How To Start A Construction Business

How To Start A Construction Business - Background Info:

When starting a construction business, weigh 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.
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.

How To Start A Construction Business - Tasks And Skills Needed:

Business Specific Tasks:

If you are planning to do all the business tasks or hiring or subcontracting tasks, here's a list of tasks that need to be attended to when it comes to the business side of running a construction business:

Bookkeeping

Accounting

Customer service

General office

Industry Specific Tasks:

Same as above if you plan to do everything yourself or get help, here are some of the tasks necessary to operate a construction business:

Equipment repairs

Inventory management

Complete construction projects

How To Start A Construction Business - Approximate Daily Hours Needed:

General Hours of Operation: - When your business is open - Generally regular business hours and possibly some weekends.

Hours Needed to Prepare - Before Opening and After Hours Activities - Time off the job is used to return calls, emails, inquiries, cleaning and repairing equipment, loading and unloading tools and supplies, mapping and scheduling construction sites.

Number of Employees Needed To Run This Business:

Minimum Number of Employees -During the Start Up Phase: You can start this business yourself on a full-time basis.

Number of Employees - Once Your Business is Up and Running Successfully:

Website maintenance

Record/Bookkeeping

General office

Customer Service

Construction crew

Skill Requirements for This Business:

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.

Licenses:

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.

Approximate Minimum Start up Cost:

Bare essential: - When you first starting out, large pieces of equipment, such as excavators, dump trucks, bucket loaders, 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.

Minimal exposure - 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.

Necessary Equipment to Run this Business:

Necessary Start-Up Equipment & Supplies:

Computer

Printer

Cell phone

Website

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

Supplementary Equipment: - Equipment or helpful products that you can acquire to once your business is off and running:

Trucks

Vans

Cement mixer

Additional tools

Monthly Expenses To Consider:

Man Working

Wages
Phone/cell phone
Internet access
Permits
Advertising/Marketing
Electricity
Water

Special Requirements and Considerations For This Business:

Find out all you can about the trends in the industry. Know your competition, in particular, their strengths and weaknesses. This will help you identify your competitive advantage. In other words, this will help you figure out what you can give your customers that they're not getting from the other businesses. And keep from emulating the competition's strategy. Instead, make the most of your own advantage points.

Pros And Cons of Opening A Construction Business:

The Pros of Running a 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

The Cons of Running a Construction Business:

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

Type of Customers You Need to Attract:

Business as well as residential clients.

Construction Business Statistics:

Please refer to the Bureau of Labor Statistics

Revenue:

Please refer to the Bureau of Labor Statistics

Construction Business Resources:

Industry-Specific Websites:

Associated Builders and Contractors (ABC) http://www.abc.org/

Associated General Contractors (AGC) http://www.agc.org/

Courses:

In addition to advice and support from professional associations, you can also receive additional training in several ways. OSHA conducts construction training and some colleges offer construction management courses.

Books:

Amazon Book Listings - Construction Business

Businesses To Related to a Construction Business:

Yard/lawn care
Interior and exterior design
Cabinetry
Deck construction
Pool installation