Working as a contractor has many benefits – it pays well than the same salaried job. The predicted growth of the construction industry has made many people consider starting a contracting business. If you’re interested in getting started, here are some considerations you should think about before starting your construction business.
1. Mentoring and expertise
Don’t start a contracting business blindly. There are many resources you will need as a contractor and a business owner. Mentoring is the best way to learn all the ins and outs of any business. Look for a mentor in your local area and spend some time working with him or her. Enroll in a local business class and then develop a business plan.
2. Do your research
There are so many online tools you can use to learn more about running a construction business. Take time to browse blogs, software programs, and general advice. Learn more about software programs that will help you manage your business.
3. Get financing
You need capital to start your business. There are many credit unions and banks offering bank loans at low interest. Look for the best financing option for you. Local Small Business Administration is the best option for a construction business.
4. Name and register your business
Decide on the best name for your business and then register it. The business name should be unique. For better business, use a name that is related to the service your company will be offering.
Before opening the doors of your company, you need to obtain licenses and permits. A general business license and other specific licenses are required to protect your company and your clients. If you are doing plumbing and electrical work, you need a tradesman license. It is illegal to run an unregistered construction company.
5. Insure your business
Look for an insurance company offering a contractor’s insurance plan. Purchase the plan that includes property, general liability, and vehicle insurance. Make sure to adhere to all the legal requirements when it comes to obtaining insurance coverage.
6. Arrange surety bonds
A surety bond is a third party guarantee that pays customers when your company is unable to fulfill all the work obligations stated in your contract. Regulations for surety bonds vary from state to state. Look at your state’s surety bond requirements or talk to a surety bond agent near you.
7. Develop an OSHA plan
The Occupational Safety and Health Act requires all workers employed in a construction company to work in a safe environment. The construction industry has many hazards. It is your role as a business owner to provide your employees with appropriate clothing, footwear, and helmets.
8. Build a workforce
You’re going to hire employees for your company no matter how small it seems. If you are planning to take large or medium-sized projects, you will need to hire a considerable number of employees. Use accounting software such as Zoho and Freshbooks to simplify the bookkeeping chores.
To be on the safe side, research for regulations in both state and federal hiring practices in your state.