18 Tips On Starting A Construction Business Successfully
Due to the recent rise in population, the demand for construction firms is on the rise and this rise in demand has caused a corresponding increase in the number of buildings.
Your reason for considering a path in the construction industry may be because of the high demand for construction firms but truth be told, there is a high possibility you will face a lot of competition. Read the article on the future of the cement and concrete industry.
One of the top industry startups out there is construction. The only problem is that it’s also the industry with some of the highest rates of failure within the first five years.
In fact, over 63% of construction businesses just don’t make it to that five-year mark at all.
Whether it’s a lack of knowledge, a lack of correct software, or a lack of money, your business doesn’t have to be one of the ones that fail.
Just like every other business venture, when thinking of setting up a construction company, you must spend a great deal of time studying the ins and outs of the business. It is not an easy task to start a company, and a lot of issues need to be taken into consideration.
With this in mind, I’ve put together some clear steps to successfully ensure that your construction business is not one that is left for dust – pun intended!
Let’s dive in!
1. Know Your Market
You can’t become a successful construction company unless you have customers who will need your service.
If your local area is already overrun with companies doing the same thing as you, you’re going to struggle to get your business off the ground entirely.
Don’t make the mistake of starting a company without gathering information on every topic related to the business. Before you make plans to launch it, ensure you carry out research on your target market.
You have to know what the available construction company in your area offers. Study the market and find out what it takes to start.
2. Get a good location
Locate a good site for your company and discuss with the market around your site. Make your research and conclude on the site that is best for your company.
Make sure to locate your company in a public area to gain attraction. Take a walk around and note down the need of the people and their problems with the available construction companies.
This might also help you to pinpoint the weakness of your competitors.
3. Know your competition
You also need to know who the competition is. If you ignore this, you’ll struggle to get a foothold in the industry entirely and your dreams will crash before they fly.
Know your opponents, learn their tactics, and research their weaknesses and you will be on your way to being successful.
To survive in the construction industry, you have to be vigilant, be knowledgeable about everything that involves the industry and you are good to go.
4. Licenses & Permits
A big part of being in construction is having the right permits to do the job. You may need licenses to operate legally so apply for these early.
Many people would never entrust the building of their home or any infrastructural structure to a construction company without the required license. Clients need to be sure that they have the backing of the government to build whatever they want.
You don’t just need a license to attract customers, you need a license to gain the trust of the public as consumers tend to support government-approved companies. Having a license also protects you from a lawsuit against your company.
5. Get Insured
This business is a dangerous one, no matter how safely you work. To be honest, there are risks attached to construction companies.
According to OSHA, the most common construction accidents include falls, being struck by an object, or being caught in-between objects. That’s why the professionals at personalinjuryattorney-fresno.com, recommend staying in touch with a construction accident lawyer.
Due to the types of machinery and processes involved to get the work done, injuries and accidents usually occur. It would help if you got your company insured to do away with future problems. According to Mcclone, there are about 8 types of insurance that a construction company should register with.
General liability insurance should be taken more seriously. During the course of your job, you will encounter some damages which would be covered by general liability insurance.
You need top-notch construction site management skills to be really safe. Insurance isn’t just about you and your employees, but also those walking by your construction site!
The business owner’s liabilities are absolutely non-negotiable.
6. Get Funded
How are you planning to get this business of yours off the ground? You need money to finance it.
Whether you are using your own savings or pouring your own personal cash in, you need to speak to the bank to see what grants are open to you.
Get to know how to get it off the ground or other options you may have.
7. Know your customers
Understand your customer base and keep on top of your customers, their loyalty, and your reputation.
You need to aim to walk away from every client and project on the best possible terms. Finding out what customers need is key to being successful.
How do you treat your customers and curious passersby?
Some curious individuals will stop by your startup to enquire about your service. Sometimes, they ask questions with no intention to patronize you, however, the way you treat them is important as these individuals are great advertising tools.
The way you treat them will reflect in your business so if you are thinking of staying relevant in the construction industry, make a customer service unit available that will offer quality customer service.
Here are some tips for offering good customer service:-
- Be Sociable:- Be able to discuss with any individual that stops by your office. Let them know that you acknowledge and understand their worries. Have an answer to every one of their questions.
- Respond Quickly To Enquiries:- Don’t keep them waiting, be at their beck and call. You will be in charge of constructing something for them so you have to show how capable you are.
- Be Kind And Act Professionally:- No customer will give your company a second thought if they aren’t cared for. Act like you know what you are doing and be nice. This develops trust on the customer side.
Even after a transaction with a customer, reach out to them to know how comfortable they are using your service. Trust me, they’ll be back with a friend.
You can’t be successful when there is no customer. Your construction company can only be successful when there are customers.
8. Place Relevance On Consumer Feedback
It is only normal to make improvements when faults are pointed out. Try to admit it professionally! You can’t be a know-it-all. Sometimes you make mistakes and do not even know it.
You need to rely on consumer feedback for improvement. Never assume that consumers are satisfied with the service you offer. Try to reach out to them to find out where improvements can be made.
It is only when you listen to backlash you’ll be able to identify areas you are lagging. Don’t be afraid of negative comments. Accept them with good faith as they will help pave your way to perfection.
Finding your faults and working on them will set you above your competitors.
9. Make A Plan
Your business plan is going to get your business from A to B and back again so you need to ensure that you have a good understanding of the local market, your goals, and the likelihood of success.
