There are several steps involved in starting a construction company. First, decide on the type of entity you want to be. A corporation or a limited liability company offers limited liability protection, which is especially important for construction companies. Furthermore, an LLC has the advantage of allowing the company to choose between taxing as a partnership or a corporation, according to IRS rules. After choosing the type of entity, you must also decide on a name and choose a business structure.
Depending on the state and municipality in which you want to work, there may be additional requirements when starting a construction business. A business attorney can help you streamline the process and ensure compliance. When registering your business, you will also need to locate your headquarters, where you will house employees and equipment. Your headquarters will need office space, warehouse space, and property where you can store equipment.
Despite the challenges associated with starting a construction company, it can be a rewarding venture for people who love the industry. Not only will you be able to pursue your passion, but you’ll be able to earn a decent living. Nevertheless, it’s important to be ready for the challenges ahead. Statistics show that 63% of new construction businesses fail within five years of establishment.
Creating a business plan is essential when you’re starting a construction company. You’ll need to determine what resources you need and how much capital you need to get those resources. In addition, you need to figure out what differentiates you from your competitors. The business plan can also help you identify how to market your business and how to make money. A business plan should be as detailed as possible and should include details about your intellectual property, marketing, and sales strategies.
Once you’ve determined the type of construction work you’ll do, you’ll need to purchase the right construction equipment. These tools include trucks and other heavy equipment. Also, you’ll need to hire a bookkeeper and purchase construction industry accounting software. You’ll also need to build a website, which is your ticket to Google.
Choosing your geographic location is crucial. Consider smaller towns that have less growth and less people. This way, you can provide a more personalized service to your customers and stand out from your competitors. You can also choose to specialize in a particular area, such as new construction or green construction. Consider the needs of your local customers, and then choose from among the many different options available.
Another crucial step in starting a construction company is getting the necessary financing. It is important to have some funding to cover the initial expenses of starting up the company, such as insurance, business licenses, and equipment.