If you’re looking to start a construction company, there are several reasons why you should consider starting now. Construction is one of the oldest industries in America and throughout the world. People have been building homes and infrastructure since before biblical times. The industry will always be there; it’s not going anywhere.
Building a construction company takes patience, leadership, and a solid plan. If you want to learn how to start a construction company with no money, there are some things you need to know.
Learn Construction Industry
Before joining the construction industry, you must be knowledgeable about the field. Apart from knowing what to expect, it prepares you for whatever you’re likely to face. Here are some ways to learn about the industry.
Read About the Industry
You can read books, blogs, journals, and peer-to-peer forums about basic and specialized construction concepts. Apart from introducing you to concepts, you learn about processes you’re likely to encounter.
You can also realize the construction niche you may want to specialize in or other general ideas about your career path through reading. Reading what industry experts say gives you insider tips in the industry before you join.
Videos are for everyone regardless of experience level. They are quick and very effective in offering knowledge about the construction industry. You can easily access videos freely which are well formatted and captured in high definition, giving you insights about the industry. The best thing about videos is being more engaging than reading texts. You can find videos about construction on YouTube or TikTok channels of construction experts.
Attend Conferences and Seminars
One of the best ways to gain industry knowledge is to attend conferences and seminars organized by professionals and enthusiasts. You can learn the industry’s history, perspectives, and latest trends from those passionate about construction. Attending seminars, conferences, workshops, and lectures allows meeting like-minded people to broaden your professional network.
By becoming certified, you can gain advanced knowledge in various aspects of the construction industry. The certification proves your knowledge in that field to make you stand out from the competition. Specialization in a particular construction area makes winning jobs easy and boosts earning potential. The good thing is that you can keep getting certification in various construction fields to broaden your skill set and customer base.
After gaining industry knowledge, you can begin the process of construction company how to start.
Write Business Plan For Your Construction Company
A business plan for your construction company is critical to its success. A well-written and thorough business plan will help you define your goals, better understand the challenges that might impact your construction business, and provide a road map for getting you there. This will help you to raise capital from lenders or investors by showing precisely what your business needs, how you plan to use it, and how you will manage risk.
Writing a business plan will help you to clarify your objectives and develop an ideal strategy. The most important part of the business plan has an effective mission statement. A good mission statement can clearly describe what your company does and why it exists.
A simple outline of a construction company business plan
- Executive summary – explains your business and why it will succeed.
- Company overview – includes a brief description of your business, vision, mission statement, and core values.
- Industry analysis – offers an overview of the construction industry, including market size, major players, industry outlook, and competitive landscape.
- Customer analysis – identifies and describes the target market.
- Competitive analysis – analyzes competitors and explains how to beat them.
- Marketing plan – overview of marketing goals, strategies, and tactics.
- Operations plan – describes how to offer services and resources to do so.
- Management plan – introduces members of the management team with experience and qualifications.
- Financial plan – includes financial statements, income statements, balance sheets, and cash flow statements.
- Appendix – includes additional support materials such as market research reports, licenses, resumes, and permits.
Identifying your target market is essential because it will make it easier for your company to establish itself in that marketplace. It also helps to determine how much capital to invest in the company. Once you have completed these steps, you can move on to the next step, which involves writing up projections for at least three years.
The first step when learning how to start a construction business is defining your goals and identifying the requirements for achieving them. Whether you’re learning how to start a home-building company or have already been in business for a while, you probably want to know what it takes to succeed. While your goals may be different from those of other companies operating in the same industry, the concept of having a business plan will always remain the same.
Register Your Construction Business
Registration is the first step to ensuring that you meet local and state requirements regarding how to start your own construction business. In addition, it will build trust with potential clients, who will be able to verify that you are legitimate through the proper channels. Registering your construction business with the appropriate agencies and authorities, like the local building department, zoning board, and city council is wise.
It might not seem important initially because you may be busy getting started. However, registering your business name as a Doing Business As (DBA) or “trade name” means that when you apply for financing or make a purchase or sale that requires a business license or sales tax permit, no one will have any trouble knowing who to go after if things go wrong.
It also gives you a small degree of protection from other businesses trying to use the same name as yours.
Get The Necessary Permits And Licenses
The licenses for construction companies vary by state, although most require a building permit. Having an appropriate license and permit shows prospective customers that you’re qualified for the job and you comply with local building regulations.
