Today, there are more than 32.5 million businesses in the United States. Knowing this and being on a budget, you might wonder how you can even start your own.
While it might seem frustrating to begin with, it doesn’t have to be. Read this guide on how to start a construction firm on a budget today!
Research the Local Market
Before you buy tools such as costcertified.com and open up shop, you’ll want to ensure that a construction firm will be a success where you are. If customers are happy in your area and it’s oversaturated, it might not be the right choice.
See how much they charge in the construction industry, what they specialize in, and how many are already operating in your area. Find out what their reputation is as well.
Check the SBA (U.S. Small Business Administration). You can see the various customer and business markets in the area. It’ll also tell you the spending habits, employment status, and more about the location.
Use Google as well. Type in your city’s name along with the construction industry publications in your search.
Create a Small Business Owner Plan
Before you begin business ownership, you’ll need to come up with a plan. This should include your budget, what you need to buy now and later, marketing tools, etc.
Decide whether or not you’ll need a loan. Consider researching plans with specific templates if you’re not sure where to begin.
Register Your Business
You can register your business online in many places. Check the registration, licensing, and insurance requirements.
Your town or county might have specific requirements. Be sure to check the laws before you begin.
Decide on a corporation, LLC, C Corporation, or S-Corp. You’ll need to get an EIN (employer identification number).
An EIN will let you open a bank account, hire employees, pay taxes, and apply for business licenses. Some states will require you to register online with state agencies.
Consider Loans
Consider SBA loans and low-interest options. You’ll want to consider other loans since SBA loans are hard to qualify for.
You’ll need a great credit score, and they’re worth it if you get approved. There are SBA microloans, CDC/504, and 7a loan programs.
You might qualify for working capital loans. These can include office utilities and payroll. Highly seasonal industries tend to use working capital loans.
Secure Insurance
Once everything is set up, you’ll want permits and licenses to protect your business. Along with this, you’ll want insurance.
This will protect you in case there’s an injury on the job. Many states will require you to have workers’ compensation insurance.
You might need professional liability insurance, general liability insurance, and auto insurance. Builder’s risk insurance might be a requirement as well.
Vehicle Insurance
As a construction business, you’ll own some heavy machinery and need vehicle insurance. If you rent equipment, you’ll need to have a waiver that’ll reduce your liability for damage.
State Disability Insurance
If a worker is injured on the job and can’t work for an extended period of time, state disability insurance could help. They’ll be able to file a state disability claim for financial assistance.
Workers Compensation Insurance
While general liability insurance will cover some of the accidents, it won’t cover all. For long-term injuries or lost wages, workers comp could help.
Unemployment Insurance
When an employee loses a job for reasons that aren’t their fault, they’ll receive this. They’ll receive monetary assistance until they can find another position.
Surety Bonds
Most areas will require you to have surety bonds. A third party will pay your client if you don’t complete the work obligations under the contract.
They vary from state to state. Consider speaking with a surety bond agent.
SBA has a Surety Bond Guarantee Program that you might qualify for. This is if you can’t receive a surety bond through a commercial channel.
Business Structure
The business structure will include the organizational layout, the number of current employees, the division of shares among investors, and who owns the company. You need to ensure that it makes financial sense before you begin.
Market Your Business
Let your friends and family know about your new business and ask them to spread the word. Find out if you can place information about your business in other locales.
Consider online marketing. You can open up a Facebook, Instagram, YouTube channel, and others for free.
Consider ads and set a daily budget. Social media accounts such as Facebook will allow you to pick out certain interests for your ideal audience and demographics. Only spend what you’re comfortable with, and don’t go over that amount.
Consider Mentoring
If it’s your first business, consider having a mentor. There are different small business assistance programs that you can check out.
Look into the small business development center or a SCORE Mentor. There might be construction mentors at no cost. Check out the Veterans Business Outreach Center if you’re a veteran.
Finding Employees
Look into independent contractors, labor brokers, subcontractors, and others for employees. Be mindful of the taxes and laws when hiring contractors and employees.
Starting Your Own Construction Firm on a Budget
After exploring this guide, you should have a better idea of what to expect when beginning a construction firm. Take your time speaking with mentors who have done it before.
Would you like to read more informative content? Be sure to check out our other articles today!
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