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Whether you’re an experienced contractor ready to branch out on your own or you’re a new contractor who wants to start a construction company, starting a small business like this takes considerable planning. You have to write out your business plan, figure out hiring practices, get the proper insurance, and learn city ordinances. This exciting new stage of your business life is going to take some work.
Find a Niche
Before you even write a construction business plan, does your area need another small business offering construction or contracting services? Figure out who you’ll go after as clients, what kind of work you’ll do, and who your competition is. Ideally, you’ll be offering a service that doesn’t yet exist in your area, even if some businesses offer something similar.
For example, larger businesses might offer deck construction in a longer list of services. Your company could be your town’s only business that exclusively does deck construction, which you can leverage to demonstrate that you have more experience and attention to detail than competitors.
Write a Business Plan
You might be most interested in the actual building aspects, but you can never forget that this is a business. That means you have to deal with paperwork like overhead costs, employee documents, and how much rental equipment will cost. Your business plan will help you with advertising, budgeting, and any loans you need to take out. Your plan will also help you figure out how to reduce your initial overhead, like leasing heavy machinery so you don’t have to spend on big equipment right off the bat.
Use Experienced Contractors
Whether you hire contractors on a freelance basis, find someone to partner with you in your business, or hire them as employees, make sure the people you work with are experienced. This is a new business, and you’ll be dealing with enough that isn’t familiar. This isn’t the time to work with new and inexperienced contractors. Instead, experienced contractors will have expertise you can apply to your business’s reputation, and they might have suggestions for approaching difficult jobs. The best idea is to find a contractor whose area of experience is different from yours.
Get Insurance
Homeowners and commercial owners are hesitant to hire construction businesses without insurance. Your state probably requires you to have workers’ comp insurance, but this might not be the only kind you need. You might want general liability, builder’s risk, or even auto insurance if your workers will be doing a lot of driving.
Find out how to get permits for the kind of work you’ll be doing. Study noise ordinances and how long construction jobs are allowed to operate each day. These rules and regulations will structure how and when you can operate your business, so be thorough in your research.
No matter how much you plan, you’ll encounter roadblocks and hurdles you never expected. Keep those to a minimum by doing the right research and prep work before you open your small construction business.