Guide to Starting a Construction Company

Construction companies never go out of style. As old buildings fall into disrepair, construction companies are busy repairing or remodeling them. When the buildings no longer offer a substantial benefit, a new building replaces it.

When you’re thinking about starting a construction company, whether you will be a general contractor or specialize in a trade, there are things you must know in order to be successful. Among them are:

1. Finding start-up financing.
2. Choosing a construction management plan.
3. Locating construction leads and jobs.

Action Steps
The best contacts and resources to help you get it done

Obtain the capital you need for your start-up costs of construction services

Obtaining financing to start your construction company can come from private investors or a bank. Your financial needs will vary depending upon the amount of capital you have to invest and the proposed scope of your construction company. Many makers of construction equipment offer financing terms to builders and contractors. Your credit history is important as well as your equity in the new company when applying for financing. In addition, consider leasing construction equipment to reduce start-up costs, leaving extra capital for project investment.

I recommend: Use construction software to draw up a business plan when showing your ideas to potential investors or lenders. Check out the GoBIGnetwork for information on venture capital firms or register (for a fee) at Capital Vector and let the experts match you with an investor.

Stay on track with a comprehensive construction management plan

Goal setting, budgeting, planning and record keeping is just as important as the time you spend on the jobsite. Thanks to user-friendly software management programs and construction management companies, you can concentrate on the project and turn the paperwork over to the office crew. If your construction company plans are extensive, consider forming a corporation and appointing a board of directors to oversee the administrative duties.

I recommend: Check out the Constructon Management Association of America (CMAA) to find a good construction manager to oversee the daily activities, both on the jobsite and in the office or train a construction manager from within your own company. Purchase construction management software if your company is small. Form a Delaware Corporation online and sign up for extended customer support.

Get the construction services jobs you want

Finding plenty of work for your crew means tracking down leads and bidding on numerous jobs. You won't get them all but you will get some if your estimating process is accurate and you're charging rates competitive with other construction companies in your area.

I recommend: Look for jobs to bid on nationwide if you live in or near, a large community. BidClerk locates residential and commercial construction jobs up for bids. Research state newspapers from around the nation to find jobs in your desired location.

Tips & Tactics
Helpful advice for making the most of this Guide

• Visit with an accountant when you decide to go into the construction business to determine quarterly payments for taxes and to purchase worker's compensation insurance for your employees.

The official source of Starting a Construction Company is the Construction page at Business.com