Opening up your own contracting company is a brand new experience that requires serious preparation. Just like priming a wall to paint, you need to build a foundation. These seven tips show you how to start a business that will stand the test of time.
1) Ask for Advice on How to Start a Business
Although you may be confident in your abilities, it pays to seek out the advice of those who have been there before. Many new contractors have learned the ropes of how to start a business from an industry veteran.
If you need help finding a mentor, you could contact small business assistance programs, such as SCORE Mentors, a non-profit supported by the federal government. The SBA offers a variety of free and low-cost consulting and training services to small business owners at its Small Business Development Centers across the country.
2) Register your Business Name
One of the first things you should do is to make your business name official. In the United States, business names are registered at the state level.
You will want to choose a unique name that will also give customers an indication of what type of services your company provides. For example, Lucky Landscaping or Centereach Construction.
3) Write a Business Plan
A strategic plan is another invaluable tool, especially if you don’t know how to start a business. It should identify where your company is today, where it is going and how it will get there.
Use these six steps to create a winning business plan:
- Executive Summary
- Company Description
- Market Analysis
- Organizational Structure
- Financial Projections
4) Find Funding
5) Get Licensed, Bonded and Insured
Signing up for licenses, permits and insurance today can save you from serious issues down the road.
Business Licenses and Permits
There are several general and specific business licenses you will need before you put the first shovel in the ground. You will also want to check with your home state’s business office for information about local regulations. For example, an electricians license requirements in New York State differ from that of a contractor who works in masonry.
If your business is in the construction industry, you may need to purchase construction bonds in order to operate legally. A surety bond is a way to insure you will be able to pay your client if you do not fulfill work obligations that are obligated by a contractual agreement.
Before you get the ball rolling, you must have several types of insurance, including general liability and workers compensation. Insurance is essential, because it will protect your business from all types of lawsuits resulting from unplanned events like injuries and accidents.
6) Create an Occupational Health and Safety Plan
Depending on where you work, the skilled trades have many rules and regulations you need to know. For example, the Occupational Safety and Health Administration (OSHA) requires construction owners provide a safe, hazard-free workplace. OSHA offers a free workplace safety program that helps small businesses learn to comply with government standards.
7) Hire Workers
As you prepare to get down to business, you will need to find quality sources of labor. Whether you plan to rely on subcontractors, hired employees or independent contractors, you should become familiar with the laws and tax implications of your hiring choices.
In order to attract quality workers, focus on offering these kinds of benefits:
- Competitive pay and benefits packages
- Healthy work life balance
- Welcoming work environment
- Diverse workforce
Once you’ve completed these seven steps, your next task is to market your services to the public. Although many contracting jobs come through word-of-mouth referrals, you will also benefit from an online, print or social media marketing strategy. With any luck, the leads will begin piling up, and your business will begin to grow healthy and strong.