Setting up any business is an exciting and potentially nerve-wracking process. Jumping into the construction industry can be even more daunting, but it can also be incredibly rewarding. Skilled contractors are always in demand, and the industry is currently booming. In the US alone, construction spending reached a total of $1.3 trillion in 2019, and the rest of the world shows a similar picture.
Before starting up any business, whether it’s based in the construction industry or otherwise, good planning will get you on the right track.
Define Your Business
The construction industry is a broad one and can include anything from a sole-trader handyman to a large-scale company, or anything in between. You’ll need to decide early which of these you’ll be starting up. Also, if you have a specialization, then you will want to tap into that.
While a general handyman can find plenty of work, focusing on a specific area of the construction field may be preferable, especially if you do have a niche skill set or interest. However, if you don’t have a specific skill, then there’s always something you can do about that.
Even if you’re generally skilled at patching things up at home, an actual qualification in the construction industry is a must. If you need to, complete a training course in a specific area and find your niche there.
Specialized training can lead to higher dividends in the future. For example, a specialized plasterer can earn up to twice the amount as a laborer. Of course, this varies depending on the demand in your area, so researching which niche earns more in your area may well be a good idea.
Have Some Capital Ready
As the saying goes, “you must spend money to make money”. This principle applies to the construction industry, as setting up may require equipment, office space, employees or subcontractors, and a decent insurance plan, as well as other things.
Having some capital on hand, or a good relationship with your bank and other potential investors will ensure that your business doesn’t fail before it can even get off the ground.
No matter what your niche is, if any, you will need some kind of tools, equipment, and a way to obtain construction supplies. While the client may be able to supply materials, depending on what you agree with them, you will have to provide the equipment. You can find all kinds of construction equipment here so that you can take on any project.
One of the hidden costs of setting up a construction business is making sure that everything is legal. Not only will you have to register your business, but you will also have to make sure that all of your permits and licenses are up to date.
For example, an ordinary driver’s license won’t cover the operation of heavy machinery. You will also need to be certified for certain types of construction work. Ignoring all of this can result in some nasty fines for both you and your client, not to mention some projects potentially being abandoned.