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Bootstrapping for Success: 6 Things You Will Need to Start a Construction Company
Get started today on your dream to own a construction company. It seems like a massive project but the rewards are great. This is what you worked for all your life and it's time to do the groundwork. First, you need a company name, a comprehensive business plan, and a loan. Any bank or loan company will want to see a business plan before doing business.
A Strong Business Plan
A business plan serves as a roadmap for where the company is going. Describe what type of construction the company will perform. Further, state your base of operation and the number of employees. In addition, detail the equipment requirements. Most new companies have to get a loan for equipment and vehicles. It's a good idea to head to Equify Financial for more information about financing. Finally, show statistics that emphasize the area needs more construction companies.
Nuts and Bolts
There are basic things that every start-up should do. The company needs an Employer Identification Number (EIN) from the IRS for countries like US, PAN/GSTIN etc for India and it varies from country to country. The EIN is required to open a commercial banking account. Further, the company needs to be licensed. Check with the local government about the exact requirements. Also, focus on hiring one or two experienced people. Make them the foundation of the staff.
Industry Regulations & Right Equipments
Familiarize your staff with the rules of the industry. Learn the building codes in the area. Often, there are different classes of construction companies. Find out what class you're in and learn the rules that pertain to the company. Additionally, OSHA has practices and regulations for companies to follow in USA while Factories Act is what holds in India. Moreover, find out about personal protection equipment (PPE) mandated by OSHA.
Make sure you are equipped with sufficient finance for purchases of construction equipment needed according to size of your company or at least know contracters who can help you with it. You might transport facilities, earth movers and more. If you were in Bengaluru, then dealers like Mahaveer Distributors who provide all construction equipment spares could give you insights into how you could go about procuring and connecting with right people to get your construction equipment right.
A company will not be in business long if they don't have insurance. Each company needs builder liability coverage. The policy protects against injuries, accidents or property damage. This insurance pays for damages up to the coverage limit. The limit covers the value of the finished building. A performance bond protects the project owner from losses if the company fails to complete the job.
Additionally, the company's equipment and vehicles need to be insured. Likewise, the company needs workers' compensation to protect injured workers. You don't want to be personally responsible for paying medical bills. Construction is a dangerous business and accidents are bound to happen.
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Get the work you need by marketing the company. Advertise several different ways and don't forget the social media presence. A dynamite website and facebook page are a must these days. Tell family, friends, and neighbors about the new business. Word of mouth is likely to get you some business. It's also a good idea to offer a discount for the first few customers. In fact, doing a special project may land you on the news. For example, make the company's first project a "Habitat for Humanity" home.
Find Your Niche
Concentrate on the work that's in demand or focus on what you enjoy doing. For instance, look at the assisted living business if there is a demand in the area. Learn to build beautiful ranches because the aging population is looking for homes on one level. It's risky to bill the company around trends because the trend may go out of style. For example, many companies bill themselves as "green companies." The "green" movement will probably be around for a while.You've done the homework and it's time to go to work.
Running your own business is daunting but be prepared for the task. Hire the best workers and take the necessary safety precautions. The company will be a household name in no time.
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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 1st September 2019.