How to Start a Construction Business

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Image of a man working on a new roof

Construction Business Overview:

Construction is a thriving business in a lot of areas. There are many different aspects of the construction industry. Let’s take a look at what you need to know to start.

The startup costs can be a challenge. For the startup phase, you may want to consider, a small operation and buy used equipment.

Build as you go. You can’t build a building in one day, and you can’t build a strong company in one day either. It is going to take determination, and time to build a good reputation and to become successful.

Skill Set:
  • Handle the necessary machinery and equipment adequately
  • Skilled and knowledgeable about all types of tools
  • Calculate estimates
  • Knowledge of remodeling trades and residential construction techniques, procedures, tools, equipment, safety, and materials
  • Proficiency in trim work, drilling and setting hardware for doors and windows, setting windows, stair layouts, etc.
  • Ability to read blueprints
  • Ability to manage paperwork such as employee time sheets
  • Ability to perform physically demanding tasks such as crawling for long distances and climbing extended ladders
  • Understand architectural design and building concepts
  • Excellent Math skills are a plus
  • List of Common Business Skills
Employee & Job Consideration During The Start-Up Phase Or In The Future:
Approximate Daily Hours Needed:

Generally regular business hours and possibly some weekends depending on deadlines.

Equipment, Supplies, & Services During Start-up OR In The Future:
  • Head, eye, and ear protection, Steel Toe Shoes
  • Hand saws
  • Planes
  • Framing mallet
  • Circular saw
  • Table saw
  • Compound Mitre Saw
  • Cement mixer
  • Cordless drill with assorted bits
  • Work truck/Van with ladder rack and utility box
  • Composting containers
  • Heavy construction equipment is needed. e.g. bulldozer, excavator, backhoe, dump truck, etc.
  • A variety of hand tools including:
    • Hammer
    • Sledgehammer
    • Speed Square
    • Chalk Line
    • Chalk Line Clamp
    • Chisel, Carpenter’s Pencil
    • Framing Square
    • Utility Knife
    • Framing Hammer
    • Cat’s Paw
    • screwdrivers
    • measuring tape
    • Level, Grease pencil
    • Nails, screws and other fasteners
    • Tool belt
    • etc.
  • List of Essential office Equipment
Monthly Expenses To Consider:
Licenses:
Approximate Minimum Startup Cost:

Bare essential – The majority of your startup cost will be the equipment you need, as well as the building you work out of unless you choose to work from home. When you first start out, large pieces of equipment such as excavators, dump trucks, and bucket loaders are very expensive. For instance, a Caterpillar backhoe can cost as much as $97,000 new. Buying used cuts costs by a lot. A used one can cost about $30,000-$50,000.

Tips & Considerations:
  • You must have adequate insurance. This protects your business if any property gets damaged or accidents occur.
  • It’s best to specialize in some field of construction, e.g. offices, homes, remodeling, foundations and basements, Highrise, etc.
  • You can outsource jobs you don’t specialize in, you can build a network of contractors and make a profit on the work you outsource.
  • Another option is to rent equipment. This may put you at a disadvantage when bidding on a job because companies that own their own equipment will be able to offer a lower price.
Pros and Cons:

The Pros:

  • Potentially high profits
  • There are many areas in which you can specialize in the construction industry
  • High demand

The Cons:

  • High start-up costs
  • Construction market can be unstable
  • Competition for jobs
  • Potential for dangerous work conditions

Resources:

Associations

Associated Builders and Contractors (ABC) http://www.abc.org/

Associated General Contractors (AGC) http://www.agc.org/

Books:

Amazon Book Listings – Construction