When you want to build a construction business, the steps are similar to those of any other type of company. Of course, there are details that need to be changed, but the first steps are a foundation for any type of company, from market research to securing the funds you need.
Registering a Formal Business
Business registration is often the first step to being formally recognised. It also places you on the official register for paying taxes and accessing any benefits that come with it. When you register a company with Companies House (UK), for example, it makes the business an entity. However, that means you must also become compliant. So make sure you choose the proper business structure, such as LLC, obtain the licences you need and acquire relevant insurance.
Market Research and Niche Definition
One of the most overlooked parts of starting a new business is market research. It’s great to have an idea, but that idea might not align with what customers want, so securing business becomes a challenge. Identifying a need and filling it is a major advantage, such as paving services. However, a niche can help your business surpass some competitors by capitalising on a specific need. For example, installing concrete garage floors with an epoxy resin coating.
Build a Construction Business with a Plan
It is widely believed that over 90% of new businesses fail within the first year. One of the most common reasons for failure is cited as not having an adequate business plan. Of course,operating a successful construction business depends on much more than a plan, but a plan will ensure you build a solid foundation and get off to the best possible start. It helps to include the structure and management team, the services you will offer and detailed financial projections.
Securing the Necessary Funding
Of course, any business needs funding to start. In construction, new companies typically have a very high startup cost. This is because you need funds for labour, materials and equipment, many of which can be very expensive. As part of your plan, identify accurate costs you can show a lender, like a bank or an investor. You can also secure funding by showing anyone involved accurate projections and the expected time before making a profit for repayment.
Finding and Building the Right Team
No reliable business operates on luck and prayers. When it comes to something as complex as construction, the right team is critical. Hiring skilled workers who are trained, competent and know what they are doing is an essential first step. However, you will also need to network with suppliers for favourable deals and terms. However, a new business needs to build a solid reputation too. In construction, necessary safety and training, such as OSHA, is an advantage.
Summary
Registering your company is one of the most important first steps to building a construction business. Of course, a detailed plan will help you get off to a good start. However, any business also relies upon a well-trained, competent and dedicated team when getting off the ground.
