Starting a General Contracting Company
Starting a general contracting company is exceptionally lucrative. The scope of work and the number of potential customers is limitless.3 min read
2. Promoting Your Construction Business Online
3. Finding a Mentor
4. Understanding Your Potential Clients
Starting a general contracting company is exceptionally lucrative. The scope of work and the number of potential customers is limitless. You can set yourself up for success by putting in place the correct systems, business entities, and structures. There could not be a better time to do this, as the construction field in the United States is currently booming.
According to a report issued in 2016 by Sageworks, residential building construction was the fastest growing industry in the country. This is a result of the increase in real estate's value and the high demand for housing.
Types of Entities and Insurances
There is no “one-size-fits-all” answer as to what type of entity you should use. The decision needs to take your unique needs into consideration. Once you have taken the time to think this decision through, you will have peace of mind, and be offered all the necessary protections for yourself and your family.
As a business owner, you will need various types of insurance. General liability insurance is a must, as this protects your contracting business from the risk of potential lawsuits. These could stem from illnesses, accidents, and injuries sustained on your business premises.
Promoting Your Construction Business Online
Having a website is essential. This becomes a great platform upon which to outline your service offering and to showcase some of the successful projects you have already completed. Your website should contain great industry-relevant content that is search engine optimized. This content should be educational and informative, as this will show potential customers you have all the relevant knowledge and skills.
Social media marketing is another great tool you can put to good use for your construction business. Platforms such as Facebook, Twitter, and Instagram allow you to target clients from specific areas and from particular demographic groups.
Finding a Mentor
Finding a business mentor is a great idea. This should be somebody who has the experience to teach you how to manage both customers and money successfully. Ideally, it would be somebody who was also in a position to introduce you to investors or vendors. A mentor could possibly be a retired contractor or a family member. If there is no one appropriate within your immediate circle, then you may need to hire a mentor.
On the topic of hiring people, you can relieve a great amount of stress by outsourcing certain tasks. This leaves you free to focus on growing your business, rather than worrying about areas you may know little about. Accounting, for example, can be incredibly stressful and time-consuming. Consider bringing in a freelancer to take care of all your bookkeeping and accounting needs.
A report recently released by Ibisworld shows the U.S.'s contracting industry is recording annual revenues of approximately $195 billion, and it is enjoying a growth rate of 11.7 percent year on year. This report also showed that over 650,000 contracting businesses are currently operating, creating about 6 million jobs. As a large contributor to the country's economy, the contracting industry is building structures to the value of approximately $1 trillion each year.
Understanding Your Potential Clients
Finding out who your potential clients are and what thought processes they go through before making decisions is a critical step to success in the contracting industry.
Potential clients include the following, although this is not an exhaustive list, as the options are virtually limitless:
- Local businesses in your area
- Local, state, and federal governments
- Individuals wishing to undertake construction projects.
The government is a great source of potential income for a general contracting company, as its needs are vast, and include the following:
- The construction of roads, buildings, and other projects
- Renovation and maintenance of facilities
- Procurement of goods
- Specialized services like consulting and security.
In essence, contracting services for the government can be divided into services, goods, and technical assistance. When it comes to private individuals, contracts tend to be either service contracts or building contracts. A homeowner who requested your services would usually request that you carry out a construction project or a repair job in or around his or her home.
Business clients, on the other hand, would approach you with needs similar to those of a government department. The project would be likely to involve procurement services, research, or technical assistance. The only difference would be that you would be offering this service to a local business rather than to the government.
If you need help with starting a general contracting company, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with companies like Google, Menlo Ventures, and Airbnb.