10 Steps to Building a Construction Startup

1
Put together a solid business plan

Create a business plan
Make sure your business plan is solid. CP Cheah // Getty Images

 Before opening a new construction business, it is important to understand the amount of preparation and work that is involved. Establishing a new business of any kind is never easy, and there are always things to consider that may or may not be in the forefront of one's mind, even an experienced entrepreneur. Are you ready to launch your construction startup? Here are 10 things that should be at the foundation of your plans.

Your business plan should clearly establish the goals of your construction business. It should include detailed plans for every stage involved in the process along with the timeframe and funding you will need to meet each of your goals. Include anything you believe relates to the smooth operation of your business. Your business plan needs to be thorough since you will need to supply copies of your plan to financial institutions when attempting to borrow funds.

2
Find a good home base for your startup

Commercial lease
Running your business out of your home isn't ideal. Peter Dazeley // Getty Images

While many construction start ups begin in the owners’ homes, eventually you will want to move into more official business premises to legitimize the business. The property you choose as a home base will need to have adequate office and storage space since you will likely be storing equipment and tools onsite. The location you choose should also have ample space for parking vehicles used in the business. 

3
Get your legal ducks in a row

Rubber ducks count for more than traditional.
Get them in order!. Image Source // Getty Images

The best way to establish your business as a professional operation and to instill confidence in it is to show that you are organized, efficient, and compliant with all relevant regulations, laws, and standards. Be certain of all the certifications, licenses, permits, and registrations that are mandatory for the business. These vary by state, city, and locality, so do your homework. Hire a lawyer if necessary

4
Understand your tax requirements

Once your ducks are in a row...
Unfortunately, it costs money to run a business. carebott // Getty Images

Hire an accountant and iron out what documentation you will need to have on file for your deductions. Audits are not terribly common, but they do happen, so you want to be prepared and you want your books to be accurate. 

5
Understand your insurance responsibilities

You don't want this guy getting upset.
Make sure your insurance is in line. PhotoAlto/Eric Audras // Getty Images

Arrange a meeting with an insurance agent and talk with him or her about the coverages required for your business. You need to protect not just business assets, but also yourself should work-related injuries, personal liabilities, or damage to clients' property occur. Both you and your business need to be fully covered.

6
Secure your financing

Dollah dollah bills
You can't start a business without capital. Ryan Etter // Getty Images

You will need to purchase, rent, or lease equipment, tools, and vehicles to get your business started. You will also need to pay your bills, invest in advertising, and meet payroll. You will need to secure funds before you bid on your first contract, so apply for financing early on. 

7
Network with suppliers, business associates, and other contractors

You gotta meet people.
Network, network, network. It'll pay off. Paul Bradbury // Getty Images

Open accounts with several suppliers and establish credit with them. You will need to have a good relationship with other contractors so you have people to call upon to help you complete jobs you either cannot finish yourself or don't have the time to complete within the deadline. You will also need to establish good relationships with industry professionals, including building inspectors.  

8
Decide whether to hire employees or contractors

Hire the right people. It'll make a difference.
Invest in your human capital. Roberto Westbrook // Getty Images

Will you keep full-time staff or simply hire contractors when you need them? There is greater flexibility and lower cost involved with dealing with contractors since you don't have to pay benefits (in most cases) or continue providing a salary when business is slow. At a minimum, though, you might consider having a full-time assistant whom you can train to know all the ins and outs of your business and keep things running smoothly. People also appreciate hearing a familiar voice when they call your place of business. 

9
Establish an advertising and marketing budget

Your company can go here!
Consider investing in big ad placements. Dragan Grkic // Getty Images

You might decide that your advertising needs are as simple as signage for your job sites. You might also decide you need ​more – radio, TV, and online marketing, like a website and blog. You will also want to create a logo to establish your brand. Other recommended promotional items include business cards, brochures, and, eventually, a business portfolio. Whatever you do, don't skimp on the marketing. Allocate more than you think you'll need for it. 

10
Allocate funds for construction software

Construction software is actually pretty cool.
Construction software is a worthwhile investment. Mareen Fischinger // Getty Images

Don't forget to allocate some funds for construction management software to run your business, as this will allow you to streamline and automate various processes. The right software solutions can eliminate hours' worth of work per project, even per day.