Construction is among the top industries growing the economy. But like other businesses, it has a high failure rate, with more than 64% of construction companies closing in the first four years. Your construction business doesn’t have to be on this list.
Researching the market, writing a solid plan, and getting help to ensure your construction business starts on the right foot. However, these strategies won’t be enough. You will also need to consider the following pro tips:
1. Decide on the Specialty
One of the first steps for starting a construction business is to decide on the specialty. This will depend on your goals and experience. Subcontractors make around 25% of profit margins but get small contracts. As for general contractors, they make 12% profit but get bigger projects as they manage more than 15 separate trades.
There are advantages and disadvantages to both. However, you will need to consider several factors before determining what you specialize in, including experience, profitability, demands in your area, and how quickly you may land your first project.
2. Prioritize Offering Quality Customer Service
When employing workers, it would be best to know whether they have the required contracting skills. But almost as important is to ensure they can use solutions, like field service management software, to offer the best customer service.
Your customers will always remember the work done for them and how they go treated. Putting together a team who may give your customers patience, understanding, and respect will surely go a long way toward getting repeat business and referrals.
3. Pick a Business Name
Determining and choosing the name of your construction company is important when starting a venture. Basically, potential customers need to see the business name and have an idea of what services you provide, even though this is not always the only option.
Some contractors who are known as leading professionals in the industry might wish to work under their name. And others can take a traditional approach of naming their business with a company name.
Always choose a professional name representing the services your construction business offers in the market. To know whether the name you have in mind has been used, search online for similarly named businesses.
4. Get Licensed and Registered
Confirm with your local and state government for rules governing small construction businesses. They may tell you whether or not you need bonding so that you can offer construction services. They can also help you apply for a business license, pay fees for a certification/license, and register the business name.
Apply also for EIN (Employer Identification Number) from the IRS. Reach out to a bonding body to apply for a bond. Your city or state government can list reliable bonding bodies you may contact for your needs.
Your main goal must focus on streamlining processes from the start. Regardless of how easy your first project is, take it as a test run to ensure everything flows as it should, from invoicing to writing quotes.