Starting your own construction business can be an exciting one, nonetheless it is an arduous journey with many loopholes one may find themselves jumping through in order to get their journey. Thankfully, this article aims to provide you with ten tips to set you on the right path and give you the best chances for success. So, here are the top 10 tips to running a successful construction business.
- Start small
The first tip in running a successful construction business is not going too big too soon even if you are able to. Starting small is always the best option. Most individuals starting a construction company will have to start small either way, however this is a benefit in and of itself. Starting small gives you the benefit of starting with one project a year for example and as you grow in number of projects and employees, so is your skill level and your standing within the industry.
Obviously as one begins their journey in starting their construction business it is not required that they are expert in sales skills for instance even though some sales skills are required. You will grow with the business as you take on more projects and your business will benefit and become better.
- Utilise technology
An underrated tip to help you really succeed in your business is to utilise technology from the start. The construction industry itself lags far behind other industries in the adoption of technology. Despite this there are fantastic softwares out there aimed to help you grow your business and maintain that growth, specifically construction management softwares.
Construction management softwares can help aid your growth by helping you to manage your construction projects by streamlining a lot of the processes involved in the project making it smoother for yourself and any employees.
For instance, softwares can include estimation tools, scheduling tools, takeoff software, CRMs, data storage(tasks, documents, supplier and subcontractor price lists) and a whole lot more.
A lot of builders may utilise their own tried and tested techniques such as using a spreadsheet for construction estimation. However, new softwares out there will save you time and expensive mistakes that can occur due to human prone errors. Investing in such a software will save you a lot in the long run.
- Investigate the market
Before delving straight into starting your construction company you must know if there is even an existing market for it. There might not be and hence you will be left there sitting and wondering why you are getting no business. You must investigate if there even is a need for another construction company.
Another important thing to note, is if there is a market is it wise to enter, looking at the market and seeing how people are currently being served and by who. Are there a few large companies adequately serving people’s needs or is the market saturated and it would be too difficult to distinguish yourself from your competitors? Make sure to take all this into account before starting a company as you might not receive the results you were hoping for.
- Have a business plan
Once you’ve found your entry into the market, and you are sure you want to go ahead, make sure you have a good business plan that will get you started and enable you to forge a plan ahead as this is a crucial step in starting your journey in building your construction business.
- Previous experience
You want to make sure you know what you’re doing when you start a construction company in regards to the construction process. Previous experience in the construction industry is crucial in having a solid foundation to understand the ins and outs of working in construction which help in your business. Finding ways to gain apprenticeships and having on site experience can go a long way to help you understand how a construction project works. Of course you would likely need to also attain some certifications to facilitate this, which is going to be covered in the next tip!
- Undertake certification
You can undertake certification in construction by completing the relevant courses in accordance with The Australian qualifications framework or AQF for short. The Certificate IV in Building and Construction is a perfect entry point for total beginners who don’t know anything about the construction industry and can provide a great base of knowledge. From here you can continue onto the Diploma in Building and Construction. These are both levels in the AQF at levels 4 and 5 for the Certificate IV and Diploma respectively.
Someone who has some previous experience in earlier certification levels such as 1-3 and has a bit of hands-on experience through being a trainee or apprentice can jump straight to the diploma. It is highly recommended to complete these courses however.
These courses will teach you a variety of things and give you a comprehensive understanding across different areas of construction such as applying principles of OHS risk management, controlling project quality and risk and applying building codes and standards to construction processes and more. The idea is you are more prepared with different aspects of running your own construction company such as skills to look for in any hires, how to plan the scope and budget for a project and so on.
- Have basic maths and accounting skills
It is crucial for you to have some skills in mathematics at atleast a basic level. This is to help you run some of the financial aspects of the business as it is most likely you will be on your own in the start so you will be doing most of the work in various areas across your business including this, so it is important you can handle it.
Even if someone else were to help you with the financials and accounting it is important you also have some basic knowledge in accounting so you can be on top of everything. Knowing the financial state of your business and catching things at the right time is extremely important.
You are essentially solely responsible for the money coming in and out of your business. If managed poorly you can be out of a business. It is worth talking to an accountant to help you manage things, however you can always be self taught in basic accounting while utilising third party softwares such as Xerox. If you have decided to utilise a top notch construction management software to help run your business, it should be able to integrate with these accounting tools and extract data from your construction projects such as timesheets, purchase orders and other financial transactions.
- Develop your communication skills
Aim to develop your communication skills, this also tantamount to your businesses success as how you interact with everyone inside and outside your business can help deliver better outcomes for yourself and your business. Being an excellent communicator with different types of employees and knowing how to change your communication style depending on who you are talking to is important. This means there is a demand for you to have a level of competency in your interpersonal skills.
- Figure out early how you want to structure your business
An important tip is to figure out how you want to structure your business ahead of time. We will look at four ways you can structure your business. The first one to look at is sole proprietorship, this simply means that you are the singular owner of the company and the main decision maker, everyone else is an employee of some sort.
Other options include a limited liability company which is a private company that has several owners. Each of these owners have a stake depending on the capital invested in the business. In this instance the business is a private one.
As opposed to having a private company, you can also have it set up as a public company. This means that shares of the business can be bought by the public, not just those you choose to sell to. The money gained from the buying of shares can be utilised for the benefit of the company.
Lastly, you can set up a trust. This is one way to set up your business where an appointed trustee will be the one who will manage the assets inside the trust. Those assets can be utilised to the benefit of the company. Regardless of which option you choose you should seek the help of a professional to determine what the best structure for your business is.
- Attain the required licences
Running your construction company is one thing, starting it can be easy with the exception of obtaining licences, the required ones. This ensures you are certified and qualified to do what you are doing. You will need to obtain the necessary licences such as the individual contractors licence before you start any residential/commercial work as well as a company contractor’s licence which is required for making contracts and subcontracts with others. These are just a few licences mentioned, but as you can see they are important. To find out more about licences and which ones you need you can find that information here.
Finally, you can now start building projects for clients, all you need are employees and staff to help you in any matters you deem necessary so you should be drafting appropriate job requirements to start hiring staff for your company. You will also want others to know about you so increasing your presence and letting others know they can find you and your services through marketing will help greatly. Establish your brand and market it, utilising digital marketing as well as having a fantastic website that encompasses and details what your service is all about and what you offer will help to.
If you are looking for a good construction software that makes use of good project management functionality, estimate and financial/accounting tool functionality, job management, scheduling and planning and support functionalities and more. WunderBuild is a construction management software that aims to provide all of these functionalities and more to bring out the best outcomes for a project.
It is currently offering a free trial, visit here to try WunderBuild for free.