There are many reasons why you might want to start a contractor business. Maybe as tradesmen, you’ve reached the pinnacle of what you can do and would like to branch out. Maybe you want more responsibility, or you just love a challenge. Whatever the reason, becoming a contractor is a big step, but also one that can lead to amazing things.
That said, you should know that there is a lot more to being a contractor than knowing how to build things or install plumbing and wiring. You need to be good at working with clients. You need to manage your staff effectively. You must be a master at project management, and you have to be able to keep to a budget. If you think you’ve got what it takes, open up shop by all means. However, don’t go in blindly. Here is a quick beginner’s guide for new contractors that will help you get your new business on track.
Start With a Focus
When some people start a business, they get very excited. For new contractors, the temptation is often to take on any and every job that might potentially come their way. At the same time, this seems like the best way to bring in revenue and goal. It might not be sustainable. You could overextend yourself and lack focus on what you are doing. Instead, it’s a good idea to choose a focus.
Do you want to do full residential builds? Maybe commercial work? You may also want to do renovations or road work. Whatever it is, choose something you are already good at, and do the best you can with it. Then, as you build successfully with that niche, you can branch out into other ones. This will allow you to grow responsibly and sustainably and make sure that you build your team’s skills as you go.
Get Educated About the Construction Industry
Before you start as a contractor, you need a broad education regarding the industry. That means knowing the big strokes and the nitty gritty. Get familiar with building codes, government regulations, business regulations, permits, licensing, and every other piece of red tape you might need to deal with. You should also know about the market in your area and what the current trends are for construction. Your goal should be to make yourself an expert in everything surrounding the industry. This will not just be valuable for your work, but it will also help you decide if it is an industry you truly want to be a part of.
Make a Plan
New businesses should always start with a plan. Your business will help keep you on the path forward by mapping out your goals and how you intend to achieve them. Make sure to include your upcoming digital marketing trends, projected costs and revenues, staffing needs, and how you will run your operations. Your plan is not just helpful for you, and it will also be helpful to any potential investors and lenders. They will require a detailed plan that shows that your business is viable if that plan is followed correctly.
Invest In Equipment
The fact is, by the time you are out on your first job site and potentially bringing in revenue, you already need to have everything in place. That includes all the equipment you could feasibly need to handle the types of projects you will deal with in your niche. Of course, you will want the common items, such as backhoes, cranes, and tools. However, you can’t forget about the equipment for the details. This includes moving debris and carrying heavy materials and equipment. A forklift is always handy as long as it has pallet forks that suit the size of pallets that you tend to deal with on-site or that can be adjusted. If you don’t have the right equipment before the job, then you may have to deal with budget-busting delays as you wait to get the right piece on site.
Get All Applicable Licenses
There are many red tapes when it comes to construction, and you need to ensure that you have everything covered. For example, you will need a general contractor’s license from your staff. This shows the public that you are a reputable business to work with. You should also have a specialty contractor’s license if you work in a certain field. Any staff providing specialities, such as electrical, roofing, plumbing, and HVAC, should also have the appropriate license.
On top of that, always make sure that you have insurance. First of all, many safety issues are involved in the construction industry. Second, you are entrusted by the client to finish their project on time and on budget. However, mistakes happen, so you must ensure you are protected from financial fallout.
Get Funding
Since you will need the equipment, the staff, the licenses, the insurance, and other components of a construction business before a shovel hits the ground, you will need funding up front. If you’re lucky, you can self-fund your business, which can cost thousands of dollars. If you want to get financing, then you can approach investors to get upfront money in exchange for a share of the profits. You can also approach a financial institution for a business loan or take advantage of business grants to make sure you are covered for the initial phase of your business.
There are many reasons to become a contractor and go into business for yourself. You can make a great living, be your own boss, and watch projects get built from start to finish. However, you do need to ensure that you have everything in place to hit the ground running and build your business to succeed. Follow this guide, and you will be well on your way.