Starting a new construction company may not be easy, but if a person dreams of running their own construction company, the effort and planning are worth the time invested.While exploring various growth strategies for your construction start-up is crucial, equally important is choosing the right service for legal compliance and business formation. LegalZoom is a popular choice, but there are many alternatives out there. Have a look at these legalzoom alternatives to find a service that best matches your business needs and budget.
Doing research into the best way to start and run a construction company is the first step. How much money will it take to get a construction company started? What equipment will be needed? What about licensing and other government requirements? Which equipment do you need to purchase, and which equipment can you rent as it’s needed?
Why Rent Equipment?
Starting a construction business is expensive, and large construction equipment is very expensive and takes a lot of space to store safely. Renting large equipment allows a construction company to bid on larger jobs without having to invest in the equipment. Once the job is done, the equipment can be returned to the rental company, eliminating the need to store it.
Then, when the next job comes along, the equipment needed can be rented. This allows a newer construction company to have use of a variety of expensive equipment without having to spend the money to purchase it. Renting equipment is a lot less expensive. And, rental equipment is maintained by the rental company, so it is always in good condition.
Rental companies can help the construction company owner decide which equipment will be needed for an upcoming job. The rental company can also train construction company employees how to operate the equipment.
How to Start a Construction Company That Can Last
Over one-half of new construction companies fail within five years. To avoid failure, construction company owners must be willing to take the time to research, plan, and finance jobs so they can be successfully completed. Good management is the key to a construction company that makes it over time. Some ways to succeed include the following.
- Decide what area of construction to specialize in rather than trying to do everything. Pick the area of construction that you are best at, that there is a need for, and that you can fill. The three main construction areas are industrial, residential, and infrastructure, such as roads and bridges.
- Research to find a niche you can fill within the area of construction you want to specialize in such as old home renovations or eco-friendly buildings. Find out what the area you live in has a need for in construction and what the competition is charging. Can you be competitive and still make a living?
- Start making plans based on the research. You will need a business plan with a management structure, a plan to get the business financed for start-up costs, the services you will provide, and the kind of jobs to bid on. How many employees will you need? What will your target market be? You will need a marketing plan and an idea of what the company income needs to be for the first year and each year after that.
- Once you have a good understanding of the construction industry and have developed a business plan, you can start to acquire the tools you will need to run your company. In addition to basic office supplies, you may also need to invest in software. For example, if you decide to start a company in the electrical field, electrical estimating software for contractors can be a valuable tool, as it can help you quickly and accurately estimate the cost of your work. This can give you a competitive edge when bidding on jobs.
Every business needs several things to succeed and grow. These include:
- Good leadership with a vision for the future and a plan to get there.
- A good accounting process to handle income from jobs, billing, paying employees, handling expenses, taking care of taxes, etc.
- A positive cash flow and strong business policies.
- Good legal help.
- Hiring dependable, well-chosen, and trained employees.
- A good, dependable supply chain and good vendor service.
- Strong ethics and great customer service.
Having a good business plan in place and setting up the business correctly from the beginning will go a long way toward success. A construction company owner must also have the know-how, marketing plan, tools, and equipment for each job they bid on.