Starting a new business of any kind is never a walk in the park. While you may have the idea visualized and even put-up measures to ensure it is up and running, the process of actualizing a construction business idea is not simple.
The construction industry ranks highly among the most essential sectors. While there may be thousands of established construction companies, this should not limit you if you want to start one. However, you must be willing to set your foot forward, embrace new tools and trends and provide the best services to your clients.
Do you think you are ready to launch your construction business? Here are 7 tips for starting and running a construction business
Layout your construction business structure
If you think a start-up does not need a clear business structure, you are mistaken. Right from the start, you need to determine whether your construction business is a sole trader, partnership or a limited company. This helps your layout regulatory needs such as taxation, liabilities and costs that will be involved. You will also need to classify your company on the construction business types such as general contractors, small renovation contractors and owner-builder. It also wouldn’t hurt to have a general idea on how your business will function. For example, will you hire an in-house estimator or an estimating service? These are the kinds of questions you should ask beforehand.
Licenses and permits
Before pursuing the construction business, ensure you have all relevant licenses, permits as well as other legal requirements. These needs will depend on the size of the construction business, the type of construction company and the business location. Operating without the right legal requirements could see you paying hefty fines, tax penalties and even possible business closure. Not worth the risk!
Do not downplay the importance of marketing
Whether you decide to put up a simple signage, hire a few marketing employees or even advertise via online platforms, an effective marketing strategy can put your business years ahead. To start with, ensure you have a business portfolio, business logo and business cards. And with the world depending on online platforms for almost all services and products, ensure you have an online presence. You can opt for a functional website as well as other platforms such as Instagram and Facebook. Whichever marketing method you opt for, do not forget to provide the best services. Customer referrals is the most effective marketing method in the construction industry.
While you are new in the construction business with few or even no clients, you must network with suppliers, contractors, and even other business associates. Forget competition. You cannot survive in the construction business alone. Your relationship with contractors will be useful when you need to call on more people to finish a project. You will also need help in sourcing raw materials, expensive surveying gear like a trimble total station, getting your construction workforce, and even other service providers such as accounting and marketing. Also, to ensure you have an excellent work relationship with several suppliers. Establish credit by opening accounts with them and regularly sourcing from them.
To contract employees or hire?
This decision is very important in a business start-up in the construction industry. The decision to hire or contract employees directly affects the amount of capital you will need to start your business not to mention efficiency. If you opt to work with contractors, you will need less capital and incur fewer operating costs since you get to call them in only when you have running contracts. However, consider having a few full-time employees to help keep things running and maintain some familiarity in the business.
Consider a cloud-based workforce management
Without effective cloud-based workforce management, it can be difficult to coordinate work and people especially, when starting a construction business. A cloud-based workforce management tool ensures the entire workforce is aligned to their tasks, ensuring productivity.
By having a cloud-based workforce management system, your business will benefit by:
- Workforce management scheduling- You will get different construction projects from complex to simple ones. Since different projects require different skills, a cloud-based workforce management tool enables you to select the right personnel for a specific job. This could be based on the level of their experience, certificates, project timelines and even client preferences.
- Accurate forecasting- You must be able to plan to thrive in the construction industry. A cloud-based workforce management system will help you plan in terms of capital, workforce and even equipment needs. It also allows you to evaluate risks and pursue opportunities strategically.
- Employee satisfaction- When employees have the tools and information needed to perform their duties, the productivity not only goes a notch higher but they are also happy. This, in turn, leads to client satisfaction hence more contracts!
- Workforce optimization- An overworked or underworked employee is not a happy worker. Cloud-based workforce management tools help construction businesses optimize the employee workloads which in turn ensures every project has the required labour needs.
While you will be presented with many cloud-based workforce management tools, ensure that you pick the one most suitable for your business. Here are some factors to consider when choosing a workforce tool.
- The ability to integrate functionality needs and features – Since you will be more reliant on the technology aspect of your construction business, the suitable workforce management tool should easily integrate with other functions. For instance, Bridgit Solutions allows you to allocate data via mobile applications and even web-based platforms. Check out this comparison between Bridgit Bench and Smartsheet if you are interested in obtaining a software for managing your resources on the jobsite.
- Cloud-based data storage capabilities- Cloud-based data solutions ensure secure storage of data not forgetting easy retrieval.
- Possibility for customization- Your workforce management tool should be easy to customize based on the complexity of a project, the size of a business, regulatory needs and existing capabilities. You should be able to customize key components of the construction business.
- Efficiency- An inefficient cloud-based workforce management tool is not only unreliable but can lead to the loss of funds. Consider a system that reduces the money and time spent on administrative tasks. This will help you to concentrate more on running the construction projects and hunting for more!
Quality is king!
Once you have your construction business up and running, remember to provide the best services. Never sacrifice quality to save on time, raw materials or other costs. While shortcuts may get you easy money in the short-run, they will be expensive in the long run. While you do not have to cave into every client’s demand, communicate on all aspects of the project. Providing good services ensures great referrals and repeat businesses.
Interesting Related Article: “Benefits of Using Software and Digital Tools in the Construction Industry“