Starting your own construction company can be a profitable venture under the right circumstances, but it also involves a lot of risk. If you have experience in construction and want to start your own company, be sure to research the necessary business requirements and laws before launching your business. Here are some key areas to consider:
Know the technical details of construction.
Usually this requires at least five years of a broad range of construction experience.
Know your numbers.
You need to have a firm handle on your costs and profitability at all times. This requires that you have an excellent accounting system designed specifically for construction, and that you understand and are comfortable using it.
Keep up with technology.
There are now mobile apps that can be used on the jobsite to improve your project management, scheduling, job costing and more.
Develop standardized procedures and checklists for quality control.
Standard operating procedures (SOPs) are written instructions that explain the work steps you use to carry out your construction quality methods and policies. A general guideline is to keep the procedure as simple as possible, but not so simple that the lack of details could adversely affect quality.
Watch your stuff.
Construction theft directly impacts your bottom line. There are simple methods to take to reduce this theft, including low-cost remote cameras, inventory control, and marking equipment.
Make it green.
Green business practices reduce waste, can save you money and make your business more marketable.
Standardize your bidding process.
A 2012 benchmarking study showed that construction firms submit 5 to 20 bids a month (with about a 10-20 percent win rate). If these bids are done manually, each one will take three times as long as using software or standardized spreadsheets (under 10 hours versus 30 hours).
Be properly insured and maintain a safe workplace.
Secure the proper business insurance, including WorkSafeBC coverage, to better protect you and your company against claims for personal injury and property damage.
Know and follow the rules for using independent contractors.
In California, any non-licensed construction worker is automatically an employee.
Use change orders – and charge for the changes.
Before agreeing on a contract price, set the expectation that the contract price will be adjusted based on any change orders submitted.
Market your business beyond referrals.
A few marketing methods include websites, networking organizations, jobsite signs, business cards, customer testimonials, and advertising (online or print).
For help with workplace safety, environment compliance, green practices, construction project management and ways to grow your construction business, contact the Economic Development Collaborative-Ventura County. Conveniently located in Camarillo, California, we’re here to help.