For those who like to work and are self-motivated, starting your own construction company can be very satisfying. Yes, there are challenges—it is a lot of work and has its share of headaches—but the rewards can far outweigh those things.
With different levels and types of contracting to go after, there isn't a cookie-cutter method for where to start. You may begin with small residential remodels and building decks, or you might have the opportunity to start in a larger commercial setting as I did, building a chain of grocery stores. Regardless of where you start, there are several basic principles that will help lay the foundation for a successful construction business.
Listed below are some principles from my own experience that I would like to share with you.
When you are starting out, stick with what you know and what you are familiar with. You want to show you are an expert in what you are doing. This will also help prepare your company for future expansion.
Get a mentor. If you are serious about starting a construction company, you probably realize when looking back that you had help getting your skills to where they are now. A mentor is someone who has already walked your path and can share knowledge, experience, and pitfalls. Whenever I see an opportunity to have a mentor, I will always choose the mentor over the possibility of making a mistake.
Put a business plan together. It does not have to be elaborate or expensive. It is a snapshot of your business and touches on your profile and goals. Include your company’s description, marketing and sales, service and product line, management structure, and goals. If you need help, get someone to ask you the right questions. Get it down on paper—you can always tweak it later.
An accountant can help structure your company for the best tax advantages and protection. Should you be an S or C corporation, an LLC, or a sole proprietor? This is an important decision at the beginning of your journey.
Working with a bank or other financial institution can help your company when cash flow is tight. A bank that does a lot of business with contractors can help you set up an available line of credit you can easily access. Even though you want to move toward self-financing your projects, access to credit is a must.
Finding and obtaining good skilled employees can be challenging—especially when the construction industry in your area is booming. This can include employees in the field as well as office management. Realizing this is an ongoing search, you should keep your eyes open for potential employees. I always had a few young employees I would train and develop to my standards for the scope of work I wanted them to perform.
Getting good legal advice can avoid a host of problems. Sitting down with an attorney who specializes in construction can give you direction and protect you in ways you are not aware. Have your business plan reviewed yearly and keep your company protected.
Safety always starts at the top of the chain. If management is concerned and promotes a safety culture within the company, that will flow down to the rest of the employees. Start developing safety practices and procedures to put in place that will set the tone for your employees from the start.
We all need insurance, but it must be the right insurance. Having an insurance carrier who not only understands construction insurance but has firsthand knowledge of the construction industry is critical for your business to be protected. At Acuity, we know construction. That is why over 40,000 contractors trust us to protect their Business. With 96% customer claims satisfaction and specialists who know your business, our focus is you.