With over 650,000 companies and 7.1 million workers, the construction sector contributes greatly to the global economy.
The industry is still growing so as to meet the increasing demands for both non-residential and residential construction projects.
If you love the design and are familiar with residential and commercial construction glossary, you can start your own company. To help you get started, the following are tips to look at:
1. Research the Local Market
One of the first questions is whether starting a construction business is a viable option within your area. If a construction market is oversaturated and clients there are contented with services local companies offer, it can be difficult to get a foothold in this sector, leave alone creating a successful company.
So you should do market research. Get to know how many companies are operating there, what they do, and the price they charge for their services.
You should have a better understanding of the customer base. Get to know their age, interests, status, and how many they are. Knowing all these will enable you to come up with a great business plan and gain a competitive advantage in the market.
2. Write a Solid Business Plan
Every business startup must have a solid business plan. A good plan is there to guide you through the entire process, raise funds for investment, and be approved for a loan. You should ensure your business plan includes the following:
- Executive summary
- Market analysis
- Company overview
- Projections and financial plan
- Sales and marketing
- Services and products
- Business structure
3. Decide on the Specialty
One of the first steps for starting a construction business is to decide on the specialty. This should be based on your goals and experience.
Typically, subcontractors make around 30% profit margins but deal with smaller contracts. On the other hand, general contractors generate about 15% profit, but they get bigger contracts. That is because they manage around 14 separate projects.
There are cons and pros to these both. So ultimately, you want to look at several factors to know what to specialize in. These may include experience and profitability.
4. Focus on Offering the Best Customer Service
When hiring workers, it will be best to know whether they have contracting skills. But almost as important is making sure they may provide the best customer service.
Your customers will always remember the project which was done for them. Putting together a good team who will give customers respect, understanding, and patients will ensure you get repeat business.
5. Get the Business Licensed and Registered
Confirm with your local and state government for regulations that govern small construction businesses. They may tell you if you need bonding to offer you construction services and how to apply for a license. You should also apply for IRS or EIN. Then reach out to a reliable bonding firm to apply for a bond.
Your goal must focus on streamlining processes from the start, both in the construction and building industries. Use this as a test run to ensure everything goes as it planned, from invoicing to writing the first quote for that first job.