It took a while for the industry to rebound after the recession, but the construction industry is booming again. This is particularly true in the residential sector, in which residential construction was among the fastest-growing small business industries in recent years due to increased housing demand and lending activity. Six of the 10 industries in that study were related to construction. Even commercial construction is seeing some steady growth.
This means that if you’ve been interested in starting up your own small construction company, now is a great time to get into the industry. Here are some tips to keep in mind as you go through the process of starting up your new business.
Seek help wherever you can find it: There are plenty of small business assistance programs that can help you through the business formation and development processes, including your local Small Business Development Center (SBDC), SCORE Mentors or programs offered through the Small Business Administration (SBA). Be sure to take advantage of all of these resources—you’ll be much more likely to succeed if you don’t try to do everything by yourself.
Get a loan: You’re going to need some financing to get your new company off the ground. Consider applying through the SBA loan program. There are also more traditional financing options available through banks and credit unions.
Get licensed, bonded and insured: This is an important step for any business, but especially for businesses in the construction industry, which has more inherent dangers than most other industries. Protect yourself, your clients and your company by having all the correct licenses, insurance policies, permits and surety bonds before you begin taking on any kinds of construction jobs.
Get familiar with construction industry regulations: Chances are if you’re looking to start a new construction business, you’ve already got some level of familiarity with the industry and its regulations. But as the owner of a new construction company, it’s absolutely crucial for you to deepen your understanding of these regulations and make sure you are well-versed in any guidelines that could affect your business.
Develop a workplace safety and health plan: The Occupational Safety and Health Administration (OSHA) requires all construction companies to give their workers the safest workplace possible. The SBA has a Workplace Safety and Health guide that has some very helpful resources that can assist you in the establishment of a workplace safety and health plan.
Find skilled labor: There are multiple different sources of labor in the construction industry, including hired employees, independent contractors, subcontractors and labor brokers. The type of worker you choose will affect your business in different ways with regard to taxes, wages and payroll issues. When you’re just starting out, it might take some time before you can hire employees—you might need to rely on independent contractors and subcontractors.
Get legal assistance: As a new business owner, having an attorney you can talk to about business formation, hiring issues and regulatory compliance is crucial to the long-term health of your company. Find an attorney you work with easily and can trust to have your best interests in mind.
To learn more about starting up a new construction company, contact us at Patin and Associates today.