How to start your own construction business Pt1:Market Research
So you want to get into the construction business but you don’t know where to even start. In this blog we will explore a number of processes necessary to start a construction business of the right way and questions to consider when formulating a strategy to operate your business systematically towards long term success.
Construction is not for the faint of heart, I am sure you’ve heard that plenty of times and more than likely you will never stop hearing it. Like any other industry there are aspects running a construction business that can appear to be cut throat or dog eat dog in nature, but I promise you it gets better if you weather through it all and stay consistent.
First thing first, make a list of service you would like to provide as construction company. You may think to yourself, you will do anything as long as you get paid, this is most peoples first mistake in construction. You will see a common theme between the most successful construction companies, the one thing they generally have in common is “Specialty” in other words they specialize in a specific aspect of construction and don’t spread themselves thin trying to equipped themselves to take on any construction job. While it may seem that broadening your service base is the best way to get leads or inquiries as to your businesses services, the wise move would be to build up the offering of your services as you go and not try to advertise that you “do it all,” even if you can do it all, no one man can do it all at once so keep the list short and realistically aligned with your experience level.
Next consider the scale of work you want to do, this will decide how you form your business and what business assets you’ll need to seek out to run a business legitimately. The scale can be measured in a number of ways but starting with the two largest pathways in construction can really help you focus in to a good specialty for your individual business set up.
RESIDENTIAL CONSTRUCTION- Residential construction encompasses the process of building, renovating, or remodeling homes and other residential structures. It involves various stages, including planning, designing, obtaining permits, site preparation, foundation laying, framing, roofing, electrical and plumbing installation, insulation, drywalling, flooring, interior finishing, and landscaping.
Throughout the construction process, there are several professionals involved, such as architects, engineers, contractors, subcontractors, electricians, plumbers, carpenters, and landscapers, who work together to bring the project to fruition.
Residential construction projects can range from single-family homes and townhouses to apartment buildings and condominium complexes. The construction methods and materials used may vary depending on factors like location, budget, design preferences, and environmental considerations.
Overall, residential construction aims to create safe, comfortable, and functional living spaces that meet the needs and preferences of homeowners while adhering to building codes, regulations, and quality standards.
COMMERCIAL CONSTRUCTION- Commercial construction involves the development, construction, and renovation of non-residential buildings for business and commercial purposes. This sector covers a wide range of structures, including office buildings, retail stores, restaurants, hotels, warehouses, healthcare facilities, educational institutions, and industrial complexes.
The process of commercial construction typically includes several stages, such as site selection and preparation, architectural and engineering design, obtaining permits and approvals, project management, construction planning and scheduling, procurement of materials, building the foundation and structure, installing utilities and systems (e.g., HVAC, plumbing, electrical), interior finishing, landscaping, and final inspections.
Commercial construction projects often require collaboration among various professionals, including architects, engineers, contractors, subcontractors, project managers, interior designers, and landscapers. These professionals work together to ensure that the project meets the client's requirements, complies with building codes and regulations, and is completed within the specified budget and timeline.
The design and construction of commercial buildings may also involve considerations for sustainability, accessibility, energy efficiency, and safety. Additionally, commercial construction projects may be subject to specific industry standards and regulations, depending on the type of building and its intended use.
Overall, commercial construction aims to create functional, aesthetically pleasing, and efficient spaces that support businesses, organizations, and communities while meeting the diverse needs of their occupants and users
Why does this matter? Each decision you make in the inception of your business is going to affect the start up costs, and your business overhead/operational costs drastically.
So whether you choose to do Either Residential, Commercial or both hopefully now you have an idea of what we mean in terms of scale. The clients in residential will not operate the same as the clients in commercial, also the laws and codes around performing the work for residential or commercial can vary, therefore incurring additional investment in educating yourself on the differences between the two. In my experience you do not want to hire a Residential roofing contractor to do commercial work and vice versa, understanding the service structure of other construction companies you may hire as subcontractors on projects can help you avoid a number of mistakes. Which brings me to my next topic.
Mistakes are inevitable, as a construction business you will learn that adaptation valuable but proper planning is everything. So to plan for the inevitable shopping insurance is usually the best way to stay ahead of costly unfortunate events. Whether your tools and equipment get stolen or damaged in transit or on the job, one of your workers gets injured on site, or a disgruntled customer is unhappy about your work and wants to take legal action, its best to be prepared with a good general liability and workmans comp policy. What kind of insurance do you need? We will answer some of the questions that trail off from insurance needs in another part of this series, but the cost comparison is going to be part of the necessary market research.