Once you have gained a better understanding of what your target market is and what you have to offer them, it’s time to settle and outline your business plan because a business without a plan is headed for destruction.
A business plan guides your every step and prevents you from unnecessary block holds. If you are serious about creating a construction firm, don’t overlook the importance of a business plan. If you are having trouble making a plan, this is a guide on how to design a business plan
- Write the information about your company, what service you intend to offer, your budget, and your goals.
- Note the problems you think will be encountered and the present state of things in your company.
- Know your opponents and take note of their strengths. This will enable you to know how to build stability in the industry.
- Design the business structure you want. Here, you can make plans on the number of employees you will be employing and what their tasks will be.
Following these procedures will prevent you from encountering problems on your way to success.
10. Develop a niche to be unique
Choose a niche that differentiates you from the rest. Successful firms are successful because of what sets them apart from their competitors. If you want to gain a strong foothold in the construction industry, you have to focus on clients’ needs that haven’t been considered.
Concentrate on what you are very good at, improve it and create a unique style for yourself. You will gain a good amount of loyal clients. Humans are easily swayed by something new, so you should focus on new ideas that will make you stand out.
Learn to create new concepts every time to keep people coming back. Develop a niche that will keep you on the number one go-to list. Rather than becoming an option for those that need your services, create a niche!
You should also include the services that you intend to provide, and what jobs you’ll bid on.
11. Plan for advertisement
What do you think happens to be a firm that is not known? It closes down due to the absence of contracts. Do you want to be successful in this business? Then create awareness for your business!
People nowadays are likely to ignore your company even if your building structure is towering high to the sky. You have to draw their attention with social media to what they don’t know about your company which is why I earlier emphasized that you should create a niche to stand out.
It’s boring and tiring to hear about things already known, so market unique concepts about your company. When doing awareness, make your target audience know the importance of your service, what distinguishes you from the rest, and why they should patronize you.
You could also leave the job of marketing and advertising in the hands of professionals.
12. Employ leaders, not just workers
The mistake people make when starting a business is using more inexperienced labour because of the high cost of hiring expensive labour. If you want to make good progress, employ skilled labour who are smart.
You need to create a business environment where every employee is the best in their area of work. When this is done, you can be assured of great success as your company will always be at the top of its game. Fresh ideas will constantly pop out.
13. Pay Attention To Cash Flow
It’s okay that your priority is the construction of facilities, but you must pay attention to your cash flow.
In business, to succeed fewer needs to go out and more have to be taken in.
Profit can only be made when less money is spent and more is earned. Give attention to your cash flow, and master how to control it. If you can’t, outsource the task!
14. Join associations
Establish relationships with a network of friends in the construction industry. They are important for ideas and information sharing.
One of the ways to make friends who are heavily invested in the construction enterprise is by joining associations. You can’t be a loner in the construction industry.
To be able to get information, get a contract, exchange current market prices and work together, you’ve got to make the right friends. Your progress may even lie in your ability to associate or partner with your competitors.
15. Never Give Up
Everything above can only be attained when you decide to brace up and not give up.
Successful people are those who keep pushing. So, it doesn’t matter the industry you are in, if you make up your mind to keep fighting, success will be yours.
16. Plan to purchase your equipment or outsource
Starting a construction business can be challenging and rewarding, but one of the key factors to success is having the right equipment. Regular maintenance, repairs, and replacement parts are necessary for owning heavy equipment to ensure they run smoothly and efficiently.
You are just gaining a foothold in the construction industry, of course, you are understaffed!
Whether you are planning on starting big or small, you should be prepared to outsource some services and equipment. And if your plant & machinery is down, get it fixed immediately.
As a construction company owner, you have a lot to take care of. The job of accounting, content writing, marketing, procurement of materials/tools, and customer service shouldn’t be a task you should take on all at once.
As a newbie in the construction industry, you should outsource some services to an outsourcing firm rather than employing permanent staff.
They would take charge of your day-to-day office runs while you focus on your core services. Rather than worry about other things, you can focus on just construction.
17. Get Registered
If you have a plan, you can better understand why you need your business to be a legal entity.
Once you are registered, you can start to provide liability protection and tax benefits. It doesn’t take long to do this, but you’ll be hard-pressed to find work without it.
18. Automate your processes
Don’t forget that growth includes automating your processes and letting your software do the talking!
The introduction of technology has made work easier for industries including the construction industry. They are more efficient with fewer risks.
Modern construction concepts can be tackled and brought to life with technology.
Include your plans for good construction software, financial planning, and how you plan to hire. Join the train to embrace technology and succeed.
There it is – 18 tips on how to start your own construction company.
If you are not seriously invested in the idea of running your own construction company, the hassle in the process of setting up the business can discourage you.
Many go into the construction business because they feel it’s profitable because of the high demand for their service but eventually back out of the business due to their lack of foresight amongst other reasons.
So, before you take on this bold step, knowing some important things before starting any business would increase your chances as the construction industry is very competitive. Yes, it is not for the faint-hearted.
In order to survive in this industry, you need to have solid plans on the ground or you might end up on the losing side. To evade the calamity that befalls most who go into the construction business, you must take note of these tips as they’ll help you build that company you so desire.
The construction industry isn’t what an average person ventures into. However, if you have read to this point of the article, it means you aren’t average. You’re serious about setting up your own company.
Well, make use of these tips and be successful. Drop your thoughts in the comment section. 🙂