How to Build a Thriving Small Construction Business
There are many people who are rebuilding their homes and planning to renovate their houses. If you’re handy with tools and have an interest in construction, this can provide more benefits than just maintaining your house and garden. Starting a business in the construction industry is tough but not impossible. Below we share tips on how to build a thriving small construction business and stand out from the crowd.
If you have experience in construction and like to create things, your own small construction business may be worth looking into. You can work for individuals and companies, perform complex work, or do smaller jobs like installing windows and doors.
Draft a Plan
Before you begin your entrepreneurial journey, make sure to have a well-written construction business plan. It should serve as a roadmap that will describe the services your construction company will offer, how to market your business and what tools and equipment you need to buy.
There are several areas of expertise in the construction industry. For those of you who want to start a construction company, you must select an area of expertise that you want to invest in or several more to be able to get more jobs.
If you’re going to have several areas, you need more staff so that each area gets the right skills. The advantage of covering several areas is that you can get more or larger jobs with the same customer. The advantage of being able to do the entire contract job is that you do not have to collaborate with other companies. In collaborations with other companies, there may be unnecessary costs and time losses.
Before You Get Started
One of the first steps to opening a construction business is noting down your strengths and establishing a list of tools you need to complete your tasks.
Do an inventory of your tools and equipment. The tools and machines you need depend on the services you plan to offer your customers. Maybe the equipment you already own needs to be updated or replaced with more professional items? Buy the equipment you’ll need, such as ladders, saws, carpenter tools, and accessories. You might also need specific equipment like a plastic poly drum that provides safe storage, handling, and transportation of hazardous materials.
You should also check the competition in your area and make a list of subcontractors as you may need help with certain assignments, and then you can hire other craftsmen if needed.
Don’t forget about insurance to protect yourself if something goes wrong at your customer’s house, and it reassures the customer that you’ll be able to cover the costs of any mistakes.
Set the Right Prices
Learn the art of setting the right price. Your prices must take into account the costs of materials, labor, and profit. At the same time, they must remain competitive. Underestimated bids to win jobs will only make you lose money. If the quote is too high, it can cost you the job.
Spend some time learning to determine pricing structures, what it takes for different jobs, and your margins. Hire someone more experienced in the construction industry if you don’t feel confident.
Customers are looking for skilled workers who can provide quality work done quickly. Construction companies often submit bids to get construction projects that they can work on. Winning in construction project bidding is not easy, especially for newcomers who have not yet built up their reputation as credible and competent contractors. It’s therefore important that your construction company can have an impact when you submit suggestions and estimates to potential customers.
Present professionally made suggestions and carefully made descriptions to your customers. Also, provide competitive pricing so that potential customers will consider choosing your construction company for the project. Building credibility and getting good references for the first projects is very important because it can help your company get more customers in the future.
In case you get a job that you cannot do yourself, you need to find the right assistance. You will therefore need a network of carpenters, masons, roofers, electricians, plumbers, and other craftsmen who show good qualities. When hiring unknown subcontractors, hire only those who have good references and an excellent reputation.
Marketing your construction company should be one of your top priorities when you start. Advertise in regional and local community newspapers. These are all great places to look for new jobs. In your marketing material, note the work you do, successful projects, licenses, insurance, and that you are a reliable entrepreneur who finishes his work on time and has respect for his clients.
Network with local plumbers, plumbing technicians, and other subcontractors so you can work together on different jobs and recommend each other.
Word of mouth is huge in the construction industry; if you do a good job, clients will recommend you to others. Offer discounts to your first customers. Let your friends, neighbors, and relatives know about your new business and ask them to spread the word among their friends and colleagues.
Building your own small construction business isn’t the easiest process, but it can be a rewarding one. Start by building a strong foundation, have a solid strategy in place, work hard, and you’ll create the right conditions to make the business thrive and stay successful.