So, you want to be your boss by starting a contracting business? Great! The contracting industry is booming, and there’s never been a better time to jump in. But how to start a general contracting business, and where do you begin? Keep reading 😀
Common Mistakes Made By New General Contracting Businesses
- Not having a clear business plan: Without a business plan, it’ll be challenging to make your contracting business successful. You must determine your company’s goals and how you’ll achieve them.
- Not having the proper licenses and insurance: To operate legally, you’ll need the proper licenses and insurance. Depending on your state, you may need a contractor’s license, a business license, and liability insurance.
- Not having enough start-up capital: It takes money to make money. Before starting your contracting business, ensure you have enough money to cover your expenses.
- Not knowing your target market: It’s essential to know who your target market is and what they’re looking for in a contractor.
- Not having a marketing plan: You must let people know you exist! A marketing plan will help you spread the word about your business and attract customers.
- Not being organized: A disorganized business is an unsuccessful business. You must keep your contracting business organized and running smoothly, from project management to finances.
How To Start Your Own Contracting Business In 9 Steps?
Whatever your reasons, starting a general contracting business can be a great way to make a good living while doing something you’re passionate about. But before you can start hanging out your shingle, there are a few things you need to do.
Follow these eight steps, and you’ll be on your way to starting a successful contracting business.
1.     Research The Competition
The first step is to find out who your competition is! Look for other contractors in your area and research their businesses. Find out what services they offer and how they market themselves. Also, research the average rates charged by contractors in your area so you can price your services competitively.
2.     Decide What Services You Want To Offer
The next step is to decide what services you want to offer.
- Are you going to specialize in a particular trade?
- Are you going to offer general contracting services?
Once you know what services you want, you can build a list of the equipment and tools you’ll need to get started.
3.     Get The Right Insurance
Insurance is crucial for contractors. Make sure you’re covered for any potential risks associated with your business. This will protect you, your employees, and your customers from accidents or injuries. Primarily you’ll also need your business’s liability and workers’ compensation insurance. These policies will protect you financially if one of your employees is injured or your company is sued for damages.
4.     Get Licensed And Registered
To operate legally, you’ll need to get licensed and registered with the state where you plan to do business. Each state has different requirements, so check with your local licensing board to find out what needs to be done to get started.
5.     Create A Business Plan
Once you handle the competition and the necessary licenses and insurance, it’s time to develop a business plan. Your business plan should include
- Information on what services you’ll offer
- How to price those services
- And your target market
It should also include any financing you need to get your business up and running. Plus, you can make influential business partners and grow your reach!
6.     Find The Right Suppliers.
No contractor can succeed without the help of reliable suppliers. Spend time researching to find suppliers who can provide you with the materials and equipment you need at a fair price. Once you’ve found a few suitable suppliers, build relationships with them so that you can count on them for years to come.
7.     Hire The Right Employees
Finding qualified employees is one of the most critical steps in starting any business. When hiring for your contracting business, look for candidates who have experience in the trade or industry and are hardworking and dependable.
8.     Market Your Business
Now that everything is up and running, it’s time to start marketing your contracting business. There are many ways to market a business, so choose the methods that make the most sense for your company and budget. Also, look at these nine ways to get your first paying customers with a limited budget!
9.     Keep Detailed Records
Detailed record-keeping is vital for any business owner, but it’s crucial for contractors since much of your work revolves around contracts and agreements. By keeping detailed records of everything from bids and estimates to invoices and receipts, you’ll always have access to the information you need when you need it.
The contracting industry is constantly changing, so you must stay up-to-date on the latest industry trends. And remember, growth isn’t the only metric you should pursue in your business!
Things To Consider When Hiring Subcontractors
When hiring subcontractors for any project, there are a few key things to remember.
- First and foremost, it is crucial to know the project’s exact scope and requirements so that you can select subcontractors with the skills and expertise needed to carry out the work.
- Next comes the budget – you will need to determine how much you can afford to spend on subcontracting, which may limit the types of contractors you can hire.
- Moreover, you should consider scheduling, the type of work required, and any special compliance needs.
Overall, these factors will help ensure that you make the best possible decision regarding hiring subcontractors. Your project should be successful with careful planning and an eye toward these critical considerations!
Which Marketing Strategies Work Best For General Contractor Businesses?
When it comes to marketing strategies for general contractors, there are several different options to consider. Some businesses may focus on traditional marketing tactics, such as print or digital ads, or invest in more interactive marketing efforts like social media campaigns.
