How To Start A Construction Company

How To Start A Construction Company

Starting and running a profitable construction is a lot more than knowing about hammering a nail or using a circular saw.  Being a successful contractor involves organization, knowledge, patience, perseverance, people-skills, and a number of other traits.  Many business owners fail, not because they weren’t skilled in building a house or completing a renovation, but because they were not skilled in running a business.

The larger you want your construction company to be, the better you need to be as a business owner, as the responsibility will be greater.  It is not wrong to dream big, but if you are a new business owner, it is best to start small and work your way up.

Check here for tips on naming your construction business: Choosing a Construction Company Name

3 STEPS TO STARTING A CONSTRUCTION COMPANY

There are three basic steps to starting a construction company.  The first step is to create some type of business plan.  This is for your own benefit, and will help determine the scope of your business.  Second is registering with proper government institutions.  Lastly, you will need to promote your business in some way to attract customers.

1.  Plan Your Construction Company

Develop a Business plan

Before diving in to any business, you should develop a business plan.  If you want to start a construction, excavating, or renovation company, you definitely need to start with a business plan!  Construction equipment and vehicles can cost a lot of money.  Don’t forget about insurance costs, not only for you, but for any employees.  A business plan doesn’t have to be anything complicated, but is something that will help organize your goals and priorities and help you make wise decisions.

The Roofer's Helper

Planning properly will help you decide if you are going to specialize in a specific niche such as commercial retail work, or if you will offer a variety of services.

  • Set short and long-term goals – Plan your business before you spend a dime.
  • Decide what services you will offer – Decide the scope of your business.
  • Find a niche – What will be your specialty?  What will set you apart from the competition?
  • Choose a business name – Put some thought into deciding a name for your construction business.  Name Ideas: Construction Company Name Ideas
  • Decide what you will charge for your services
  • Financing – You may need to get a business loan

Get Organized

As soon as you start your construction business, you will need some sort of organizational structure so you can keep your customer communications and construction-related paperwork in order.  You won’t necessarily need a full office when starting out.  An office desk dedicated to your company paperwork would be helpful.

Get a daily planner or use your smartphone to schedule estimates, jobs, and other work-related appointments.  An easy way to lose customers is to arrive late or even forget a scheduled appointment.  A schedule will help you plan your day, week, and month, so you can make best use of your time and your customer’s time.

  • Set up an office
  • E-mail
  • Business phone
  • Estimate forms
  • Bill Forms

Equipment needed when starting your construction company

You can’t start a construction company without tools and equipment.  Equipment will probably account for the largest portion of your startup costs.  Starting out, you don’t necessarily need all brand-new tools and equipment.  You will save thousands of dollars in startup costs by purchasing a used truck, used construction equipment, and other misc. tools and equipment.  Another tip is to only buy tools as jobs require them.  This will help keep you from going into debt for tools and equipment you may end up never using.

2.  Register Your New Construction Companyhow to start a construction company

Make it legal

Make sure you are following proper protocol in your region.  This means having necessary insurance, following tax codes, getting proper licenses and permits, etc.  This applies even to a part-time construction business.

Some steps to starting your construction company legally:

  • Select your business structure (sole-proprietor, LLC, Corporation, etc.)
  • Register your business name
  • Register your business entity
  • Register as a home improvement contractor with your state (US)
  • Open a business bank account
  • Taxes- either get an accountant, or do research on filing yourself
  • Liability Insurance
  • Worker’s Compensation
  • City Licenses and Permits
  • OSHA

(The pages below are geared toward roofers, but the information and links will help any type of contractor start a business)

Register A Construction Company In: The United States

Register A Construction Company In: Canada

Register A Construction Company In:  The United Kingdom

3.  Grow Your New Construction Businesshow to start a construction company

In order to grow your construction company, you will need to work hard, have people skills, and be patient.  You will also need to market your business effectively.  Success and profit won’t come overnight.

Customers

Beside employees, dealing with customers can cause a great amount of stress.  Learning how to communicate well with customers can help boost sales and increase word-of-mouth leads.

  • Learn how to sell a construction job to a potential customer
  • Estimate a construction job properly
  • Communicate regularly and clearly with the customer
  • Be fair and honest- take responsibility for your mistakes

Marketing

After you start a construction business, you need to market it.  Some low-cost advertising to get started can include a basic 1 or 2 page website, setting up a free business listing for your construction company on Google and other online directories, social media accounts, business cards and a few yard signs.

You will need to follow a number of steps in order to legally start and own a construction business in the United States.  Every state is different in it requirements for people performing construction work.  You will need to do your own research for local and regional laws regarding construction, insurance, necessary licenses and permits, building codes and other home construction and repair requirements.

The links below will help get you start your construction business legally.  Keep in mind that some states require special certifications and licensing for plumbing and electrical work.  The state-by-state information found below will provide information on choosing and registering a business name, registering your business with your state, setting up taxes, and possibly registering as a contractor.

The information is geared toward roofing contractors, but will apply to any home services or general contracting business.

Click on a state to find out how to start a construction company in that state.

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri

Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming