When starting a construction business, weight the costs and the benefits.
Construction is a thriving business in a lot of areas. Owning your own construction business takes a lot of work and determination, but it can be a great way to earn income, challenge yourself, and further your career. There are many different aspects of the construction industry; let’s take a look at what you need to know to start your own construction business.
Owning any business requires a lot of skill. To own a construction business, you should be able to do the following:
- Do physical work for long periods of time. You need to be physically strong.
- Offer services like remodeling, painting, building additions, etc. to make yourself more marketable.
- Understand architectural design and building concepts
- Read a tape measure. This may sound silly but a lot of people cannot accurately measure, take into consideration lumber measurements, and combine fractions. This requires great spatial skills and the ability to see things laid out in your mind.
There are a lot of benefits of owning your own construction business:
- In general, a good market for your services
- Potential for high pay
- Work that combines physical ability with mental ability
- There are many areas in which you can specialize within the construction industry
When considering opening any type of business or starting any new job, you have to look at the downsides.
- High start-up costs/very expensive equipment
- Construction market ebbs and flows
- Competition for jobs
- Potential for dangerous work conditions
- May not be able to bid competitively if you don’t own equipment
Equipment is also a big consideration in opening a construction business. Depending on which type of construction you are going to specialize in, the costs can be quite high. Here is a list of the absolute basics to get you started:
- Head, eye, and ear protection
- Hand saws
- Planes
- Tape measure (25 feet)
- Pencils
- Builders crayons
- Speed square and framing square
- Framing mallet
- Calculator
- Utility knife
- Notepaper
- Hammer
- Level
- Protractor square
- Tool belt
- Circular saw
- Table saw
- Compound mitre saw
- A large, durable vehicle
When you first starting out, large pieces of equipment, such as excavators, dumptrucks, bucketloaders, and more are very expensive. For instance, a Caterpillar backhoe can cost as much as $97,000 new. Buying used cuts costs by a lot. A used one can costs to about $30,000-$50,000. This is still an enormous cost when you’re starting out. Another option is to rent equipment. This may put you at a disadvantage for bidding because companies that own their own equipment will be able to offer a lower price.
You will need to have a business license to own your own construction business. Check on your state’s official website to see what their requirements are and how you can obtain a license. In addition to a license, you should get insurance. This protects your business if any property gets damaged or accidents occur.
There are several professional associations which you may want to consider joining.
Check these out:
In addition to advice and support from professional associations, you can also receive additional training in several ways. OSHA conducts construction trainings and some colleges offer construction management courses.
The financial investment required to open a construction business is quite high. Even with just the basic equipment listed above, you’re going to have to spend thousands of dollars to start up. You also have to include the cost of insurance, employees if you need them, rental equipment, business cards, and more. If you want to start with your own heavy equipment, this skyrockets to hundreds of thousands of dollars.
Starting a construction business is rewarding. While there is a good market for your services, the start up costs can be a challenge. If you are committed to your goal, start small and rent or buy used equipment. Build as you go. You can’t build a strong, safe building in one day, and you can’t start a strong business in one day either. It is going to take work, determination, and more work to make your construction business successful.
Important Point To Keep In Mind
See Also: How to Start A Business : Business Idea of The Day
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