How to start a modern construction company
As with any startup, launching your own construction company requires a bit of business acumen.
And you need a business plan.
You can scour the internet and find a business plan template that you can model your company on or sign up for a business basics course at your local university.
Either way, you need to plan out exactly how to go about entering the world of construction. It’s competitive, it’s fast and it’s cut-throat.
The construction industry has come a long way. It’s taken on various different developed technologies which have seen new builds take on features never imagined before. The likes of smart buildings which respond to voice command and sense when it’s dark outside so the lights turn on. So starting a construction company now requires a little more than simply having a good connection for your brick and mortar supplies and a labour force.
Here are four things to consider when starting your own construction company.
Find the right financing
It’s suggested to most new business owners that they bootstrap their startup and only use the money in the bank or their back pocket to fund the company. But do you have the money to purchase the construction equipment you’ll need? Most people don’t consider some of the equipment needed costs the equivalent of purchasing a new truck. And on that note, have you got a truck?
To ensure you have access to the financial backing you require, you need to do some groundwork long before you do anything else. With your business plan in tow, you must sit down with the bank or a private investor and discover how much funding is available to you.
Apply for the correct business licenses
Any type of company requires the correct business license to legally operate. But a construction company requires other licenses that allow you to apply for construction tenders and contracts. The Companies and Intellectual Property Commission (CIPC), the Construction Industry Development Board (CIDB) and the National Home Builders Registration Council (NHBRC) are governing organisations that have set out required guidelines and standards.
You need to register your company with these organisations too. Compliance with these governing bodies is the only way to ensure you’re allowed to compete for larger contracts available from the government and get involved in major corporate builds. These registrations are costly and you might need to hire a professional agency to complete this part of the process on your behalf.
Investigate insurance
You cannot have a construction company without having insurance. The purpose of the insurance is to cover in the event of many different things that might go wrong. During the project, you must have insurance in place to cover you should loss or damage occur to the construction site or equipment. It will also cover accidental loss or damage to third party property and goods. You must ensure that the insurance you choose also covers product liability which provides protection against financial loss that may arise out of any legal liability incurred because of damage or injury which has resulted from the use of a covered product.
This insurance must cover you after you’ve completed the project too. In plain language, if you don’t have insurance you’ll be expected to pay out whatever the loss is that incurs and this could at best leave you in debt and at worst leave you bankrupt.
Make provisions for technology
The construction industry is not necessarily considered a technologically advanced sector. But with technology affecting all sectors, the built environment can stay behind operating with traditional and soon-to-be out-of-date equipment or management systems. So when setting up your construction company you should, of course, arm your entity with excellent construction equipment. But also make sure you’ll have some funds available to invest in technological processes to assist your activities.
For instance, thermal imaging has taken the industry by storm as it assists you with spotting all flaws and possible weaknesses in your build. It is also something you can make use of as an app of your mobile phone. Drones have also become very handy to construction companies as they can be used to quickly survey your job site and assist you with building maps.