The construction industry is almost always profitable, but nowadays it’s once again at a peak, with the demand for residential and commercial buildings continuously growing.
This makes opening a general contracting business a great opportunity. Preparing a business plan and executing the whole process, however, is a huge challenge.
If you are considering starting your own general contracting business, we’ve put together this comprehensive guide to walk you through the process.
1. Determine Your Place on the Market
You can choose according to your skills, conduct industry analysis, and find what’s in high demand, start big or small – it depends on your abilities, possibilities, and goals.
2. Register Your Company
Some aspects of starting a business, like choosing a name, creating a logo, imagining future successes, are exciting for anyone. But it requires hard work.
Probably the most challenging and horrifying part of the process is dealing with all the paperwork, learning the federal and state rules and regulations, and getting the necessary permits and licenses.
The best way to ensure that everything is in order and done properly is to get help and find reliable experts for these crucial but tedious steps of the process.
3. Protect Your Investment
Opening a business, even in such a lucrative industry, may entail different kinds of risks. This is why you should protect your assets from the get-go and find the right insurance for general contractors.
You can find a suitable insurance package depending on how you want to run your business, whether you decide to hire employees, the equipment you need, the size of the company, and so on.
You must make sure that your business, your employees, your properties, and you are protected from a variety of possible risks.
Your insurance for general contractors may include coverage for legal costs, property, vehicle or equipment damages, stolen tools, lost wages, medical expenses, health insurance, disability insurance.
You should also learn whether your state requires businesses to carry specific insurance and what those are and make sure you include them in your package. For instance, providing workers’ compensation is often required by law.
4. Track Your Expenses
Once you have everything in place, you need to set your prices. You need to offer competitive prices but you need a steady cash flow and, most importantly, make a profit.
To be able to do this, you must have a detailed insight into your finances and develop a financial plan. Knowing all your initial and ongoing expenses, including costs for vehicles, equipment, materials, salaries, and so on, will help you determine the prices you can offer.
5. Find and Keep the Right Workers
Outsourcing and subcontracting is common practice in the construction industry, and it can be a great solution for you. However, if you decide to have employees instead, you should make sure that you are a respectful and fair employer.
This will help you create an efficient team of loyal employees, and keep the good workers in your company. To achieve this, offer competitive salaries, good health insurance, benefits, flexibility, and reward workers for their hard work and loyalty.
Nowadays it’s impossible to run a successful business, regardless of the field, the size of the company, or whether they offer services or products to individuals or other businesses, without a professional and informative online presence, which sets the brand apart.
A crucial element in starting a general contracting business is to ensure that relevant individuals and businesses learn about your company’s existence.
To have a truly fruitful marketing strategy that will generate leads and clients, you need two main things: search engine and social media ads, and an engaging and informative website and social media profiles.
Your website should be as easy-to-navigate as possible and contain all the important information about your brand and your services. In other words, you need a perfect combination of targeted ads and valuable content.
A good online marketing strategy can help you get clients and retain them. You can do this in several steps:
- Identify your target audience;
- Use targeted advertising to reach them;
- Take advantage of other technological advancements (like AI);
- Provide superior experience for your website visitors;
- Offer content that’s valuable to them;
- Share it on social media;
- Use social media to develop a meaningful relationship with prospects;
- Optimize online presence by tracking social media results.
This guide should help you understand how to start a general contracting business, from registering and getting insured to finding clients and projects. Starting such a business is a big investment with possible risks, and takes time and effort.
However, with a good business plan and the right people, it can be very beneficial and worthwhile.