You can also learn more about your community’s needs for construction services by getting out there and talking to local residents and business owners. Be sure to consider the demographics of your area. You need to provide services that the people in your community will want and will be able to afford.
Your business plan should contain separate sections that explain in detail how you will structure and manage your business, what kind of services you will provide, who your target market will be, how many employees you will hire, how you will market yourself, how much competition you will face, how you will differentiate your business from competitors, how much it will cost to start and maintain your business, and how much money you expect to make. If you have never written a business plan before, you might want to look into hiring a professional to help you write it.
Keep in mind that if you operate your business out of your home, you will need a special license for home-based businesses. Even if you run your business from home, you will need to budget for a few office-related expenses, including a dedicated business phone line, an organized work area (if you don’t already have one), and maybe a PO box if you don’t want to get business mail at home. [4] X Research source
The U. S. Small Business Administration may be able to help you with financing, even if you are not approved for traditional loans. Be sure to check out grants. gov to see if your business qualifies for any government grants. [6] X Research source
Be sure to come up with a name for your business before you start the paperwork. You can check with your state’s filing agency to make sure no other business is using that name. You should also check with the U. S. Patents and Trademarks Office to ensure that the name has not been trademarked by another business. [8] X Trustworthy Source U. S. Small Business Administration U. S. government agency focused on supporting small businesses Go to source There are many business structure options to choose from, and each comes with its own pros and cons, as well as its own legal requirements and fees. Sole proprietorships and partnerships offer tax benefits, but not protection from personal liability. Corporations protect the company’s owners from personal liability, but they are taxed at a higher rate. Limited Liability Corporations (LLCs) offer a combination of tax benefits and liability protection for small businesses. [9] X Trustworthy Source U. S. Small Business Administration U. S. government agency focused on supporting small businesses Go to source
Licensing laws vary from state to state, so check with your state’s business license office to find out what you need for your business. You may also need contractor’s license to operate a construction company. [11] X Expert Source Perryn OlsonConstruction Specialist Expert Interview. 3 August 2021.
There are additional insurance requirements if you have employees. Depending on what state you operate in, you may be required to carry workers’ compensation insurance, unemployment insurance, and/or disability insurance.
In order to be approved for a surety bond, you need to be able to prove to the provider that you are experienced, capable, and financially secure. If you can’t get approved by a third party surety bond provider, the Small Business Administration may be able to provide you with a bond. Surety bonds typically cost between 0. 5% and 2% of the total project cost.
Don’t forget about building permits! You will need to know the proper procedure for applying for permits in your area and your work will need to be up to local building code standards in order to pass the inspections.
You might want to hire an accountant or bookkeeper to manage this aspect of your business if you don’t have the time to do it yourself.
Renting might be economical as well for equipment that you seldom use.
If you have lots of steady work, hiring your own team of full-time and part-time employees might save you money. Hiring employees also means you will have some additional responsibilities, like paying payroll taxes and providing benefits. Another option is to hire independent contractors or subcontractors. This offers you more flexibility because you don’t have to keep paying a staff during a quiet period. Additionally, if you didn’t like working with a specific contractor, you don’t have to hire that person again.
It’s just as important to build relationships with suppliers, subcontractors, building inspectors, and developers. These people will be instrumental in helping you complete your projects, and they may be able to refer new business to you as well. [16] X Research source
It is absolutely essential to have a user-friendly website that shows up in search engines. A strong social media presence is a good idea as well. This will allow potential customers to see pictures of your work and read reviews from other customers. [18] X Research source Invest in good quality printed marketing materials like flyers, postcards, and business cards. Make sure you have a professional logo that is consistent across all of your marketing materials. Don’t underestimate the power of word of mouth and simple advertising, like putting up signs in front of houses you are working on and on all of your construction vehicles. If you have a larger budget, you might want to consider television, radio, newspaper, or billboard advertising. Go to trade shows whenever possible. This is a great way to meet potential customers and let them know what you have to offer. Your marketing can be much more targeted if you know what kind of customer you are looking for. Think about factors like the scope of the work desired, budget, and lifestyle, and target your marketing campaign to people who meet these specifications. You will probably be able to become more specific in your marketing once you have established yourself a bit. [19] X Research source
Keep in mind that most customers prefer fixed-price quotes. Don’t make promises you can’t keep! It’s much better to finish a project earlier than expected than to finish it late. Your prices need to take into account the cost of materials and labor, as well as your profit. At the same time you need to remain competitive. Consider hiring an administrator who is experienced in bidding projects. Your administrator can quote jobs in a timely fashion, while you focus on completing projects. You could also have the same person submit invoices and collect your payments on time so you have the funds to pay for materials without accruing excessive interest.
It’s a good idea to talk to a lawyer about the kind of language you should include in your contracts in order to best protect your business.
