Your Own Construction Business: Starting Small

Construction Business

The construction industry in the US has an estimated market value of about . This is not yet taking into account the rest of the world. The construction industry can be at the core of every nation’s development, directly responsible for infrastructure development. Any given country’s economic outlook is simultaneously facilitated and manifested by its infrastructure: highways, bridges, housing, air and seaports, schools, commercial skyscrapers, among many others.

While it’s true that a construction business typically requires substantial startup capital, construction businesses can make significant profits as well by their second year of existence, on average.  This is especially true for business people who have the experience, expertise, and funding to deliver high-quality construction projects. For smaller starters, the industry can still be a lucrative endeavor. Still, it is essential to do these extra first steps in building a solid business plan before finally working on all the other legal paperwork.

Know Your Market

The field of potential clients and investors for the construction industry encompasses both government and private sectors. A quick study of sectors or organizations constantly requiring construction services listed below can significantly refine a construction entrepreneur’s business plan:

  • Corporate businesses
  • Real estate investors
  • Families
  • School districts
  • Foreign investors
  • Religious organizations
  • Healthcare
  • Transportation bureaus
  • Local governments
  • Recreation
  • Sports organizations
  • Independent entrepreneurs

The list can be endless, but a good business plan ideally targets a specific sector or niche market, especially for small startups. Decide on an area of specialization. As a startup, you have the flexibility of establishing a construction specialty that can be associated with your brand for years to come.

  • Public works such as roads, dams, and bridges
  • Airports, seaports, or helipads
  • Commercial buildings such as office spaces, shopping malls, parking facilities, or mixed-use structures
  • Public and private facilities such as schools, hospitals, or factories
  • Single-detached or multifamily housing
  • Renovation or remodeling services
  • Heavy equipment rentals
  • Staffing and manpower
  • Construction Consultancy services


Economic Analysis

Starting a construction business of your own is much more complex than starting a regular trade business. More detailed and intensive cost-benefit analyses are ideal in assessing the business’ potential for success. A good construction business plan ideally confronts all possible risks and can detail corrective action items per business threat. When you have at least an outline of your business plan, check it against the bigger picture of the country’s economy and anticipate financial impact from all possible fronts. Doing so should aid you in focusing on the right niche for your scale.

Whether big or small, launching a construction business is more than just establishing an office facility that houses staff, points of contact, and necessary equipment. There is a need to study strategies for attracting investors and a continuous stream of clients. After which, you should be able to effectively present to these investors and clients how your projects intend to guarantee returns for their investments.

And, of course, there is the return on your own investments. Any construction business’ largest investments relate to equipment and machinery. Do a serious cost-benefit analysis of whether to purchase, lease, or rent your equipment. You can purchase second-hand heavy construction equipment if your budget doesn’t permit brand-new machinery. Most importantly, you must know how much equipment you need to start with. Look at your heavy equipment acquisition from both the long and short-term angles.

Start-up Capital

If you are starting your construction business at a small scale, it is possible to start working out of a home office, but look ahead to the eventuality that you will need a more official business address. Apart from legitimizing your operations, an official space will be necessary to house growing staff, files, and equipment, and if possible, vehicle parking or machine storage.

Lock in the funds you will need for lease, utilities, payroll, marketing, and other expenditures. It is wise to secure funding for your capital expenses prior to bidding for your first construction project.

Here are other basic costs you must secure funding for when starting a construction business in the US:

  • Incorporation fees
  • Professional fees (lawyer, accountant, and security)
  • Licenses, permits, and insurance
  • Office equipment such as computers, telephones, furniture, and security systems
  • Marketing and advertisement (signage, letterheads, business cards, promotional materials, and websites)
  • Working capital for your first project

The construction industry is a thriving business. A good business plan for a startup construction business involves understanding various market groups, creating detailed cost-benefit analyses, and securing funding. Initially, it may be a complex and costly endeavor, but its potential to be lucrative is just as promising.

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