Possession of mandatory permits and licenses protects you from fines and penalties that may impact your bottom line. Building permits from local authorities are mandatory to begin new projects, or a license may be necessary.
You need a general license when learning how to start a general contractor business. Additional licenses may be necessary when handling specialized projects and depend on local or state requirements. Industry associations sometimes issue licenses, but most licensing bodies require paying a fee and passing an exam.
Even when your state doesn’t require a license, getting one or certification gives you an edge in the market. More prominent companies prefer working with licensed contractors. You may also need the license when suing the client for failing to pay you.
How To Obtain A Construction Permit
Although the requirements vary by state, here is a general guide to obtaining a permit to undertake construction projects.
- Submitting an application
- Creation and submission of project plan and blueprint
- Scheduling an appointment with the authorities for plan approval
- Scheduling site inspection during construction
- Obtaining final approval
Open A Business Bank Account
Opening a business bank account is the first step to being prepared for financial success. A business bank account allows you to save money while making it easy to pay bills, track expenses, and plan for the future.
Not only will the correct type of account help your construction business become more financially successful, but it can also make saving more accessible by encouraging good financial habits, like budgeting and saving money.
Setting up a business bank account is the next step after determining how much it cost to start a construction company. And it can be the first step to helping grow your business and make it a success. It gives you a place to keep your money safe, so you can make payments or transfer funds whenever you need to without worrying about making mistakes or losing a payment.
When learning how to start a small construction business, many people overlook that they need an account at the bank. However, this is not something that you can wait until the last minute to take care of. This account should be opened before opening day for everything to go smoothly.
It’s essential to have a business account at a bank or credit union. If a business is not operating without one, it may risk additional fees and its ability to receive money. The best way to start operating your construction business is to open a checking account. It will allow you to write and deposit checks, making accounting easier.
Obtain Business Insurance
An adequate insurance policy is one of the essential elements in running a successful construction business. While few business owners know the complicated process of getting appropriate coverage, it is essential to protect yourself from liability issues that could arise if someone is injured on your property.
Business insurance is essential when learning how to open a construction company. It offers protection from unexpected costs and liabilities associated with the business. It also protects you if there’s damage to third-party property or even if employees are hurt on the job and seek compensation.
Insurance coverage is key to keeping your business in good standing, preparing you for future challenges like lawsuits, theft, and property damage. Insurance companies offer a variety of construction insurance policies for companies in the construction industry, including:
General Liability Insurance
The construction industry is inherently risky, making obtaining general liability insurance inevitable. Your business is covered if a visitor is injured on your construction site. It also covers damages on the client’s property.
Professional Liability Insurance
It’s also known as errors and omissions to cover costs from lawsuits by clients regarding defective construction. The liability may result from services performed by a contractor or third parties such as engineering, design, or installation subcontractors. This insurance complements general liability insurance, which doesn’t cover professional services.
Builders Risk Insurance
You must also consider getting builders’ risk insurance for things that may go sideways during a construction project. The insurance may cover property and liability for the structure you’re working on.
Fire, wind, theft, or vandalism may result in damages or losses that impact your bottom line. Builders risk insurance covers:
- Comprehensive general liability protection from injuries by an employee on site
- Repair or replacement of broken-down equipment
- Damaged or stolen materials for constructing the structure
Brand Your Construction Company
Do you want to give your business the edge in marketing and sales? Discover how to grow your company through effective branding, marketing, and advertising while increasing your brand’s customer awareness.
The construction business is challenging, but it can be a lot easier for you to gain recognition in your community. Attracting new customers, winning bids, and building a solid reputation for quality service all start with marketing.
Why Brand Your Construction Company
If you are a construction company, you must brand your business to stay in the market. Branding helps in creating and promoting your business identity to potential clients. This can be done in different ways, for instance, by creating a logo design and using it as part of your marketing campaigns and advertisements.
People will remember you after seeing this logo on their television at home or even when they see ads endorsing a service or product. Therefore, it is essential that, as a construction firm owner, you create a lasting impression on clients before they buy from one of your competitors.
Branding your construction company to position it in the marketplace. Your reputation can be ruined in minutes with one bad review on Yelp or Angie’s List. A lack of online presence could lead to missed opportunities and lost revenue, which is why it’s more important than ever to build your brand online and protect your reputation.
