A career in construction or forming your own construction company is not a small undertaking but can be incredibly profitable. There is a range of vital things that you should do in order to have the amount of information you need to help your business take off.
In any regular startup business, you are combatting the 8 out of 10 business failure rate figures, but the construction industry has its specific obstacles that you need to overcome.
Here are some of the start considerations:
Experience and mentoring
One of the biggest things that you can do for your knowledge and confidence within any sector is to seek out those who are more experienced than you are. If you have been working on building sites, or trained as a tradesman, then you need the management and organization skills.
‘Confirming the importance of mentors, 70 percent of small business owners that receive mentoring survive for five years or more, double the rate of those who do not receive mentoring’. – UPS store
There are a lot of volunteers that mentor would-be business leaders and support them as they look into how to grow their business. Not only that, but they can help increase your network and show you the difference between quality heavy lift crane services and cowboy builders and contractors that will put your projects in jeopardy.
If you need more experience, then it makes sense to seek it in already established companies.
The more you understand about everything from the purchase orders to the finals, the better.
Who are you selling your services to? Why will they hire you? Do you have enough contractors in your network to ensure you can complete the project?
Every business needs to undertake market research; it is the backbone of building a strong business. Here are some areas of both primary and secondary research that you need to undertake.
Construction Business Niche
There are a number of niches that you will need to choose from: domestic builds, residential properties, private sector construction like hospitals and buildings. Or perhaps you will specialize in a specific area of a niche.
Every company, no matter the market, will have competition. And it is essential that you understand what your competition is, how it can impact you, and how to sell what you do. When conducting your research on your competitors, you should:
- Research the success of the niche that you intend to launch in
- Check the number of competitors, both direct and indirect.
- Is there a market locally for your construction business
A gap in the market
When doing your research, you will be able to identify if there are gaps in the market. Your construction business could provide a complete solution to the gap in the market. If there is a high demand for housing in the area, but there aren’t enough companies to cover then it makes sense to provide that service.
Or, there might be a specific style that people are looking for in their new builds, and you have the specialist skill that they need.
Equipment and materials
Here is where much of your startup budget is going to go. There are some industries that have to have specific types of machinery. And that machinery will need to be stored in safe places. From your previous experience in the industry, combined with the knowledge of your mentors and market research – you should have a clear understanding of what you need.
You often don’t need to buy new machinery and equipment. There are online auctions and deals that can be done with industry providers.
You will also be required to source safety equipment for your workers, as well as consider if you will offer transportation in the form of a large works van.
Can you make a profit?
Of course, one of the key issues when launching a business is, will it make a profit, and if so, when? During your market research, you will have gleans a firm understanding of the process involved in launching a construction company and how much profit you are likely to make.
Steps to take for launching your construction company
A business plan isn’t just something for investors; it’s for you too. It will keep you on track and give you an idea if you are meeting your business and financial goals. You should include anything that relates to the success of your business.
Every business needs a place that it can call ‘home.’ In most cases, for a startup, it will be in the home of the owner. Try to make sure that you have adequate office and storage spaces, as well as all of the tools you’ll need.
You will need to register your business in the entity that makes the most sense for you. Registration for taxes, as well as understand the planning application process for the work you will be undertaking, is essential.
Certifications, permits, registrations, insurances, and licenses will be part and parcel of your everyday business. It is a good idea to hire legal help with this.
You are going to need a fair bit of startup cash. You’ll need to decide if that should come from angel investors, bank loans, or if you will use your own finances to get your business started. You’ll need these funds secured before you get your first contract, so apply for any financing as early as possible.
You need to know suppliers, other contractors, and even the people at the permit office. All of these people can help your business run smoother, as well as being contracted when you have large projects.
Employees or contractors
You will need to decide between contractors or employees. One of them requires more insurances and form-filling than the other. At the very minimum, you will need an assistant.
Marketing and advertisements
You might not need lots of signage, but you will need some marketing to pull in business.
And that’s the start of you successfully starting a construction company.