Got The Entrepreneurial Bug? Why Not Start Your Own Small Construction Company!

Posted on Oct 3 2014 - 8:28am by Editorial Staff

Business

It’s no secret that the construction industry has taken a big hit during the last decade. That is thanks to the effects seen in the global economic crisis. Back in those days, many homes got foreclosed, and construction of new homes pretty much stalled.

The US is one of the many Western countries that is licking its wounds from that financial fallout. These days, the news is good. People are getting employed again, and they are more careful with their money.

The rotten apples of the financial world got ousted. The economic outlook for the near future is looking rosy once again.

People are starting to buy new homes again. And organizations are paying for new buildings to get put up. Today is as good a day as any to start a new business in the small construction company sector.

In this handy guide, I will share with you some tips and tricks to setting up your own construction company. Here is what you need to know.

Learning the trade

Starting a business isn’t always as easy as it sounds. There is a lot of pressure on business owners to manage various aspects of their new companies. And they must do so with near-expert knowledge if their companies are to survive.

When you start a small construction company, it is important you know what you are doing. Companies in this sector need a lot of investment, skill and experience. You will have employees that depend on you, and an ever-increasing amount of responsibilities to bear!

How do you run a successful small construction company? Well, you first need to have plenty of practical experience within the industry itself. In other words, you need to work for other companies first.

By doing so, you can gain a competitive advantage over other companies. You can learn what customers want and what they dislike about the companies they hire. You can also build up a network of industry contacts. After all, it’s easier to start a business if you have reliable contacts that can offer help and advice!

There are plenty of jobs within the construction industry, so it’s up to you to decide what discipline you wish to specialize in. Some folks start out as laborers. Others go to college and university to get technical jobs.

Red tape

The thing about starting a business in the United States is that there is a lot of red tape to deal with before you can start making money!

Permits and licenses vary from state to state. If you go on the sba.gov website, you can use the handy tool on there to find out what you need in your specific state.

Besides the red tape, you must also put in place the right insurance cover for your small construction business. Insurance is always needed for you and your workers as well as the projects and sites you work at. You will also need insurance for any tools, machinery and equipment.

Surety bonds

In the construction industry, contractors should have surety bonds. Never heard of surety bonds before? No problem, let me explain.

A surety bond is, in essence, an insurance policy for you and your client. Let’s say that you hire some contractors to carry out certain tasks on your building project. It’s not a strange thing to do; most construction companies do this.

What if one of your contractors fails to complete a task on time, or they just disappear one day? The surety company will find another contractor to finish the job. If they cannot find someone available to take over, they will pay compensation to the project owner (your client).

The link in the paragraph above is a list of government-approved surety companies that you can buy bonds from.

Occupational health and safety

Given the nature of your company, you must have a good occupational health and safety plan in place. It’s needed, so your workers have peace of mind that precautions are in place to ensure their safety at your construction sites.

There are plenty of online tools that can help you make a plan for your small construction company. Those tools can also help to identify whether you need to have consultations or training.

Machinery

One of the biggest expenses of any construction company is the machinery needed for working on projects. After all; your workers can’t do their jobs without the right tools at their disposal!

Websites (like http://plant.autotrader.co.uk/) give a good idea of the cost to buy machinery. As you are starting up from scratch, you might want to consider buying used machinery.

Is it essential that you have new machinery and equipment? If so, there are many organizations that can lease equipment out to construction companies. Explore all your options before opting for a specific one.

Labor

Another big expense of all small construction companies is labor. Let’s face it; you can’t do everything yourself at a construction site! That’s why it is important that you hire people to work for you.

The trouble is; finding the right people for the job can sometimes be hard. You never know whether the people you just hired are going to do a good job or not! Organizing labor for your small construction company needs a lot of good judgement.

When you interview candidates, you have to go with your gut feeling on whether they will make you proud or cause you hassles on the job! The good news is that there are plenty of guides available that can show you how to hire the right people for your company.

When you hire labor, you need to decide how you are going to do so. Some companies prefer to use brokers for outsourcing labor. Others will hire self-employed contractors. One of the benefits of the latter is that you don’t have to worry about paying for employee benefits.

Well, I hope you have found this guide useful today. Thanks for reading it!

About the Author
Editorial Staff

Editorial Staff at I2Mag is a team of subject experts led by Karan Chopra.