In this article, you will learn the basics of what you need to start your own construction company. The first thing that you’ll need is a business plan. This should include details about the type of work your company does, how much it costs for each job, and other information like location. Next, you’ll want to get all the permits and licenses required by law before opening. Finally, if any employees or subcontractors are involved in your company’s work, they will also have to be properly licensed with their appropriate professional organization. Get started today.
A thorough business plan is necessary when starting your own construction company. This plan will include the details about the type of work your company does, how much it costs for each job, and other information like location.
Your business plan should also include the budget for any equipment you’ll need, whether hand tools or heavy construction equipment. The details about how much money you have available, to begin with, will also be included in this section.
Permits and licenses
A lot goes into starting your own construction company, so depending on what type of business you have, there will be different permits and licenses that you’ll need to get before opening up shop. Suppose you want to stake a claim in residential construction. You’ll have to get state and local permits to start. However, it’s wise to work with different home-building companies first to understand how this field in the industry works.
In general, it’s important to note that every state will have different rules and regulations for construction companies, so make sure you know what they are. This is especially true if you want to also start in commercial construction. Also, consider any federal guidelines for your industry when getting permits and licenses.
Here’s a quick list of licenses and permits you’ll need:
- Business license: Issued by your state, this license allows you to operate a business.
- Building permit: Necessary for any construction project, big or small.
- Taxpayer ID number: You’ll need this when you file taxes.
- Mechanic’s lien: Protects subcontractors if they haven’t been paid for their work.
- State contractor’s license: Mandatory in most states, this license proves that you’re qualified to do the type of construction work you’re advertising.
- Workers’ compensation insurance: Protects employees if they’re injured on the job.
- Local permits and licenses, as required by municipality: This can include permits to place commercial signs, the right to have a dumpster in the parking lot, and more.
Employees or subcontractors
Because of the nature of the construction business, your company will most likely have to hire employees or subcontractors from time to time to get all the work done that you need. You’ll need licenses for both of these groups depending on their roles in the company. For example, if your company hires plumbers, you’ll also need specific plumbing contractor’s licenses.
This also goes for subcontractors. If you’re hiring a company to do all the excavation work for your construction project, then you’ll need to make sure that their excavation contractor’s license is up to date. Make sure that you take the time to research the correct licenses and permits all your employees or subcontractors need for your type of construction business. It will save you a lot of time and hassle in the long run.
Basic equipment you’ll need
Equipment can be a considerable investment. Whether you’re starting a construction company with hand tools or heavy equipment, make sure to budget for it in your business plan.
If you’re starting small, you can probably get away with just a few hand tools. However, if you want to do bigger projects, you’ll need more specialized equipment. For example, if you’re going to be doing concrete work, it would be a good idea to purchase a concrete saw and forms so that you can pour the concrete yourself.
Here’s a list of some basic hand tools you’ll need to begin with:
- Sharpening stone
- Pry bar
- Hand truck or wheelbarrow
- Power tools like a drill or compressor
If you’re starting a construction company that involves heavy equipment, then you’ll want to make sure that you have the financing in place to purchase it. You should also research the different types of heavy equipment available and what will work best for your type of business. Here’s a list of some basic heavy equipment you’ll need to begin with:
- Backhoe loaders and skid-steer loaders
- Wheel loaders and hauling trucks
- Concrete saws
- Cutting torches
- Crane trucks and draglines
- Material handlers
- Cranes and aerial lifts
Establishing your construction company can be a rewarding experience, but it’s also important to be prepared. Make sure you have the right licenses and permits for your industry. You’ll want to plan out all of your business information in a business plan before opening shop, as well as research which equipment you’ll need so that you’re ready for any job. With the right preparation, you’ll be well on your way to a successful construction company.