There are plenty of resources for construction companies and contractors to help with running your business successfully. Be sure to take advantage of online and offline tools that will contribute to your business knowledge and answer questions for your concerns.
You’ll also need to consider buying actual tools for your company if you’ll be supplying contractors with them. Be sure to stock your business with the necessary equipment.
10. Find a Mentor for Help
Starting a contracting business in construction will definitely be challenging and there may be some questions that are difficult to find answers to. Seeking out a good mentor to help you through the process of beginning and growing your business can be somewhat of a shortcut to obtaining required insight.
Go out and start making connections with others in your industry. Then reach out to individuals that you’d think would be willing to take you under their wing.
Interested in Starting a Contracting Business Soon?
The best way to begin any business is by writing down everything you think is required in order to make your business successful. Then you should get all the legal and insurance properties situated.
After that you can begin hiring people to work and gathering all the necessary resources needed for your business to operate. You should also consider buying any equipment necessary for your business.
Contact us today if you’re in need of materials that will keep your business operating smoothly.