Hire Professionals For Your Construction Company
Now it’s time to build a winning team for your construction company. However, filling open positions isn’t accessible if your company isn’t attractive to prospective employees. Some ways to attract people willing to work for you include:
- Have someone in charge of hiring
- Offer an apprenticeship program
- Pay employees who bring new hires
- Give suppliers and subcontractors a referral fee
- Have a simple application process
With everything in place to attract employees, you must know where to look for great professionals to join your team. Looking in the right places increases the chance of getting the best professionals to work with.
Here are places to consider to get the best hires.
Specialized Job Boards
Consider checking construction job boards that connect job seekers with construction companies. These usually get few listings and less traffic than general job boards. However, you have a better chance of receiving relevant applications. Besides saving time, it increases the chances of hiring people passionate about the construction industry.
Inside Your Construction Company
Start a referral program where you pay your employees to invite their friends to join your company. It’s a good strategy that turns your employees into recruiters. New hires invited by your current staff are more likely to stick around since they are working with people they know.
A website is essential to managing a construction company, as you’ll see later in this article. One of its benefits is offering space to let people know you’re hiring. You can have a section to post current vacant positions in your company. It’s so much easier as the applicant gets a chance to understand your company before applying.
Besides your website, your social media profiles are great for letting people know you’re hiring. Having active social media profiles allows having loyal followers, some of which may be interested in working for your company. Posting vacant positions allows attracting people with a genuine interest in your brand.
Local Training Institutions
Partnering with local training institutions is another beautiful way to attract people to work for your construction companies. Have local institutions send you the best students after graduation to work for you. You can also do this by offering intern positions with a chance to retain after the program.
A creative approach increases the chances of finding solid construction workers to join your team.
Read more about attracting and retaining employees.
Make The Website For Your Construction Company
A business that is not online today isn’t destined for success. Construction companies are prone to unforeseen complexities daily. Having a website is an asset that comes with endless benefits, including:
- Promoting your company’s value
- Obtaining new leads
- Developing solid relationships with customers
- Establishing authority in the industry
- Displaying your portfolio
The ideal website for a construction company must be attractive, sales-focused, and user-friendly. Investing in creating a website must give you value for your money. A professional website for a construction website must have features including:
- Mobile-friendly and highly responsive
- High-quality images
- Search engine optimized
- Company information, including brand story and contact details
- Calls to action
- Testimonials and reviews from past clients
- Links to your social media channels
- Your team members and their expertise and qualifications
A website showcases your work to potential clients and avails your contacts to visitors who may wish to hire you. The site also builds your online presence, which boosts local SEO to attract customers to your office.
Marketing Your Construction Business
This is the last stage of growing a construction company. Even when you do great work and have your business set, it’s worthless if you don’t have clients. It may also be challenging to grow your small customer base. Regular marketing using the right strategies is the tick that will see your companies reach greater heights.
Here are some proven strategies to get more customers for your construction business.
Keep Your Jobsites Professional
Strive to keep everything associated with your brand professional. Your jobsites must be OSHA-safe, and debris must be collected on tarps for easy removal. Have your employees clean up after work and give them branded workwear to maintain a professional look. How potential customers perceive your company significantly impacts how much they are willing to pay for your services.
Keep In Touch With Customers
Current customers are valuable assets to your company. They will likely forget your brand if you don’t keep in touch. Customers always desire to be valued, and it’s a cheap way to build loyal customers.
A communication flow with customers makes them feel comfortable with your work. After establishing a solid relationship, continue maintaining it with your clients even after completing the project. If customers have a concern, you can quickly fix it or request reviews from them.
Visit Potential Customers
If you notice potential clients, consider visiting them to inform them about your services and work processes. Before the visit, research them to understand their needs so you can pitch them an appropriate solution.
Carry out some brochures and business cards to give out when you visit potential clients. The visit may allow knowing upcoming projects and how to join the bidding process.
Involve Everyone In the Company
Your employees are your brand ambassadors because they represent your company and its reputation. Have them understand how you want them to portray your company and report any potential leads. Putting up a sign on the jobsite, wearing branded workwear, and maintaining safety at all times portrays the professionalism of your company.
🏁 Final Thoughts
Setting up a construction company and growing it is straightforward if you keep the above ideas in mind. However, you must set your brand apart by embracing construction scheduling software to streamline managing your company. The software eases dispatching job management, estimate, quotes, customer management, and invoicing.