Establishing Your Own Construction Business

The construction industry will always be in demand, whether it’s to build commercial spaces or residential properties. Starting your own construction business is a good idea, but like any start-up, it will come with risks. One of the most common problems these projects face is running out of money before completion. This is why vigorous planning and realistic budget setting is important before you start any construction project. This is also true for starting a new business venture. If you’re looking to establish a construction company there are some essential points you will need to think about to give yourself the best chance of success.

Experience

Having the correct experience is vital for any person who is thinking of starting their own business. Working in the industry for at least five to ten years is advised, as the more hands-on experience you have, the better. It will provide you with essential knowledge of your craft, as well as give you the confidence to make informed business decisions. It’s also wise to take some courses in business management to improve your understanding of how you can utilize your resources for the best economical results.

Identify Your Clients

As a construction company, are you going to focus on domestic or commercial properties? Or is there another field within the industry you have experience with? You must ensure that there is room in the market for your business, and where possible, to find a niche that has yet to be capitalized on. In doing so, you will increase the competitive nature of your business by offering something other companies cannot. Understanding your key demographic will also help you market your business effectively, and avoid confusion later on down the line. Carry out thorough research before you invest any money to make sure that you have a viable, profitable business.

Production and Manufacturing

If you’re going to manufacture your construction materials yourself, you will need the space and the correct equipment to do so. Consider carefully the size of the space you will need to do this work and find a warehouse that is suitable for your needs. It will need to be big enough to store your materials and house the industrial machinery you will be using. In terms of equipment, make an extensive list of the tools you will need for this work. For example, if you’re going to be welding materials items such as Leister Heat Guns, welding kits and protective clothing are all essential. If you’re not going to be manufacturing your materials yourself, you will need to find a reliable and affordable source to buy from.

Cash-Flow

Financial backing for your new construction business will be required and you will likely need to secure a business loan from a bank or private investor. Before you approach anyone asking for money, you must have a thorough, professional business plan to present to them. In this plan, you will need to prove there is a market for what you’re offering to consumers and how you can deliver your services effectively. You will also need to show them cash-flow forecasts, which are realistic estimates of your outgoings and potential income revenues. All investors want to be confident that the business will be profitable, otherwise they will not want to take the risk with their finances. You should also be able to provide a percentage of this money yourself because if you don’t appear willing to provide some financial support for your own business, this will be off-putting to other investors. Furthermore, you will need to provide them with evidence that you will be able to afford the loan repayments.

Branding and Marketing

All businesses need to have good branding and marketing strategies to increase awareness and income. You must stand out from other companies in the industry, but you may want to look at their branding and marketing strategies for some ideas on how to make your own successful. As a construction company, make sure that it’s clear what kind of work you specialize in (e.g. commercial construction) to avoid confusing potential clients. Have a website built and promote that through SEO marketing tactics and social media. You should also target B2B publications and other relevant media outlets. Consider hiring a marketing agency to help you develop your brand and marketing campaigns.

Distribution

Another consideration you need to make is how you can distribute your goods and materials to various construction sites. If you are manufacturing your materials, you need to hire or purchase the correct modes of transportation that will get to and from the warehouse and sites safely. If you’re sourcing the materials from elsewhere, you must do everything you can to make sure that they arrive at the construction sites on time so as to not delay the projects. This can be arranged and discussed with the company who is supplying your goods.

Employees

You will need a strong, reliable team of people to help you with your start-up. Not only will you need experienced contractors, bricklayers, electricians, plumbers, and so on to work on these projects, but you will also need a strong team who can manage administrative work in the office.

For the former, you may want to outsource these professionals from reliable companies/agencies for different projects. You may find this is more cost-effective at first as you won’t have to pay ongoing salaries for individuals. Instead, you will pay for the time they work on the project instead. Alternatively, you may want to start with a small in-house team of people you trust and have worked with previously as you build up your business. Think carefully about the size of the team you require, and how many employees you can afford to pay a proper wage for their work.

Every start-up business needs extensive research and planning, but a construction business is unique to the size of its operations. It is a service that will always be required by society, but that doesn’t mean starting a business in construction will guarantee success. Think carefully about the things listed above and how you can deal with them before you start your business.