How to Start a Construction Company
Whether you want to be a general contractor or start a small construction company in a specific niche, entering the construction business is a process.
But fear not. Licenses, equipment, and training may be required, but with a solid construction company business plan and a clear direction, you can start your own construction business.
According to Forbes, Abrigo’s ProfitCents, and the U.S. Small Business Administration (SBA), the construction industry is currently experiencing significant growth and is expected to remain strong for years to come. Fast-growing small businesses are often connected to construction, such as finishing contractors, utility systems construction, and structural construction.
This is not surprising, considering that buildings, roads, and systems are necessary for residences, commercial use, industry, and public works. In countries like the U.S., Canada, and the U.K., the construction industry typically contributes six to nine percent of the gross domestic product (GDP). In 2014, the construction industry generated $960 billion in annual revenue, and employed an estimated 5.8 million people, with the average firm having fewer than 10 employees.
Although the construction industry has its ups and downs, it will always have demand, which means there are opportunities for new businesses to thrive.
How to start your construction company:
1. Determine the scope and niche of your construction company, which can include buildings, infrastructure, or industrial projects.
Here are factors to consider:
– Assess your skills and determine which field you want to enter.
– Understand the current construction company landscape in your area.
– Identify growth opportunities for a new business.
– Define your target customers and who will pay for your services.
– Create a plan for financing your company.
– Understand and adhere to legal, trade, and regulatory requirements.
– Determine the space you’ll need for equipment and office personnel.
– Assess the vehicles, equipment, and materials you’ll need.
– Determine what work you’ll do yourself and what you’ll subcontract.
– Build a comprehensive business plan that includes executive summary, cash flow projections, break-even analysis, profit and loss projections, balance sheet, and business ratios.
Starting your construction business requires planning and preparation, but with the right approach, you can set yourself up for success.
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I’m Andrew Brooks, a seasoned finance consultant from the USA and the mind behind phonenumber247.com.
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