Starting a General Construction Company: The Smart Way
Starting up a construction business can be challenging. Demand can be very volatile in local markets. Licensing, insurance and startup costs must be well planned.
Before you start a construction business you must ask yourself these questions:
- What craft or skill do you have? Construction is an industry that comprises a wide range of activities involving construction, alteration, and/or repair. Not knowing the trade puts you at a competitive disadvantage.
- Have you worked within the industry to gain sufficient experience? Have you worked in the construction field long enough to have established relationships within the industry. Do you have a reputation of doing good work and completing the work on time and within budget?
- Do you have business skills? Do you know the aspects of running a business? Make sure you understand your responsibilities as a business owner, understand that having a business is all about growing and creating job. It is not about just making a living. Are you meeting the needs of your target market?
- Do you have a business plan? Focus on goals. Take the time to study the business and industry set up realistic goals. Take the time to understand how to achieve success and know what is required.
- Do you have start-up capital? Can you demonstrate financial responsibility? You must understand that besides the fees to register your business with the State, you must have the money to take the necessary tests for licensing. You will need money for insurance, including general liability and workers compensation.
There are several schools that will help you getting your contractor’s license, be aware that it will take time, money and test taking. Depending on the license the process may take from 3 months to a year. All licenses have one test or two that will be business related and one or two that will be technical.
Here there is a list of mistakes that construction business owners must avoid:
- Not empowering employees
- Letting someone else keep your books and manage money
- Hiring cheap labor instead of skill workers
- Not renting or leasing equipment instead of buying it
- Not having bid experience
- Not investing in new technology or software program to make process easier
- Not having an strategic plan
- Not being proactive.
- Waiting for the economy to be at its peak
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