Starting a business in the construction industry requires the same skills as venturing out in other industry sectors, but the high rate of failure in construction attaches with it the need for you to plan and strategize your every move a lot more carefully.
Running your own construction firm requires a lot of hard work and capital, so the earlier you master these seven steps on how to kickstart your own company, the better.
1. Do careful market research
To build a successful business, you have to address your prospective clients’ pain points. You can find out everything you need by doing careful market research. How many construction firms are operating in your area? What have past clients been saying about them? Is there anything you can do to offer a better service which will give you a competitive edge over these other construction companies? These are the things you have to find out when you do market research.
This is also how you find out how much you can expect to charge for the services you want to offer. This will be your basis when making your business plan.
2. Learn the basics of business management
Aside from finding out everything you can about the construction industry, you have to completely familiarize yourself with the basics of running a business like knowing how to fill out a purchase order form and how to negotiate better prices from your contractors.
If you don’t have extensive background and knowledge in business management, it might do you well to hire a project manager who can oversee the specifics of business operations. Still, you have to acclimate yourself with the entire process since you have to be completely hands-on at least for the first few years of your new business to ensure the success of your endeavor.
3. Build a professional network of contractors and workers
From site inspectors, machine operators, to on-ground workers, you have to establish a network of professionals who can help you accomplish any project, especially big ones. You must also find a trustworthy supplier of construction materials that will be your go-to supplier for your projects. Usually, entering into long-term collaborations with these professionals will give you substantial discounts on your dealings with them.
4. Find a company that leases the equipment and vehicles you need
While doing your business plan, you might have noticed that the costs of construction equipment and service vehicles like pickup trucks and flatbeds can be realy hefty. Fortunately, you can explore more cost-efficient options like leasing or renting out machines, especially when you’re just starting out and don’t have any idea yet which equipment you will end up needing the most for business.
The same is true for service vehicles. Renting out trucks from Flex Fleet will allow you to save a sizable amount of money while also escaping the hassle of having to maintain and store your own fleet. You can simply borrow the cars for the duration of your project then return them once you’re done.
5. Get your legal ducks in a row
Naturally, you have to register your business before offering services to the public. You also have to know what kinds of permits and licenses are required by your state for construction firms, and what laws and regulations you have to comply with in the conduct of your business.
The construction industry is a sensitive one — you’d be dealing with people’s life savings and investments, so the last thing you want is to be implicated in a lawsuit that can besmirch your reputation forever.
6. Get the funding you need
This is probably the most important thing you have to secure to get your business running. You will most likely have to apply for funding from your bank or financial institution of choice. You have to show them your business plan, the scale of your business operation, and other pertinent documents that will convince them that you deserve (and can pay for) your credit line. Note that this process might take a while, so it’s better to line up for funding way ahead of your projected launch date for the business.
7. Start marketing the business
One of the most essential business management fundamentals is knowing how to reach your target market. You have to find the best marketing strategy and campaign that will give your business more visibility. While social media may be the name of the game right now, consider that the construction industry still heavily relies on traditional advertising, not to mention the ever-reliable referral system.
Once you master these seven steps, your new construction firm will be ready to take on the world.