However, some approaches tend to be more effective than others. For example, many contractors find that word-of-mouth recommendations and referrals from existing clients are among the most powerful tools in their marketing arsenal.
These recommendations can help bring new customers through the door and convince them of the quality and affordability of the services the business provides.
Furthermore, contractors who maintain an active presence on reviews like Yelp often see increased customer engagement and revenue!
SWOT Analysis For A General Contracting Business
There are a few key things to remember when completing a SWOT analysis for a general contracting business. First, it is essential to consider the business’s strengths, weaknesses, opportunities, and threats.
Some of the potential Strengths of a general contractor business may include:
- A strong team of experienced professionals
- A large pool of satisfied customers
- A good reputation in the industry
- A wide range of services offered
Weaknesses could include:
- High overhead costs
- Long payment terms from clients
- Dependence on subcontractors
Opportunities for the business may include:
- Increased demand for services
- A growing economy
- New technology could be used to improve efficiency or lower costs.
Threats to the business may come from:
- New entrants into the market
- Changes in government regulations or policies affecting the industry
- Economic recession
When completing a SWOT analysis, it is essential to be honest and objective. This will allow you to identify areas where the business can improve and potential opportunities that could be capitalized on. Moreover, by considering all four factors, you can develop a well-rounded picture of the business’s current position and how it might be able to grow in the future.
What is a PESTEL Analysis?
A PESTEL analysis is a framework used to analyze the political, economic, social, technological, environmental, and legal factors that may affect a business. This type of analysis can be helpful when trying to understand the external factors that could impact a business’s ability to succeed.
Some of the potential political factors that could affect a general contractor business include:
- Changes in government regulations or policies affecting the construction industry
- The stability of the government in the country where the business operates
- The availability of government funding for construction projects
Economic factors to consider include:
- The overall state of the economy
- Interest rates
- Inflation rates
- Unemployment rates
Social factors that could impact a general contractor business include:
- Demographic trends
- Changes in social norms or values
- The development of new technology
Technological factors to consider include:
- The availability of new construction materials or methods
- The development of new software or applications that could be used in the construction industry
- The use of drones or other technology in construction projects.
Environmental factors include:
- Changes in weather patterns that could affect construction schedules or project costs
- The need to comply with environmental regulations affecting the construction industry
- The impact of climate change on the construction industry.
Legal factors to consider include:
- Changes in laws or regulations affecting the construction industry
- The impact of legal decisions affecting the construction industry
- The need to comply with safety regulations.
When completing a PESTEL analysis, it is essential to consider all potential factors that could impact the business. This will allow you to develop a well-rounded understanding of the external environment in which the company operates. Moreover, by considering all six factors, you can create a comprehensive picture of the challenges and opportunities that may impact the business.
Back To You:
Starting a general contracting business can be a great way to make a good living while doing something you’re passionate about—but it takes more than ambition and a strong back.
However, with careful planning and research, you can get your business off the ground in no time. These are just a few things potential contractors should remember when thinking about starting their businesses. With a little effort, you can get your business off the ground in no time.
FAQs
When starting a general contracting business, what are some things to remember?
When starting a general contracting business, some things to remember include planning and research, licensing and permits, insurance, bonding, marketing, and keeping detailed records. Additionally, it is essential to stay up-to-date on the latest industry trends.
What are some ways to market a general contracting business?
Some ways to market a general contracting business include word-of-mouth recommendations, referrals from existing clients, online reviews, and maintaining an active presence on social media. Additionally, contractors can invest in traditional marketing tactics such as print or digital ads.
How do I determine if I need special licenses or permits to start my business?
The best way to find out if you need any special licenses or permits to start your business is to contact your local Chamber of Commerce. They will be able to guide you through the process and advise you on what licenses and permits you will need.
What are some things I should consider before hiring subcontractors?
Some things to consider before hiring subcontractors include the project’s exact scope and requirements, scheduling, the type of work required, budget, and any special compliance needs. Additionally, it is essential to ensure the subcontractors you hire have the skills and expertise needed to carry out the work.
Is there anything else I should know about starting a general contracting business?
Some other things to keep in mind when starting a general contracting business include: understanding your target market, being aware of your competition, and having a solid business plan. Additionally, it is essential to ensure that you are organized and have systems in place to track job progress and invoicing.
