How to Start a Small Construction Business




Getting into the construction business and actually gaining a foothold is a daunting task. The sector is experiencing steady growth again, but there are a multitude of moving parts to grasp, from obtaining licenses and permits to purchasing major equipment and leasing office space.

You should fear not, though. Others have already been there and done that. Thanks to them, we have a roadmap and surefire steps that bring you closer to success. So, here is how to build a soaring business from the ground up. 


A game plan



A construction company business plan is the cornerstone of your endeavor. To flash it out, you need to conduct thorough research and obtain market facts and figures. One of the most crucial tasks in this stage is related to identifying your target market. 

In the light of your findings, figure out what type of company makes the most sense: a general contractor, highly specialized business, or something in between. The three main sectors are buildings, infrastructure and industrial.


Consider doing a SWOT analysis. Assess your skills and experience and select the field you feel confident going into. Once you pick your niche, take the big picture into account.

If you are planning to operate in the burgeoning and busy economy, such as one of Australian major cities, you need to carefully scope out the competition. As a small business, you do not want to be up against a bunch of direct competitors in the form of established corporations and startups.


Money matters

Next, determine how you are going to finance the company. As you probably know, capital demands in the construction industry are pretty intense. Therefore, it is a good idea to calculate the total costs of launching and running a business.

Take your time to see how much space you really need for personnel, equipment and meetings. See if it is better to rent or buy mainstays of operations like heavy equipment, materials, tools and vehicles.


To keep spending in check, shop around wisely and buy materials in bulk. Moreover, your business plan should make a strong case for your business to get funding.

In other words, it needs to outline your assets, present a realistic financial picture, and designate desired investment sources. Ponder various options, including small business loans, private interests and alternative sources of financing. They all have their pros and cons you would be wise to weigh.


Covering all the bases


Furthermore, establish connections in the local business ecosystem. This should enable you to have access to best deals around and capitalize on fruitful business relationships. So, you need to know what kind of subcontractors you will cooperate with.


Most entrepreneurs should keep an eye on utility system construction, finishing contractors and structural construction providers. For instance, you should know at all times how to contact a trusted Sydney electrician if you’re working on a project in that city. Finally, note that you are working in a highly-regulated industry, albeit specifics vary from state to state.


Hence, you have to meet various legal, trade and regulatory requirements to operate within the boundaries of the law. Get familiar with building codes, licensing processes, relevant laws, occupational safety and health rules, insurance, requirements, etc. Like it or not, you must show due diligence, at least if you mean to stay on the safe side and avoid business-shattering financial shocks.


Building it block by block


The construction industry always has demand and where demand is, there is also a lucrative opportunity. To maximize your chances of making it big, however, you cannot drift aimlessly. Work out a sound business plan. Carry out market research and gauge the level of competition.


Devise the most prudent course of action and set your strategy into motion. Decide on the niche of your business and tap into suitable sources of funding. Lay the groundwork for long-term success and you will gain and have a head start in the immensely competitive arena.

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