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Essentials for Success in the Construction Industry
Construction Industry is a complex industry and one needs great insights to get everything right. Here's what can help you get a starter and these basics can get you started on the right track. Read ON!
According to the American Institute of Architects (AIA), there hasn’t been a better time to start a construction business so if you’ve been thinking about it, you better strike while the iron is hot. The AIA also states that the industry is expected to grow by 4% in 2019, so imagine how many doors will open up for construction entrepreneurs.
Whether you’re in the construction industry or restaurant business, starting your own business is no easy task, regardless of the industry. From bad customer service to not meeting the needs of your customers, there are several reasons why businesses fail and the Small Business Association (SBA) states that two-thirds of businesses fail within two years. The crazy thing about that is that out of the two-thirds, those are businesses that have employees.
Now, that’s not to say that if you start your own construction company, your business will fail within the first two years… but there are aspects to the business outside of the financials of it all. We’re going to take a look at aspects to starting your own construction business and how to get it started on a solid foundation.
First Thing’s First: Draft a Business Plan
For every successful business you’ve seen, you can best believe it started out with a good and solid business plan. Your business plan does way more than just put your ideas in writing… it’s literally the blueprint to how your company will make money, if it makes sense, and the steps you need to take to get the business off the ground.
In addition to that, if you’re going to need funding for your construction company, you’re also going to need your business plan as thorough as possible because that’s what potential banks and investors will be looking at to see if they’re making a good investment in your business or if they feel like they’ll be throwing money away fooling with you.
Luckily, most business plans have a simple template that you can follow to get all your ideas and plans out. If you follow the steps of the template, you will be able to produce a well-structured and thought-out business plan.
Get Your Business Registered
Now that you’ve created a business plan worthy of moving forward in your business venture, the next step you’ll need to take is getting associated with the different types of rules, licenses, and permits that may be required for your business to legally operate according to the state, county, or town your business will be operating in.
Obtain Your Business Entity
Registering your business entity is the first step towards ensuring that your business is really real. Most business owners opt for a limited liability corporation (LLC). This will give you options for paying your business taxes all while protecting your personal assets.
Apply for Necessary Licenses
In order to tear down or build buildings, your company is more than likely going to need certain licenses to operate. It could be something fairly simple like being recognized as a contractor in your local area. Depending on where your business will be operated, you may be required to have a license to install HVAC equipment. You just have to do your research to see what is required for your location.
Cover Your Business With Insurance
Making sure your business is covered by insurance is right up there with the importance of getting your business registered. When people hear the word “construction” red flags immediately pop in their heads because it is a job that has several safety hazards. You will have employees working with heavy equipment, electricity, and other types of machinery that can cause someone much pain if injured on the job, so make sure you have insurance to cover those types of instances.
Have the Right Type of Equipment
As far as equipment is concerned, you’re going to need everything in the book. From drills and nails to sturdy flatbed trucks and mini excavators! Some of the tools and equipment you use are more cost-effective to rent rather than to buy so you will, again, need to do your research to see what options will work best for you, especially in the beginning stages of establishing your company.
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Hit the Ground Running
Now, there’s a lot more that goes into getting your construction business off the ground; we just touched on the upfront necessities to be aware of. It’s always helpful to know tips and tricks of any trade upfront just so you won’t be blindsided going into it. If you stick to these guidelines, in conjunction with your own research, your business will take off before you know it! Good luck!
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Any facts, figures or references stated here are made by the author & don't reflect the endorsement of iU at all times unless otherwise drafted by official staff at iU. This article was first published here on 20th April 2019.