A successful construction business is going to begin and end with hard work and unbeatable services, but financial pitfalls are around every corner. Understanding the market, the industry and a little about finances can make all the difference in those first few months.
Creating a Business Plan
Creating a business plan for a construction company does not need to be some drawn out and stressful affair. In fact, those experienced with the industry and the location of the business will only need to organize the structure of their business and outline the steps for creating a business. The only time a comprehensive business plan is necessary is for owners that need business loans or investors.
Get Licenses, Bonded, and Insured
This is typically going to be one of the single most important steps of creating a construction business for quite a few reasons. Getting insurance and bonding will protect the business and the owner, depending on the style of company that was formed, in the event of common accidents, injuries or legal battles. When a case reported by the Bureau of Labor Statistics showed that a single lawsuit could reach $100,000 or more, you know the risk is simply not worth it. Licensing is another important step as it will not only attract more clients, it will also help the company avoid serious fees and legal repercussions on a state or local level.
Finding Suppliers, Contractors and Distributors
This tends to be one of those steps that many business owners will forgo, especially if this is their first company. Finding the correct distributors and suppliers, even for generic items such as basic tools and bolts, could save thousands in the long run. One step further, developing a relationship with suppliers, contractors, and distributors could mean reduced overhead, discounted prices, and the sharing of clients whenever possible.
Creating and Tweaking a Financial Plan
As the business slowly begins to grow, it is important to always think a step ahead about what is going on. Even a company with unparalleled services and a great staff could find themselves a step behind when it comes to major obstacles. Business owners need to constantly reevaluate and change financial information for taxes, advertising budget, new supplies, a growing office, payroll and everything in between.
A construction business can be highly lucrative under the right circumstances, but there are also some common mishaps that could take place. Business owners will need to focus on financial planning well before those first few months in order to manage their growth.