How to start a construction company, with little to no experience.

So you want to learn about starting a construction company? 

Awesome. 

Seriously! The trades can be a great way to make money and are a great alternative to expensive education and loads of student debt.

BUT…

Starting a construction business with no experience can be a scary…but exciting endeavor.  Especially if you’re starting with no money, it’s crucial to understand what’s needed right away, what parts can wait until you become more established, and what factors to consider.

In this article, I’m going to look at a basic checklist for how to start a construction company, along with a free video that covers this information. Strong durable construction companies are similar to strong buildings – they are both built on solid foundations.  Learning about some of the basics will help you get a better start building a strong company.

Although this isn’t exactly a “starting a construction business for dummies” type of guide – it will cover the very basics you’ll need to consider to get started.

Don’t like reading? Here’s a video summarizing everything!

There’s also a PDF checklist that you can download here, that will walk you through all the steps in this post: Starting A Construction Company Checklist PDF.

A bit about me… (Chris Jurin) and why I know what I’m talking about.

-I am a contractor.  I have been in the business for over 24 years.

-I actually began working at age 6 over my Christmas breaks.  (An interesting side story – I actually learned how to drive stick shift on an F350 dump truck.  I would backup the dump truck after school and hand empty it into the dumpster.)

-I am the president of our family’s commercial roofing company as well as I have a roof consulting firm.  I am also the president and founder of Construct-Ed – an online learning community which helps contractors build their technical and business skills.

This post is written to give you basic tips for starting a construction business but…

Before we get into it…

Construction is not a quick game – it is not a get rich quick scheme.  As with any other business, it takes time to build a strong business.  

Also…

I am not, and I will repeat I am not – A CPA, A banker, An Insurance Agent or a Lawyer.  

These are all important advisors for your business start-up.  Make sure that you have someone on your team who can play these roles for you.  I am sharing my advice which is based on my 20+ years experience in the industry. Make sure that you take this advice and talk with professional advisors who can help you get started right.

Most people who leave to head out on vacation create a to-do list – a checklist.  Starting a business is a much longer journey than leaving for a week’s vacation.  

This is a sample checklist for steps that need to be taken in order to make sure that your journey starts off right.

First Stop: Accounting

The first stop on the checklist is accounting.

When you get ready to start, make sure that you set up a separate checking account for the business.  Get checks printed. Avoid the temptation to allow your personal money to co-mingle with your business money. You MIGHT consider hiring an accountant – preferably one with experience in construction accounting. If you do, meet with your accountant on a regular basis – more frequently when you are just starting out.

Get a good accounting program established when you start.  Work with your accountant to get the system setup so that it will give you the feedback that you need to evaluate your business. Learn to speak the accounting language – it is a unique language.  But once you master it, you will be better able to lead your business.

A word of caution – some states require sales tax collection and remittance for certain contracting services.  

Make sure that you talk with your accountant about what is needed.

The next stop is legal.  

Getting your company set up correctly is critical to protecting you, your family and your investment.

Find an attorney who can help you evaluate which corporate structure is best for you.  There are online services that can do this as well. Establish your legal entity.  You may consider different structures including a Corporation, S-Corp, LLC or possibly even a sole proprietorship. Review your structure with your attorney to make sure that you are not over-exposed to potential loss or liability.

Research and secure the property licenses for your trade.  Many states license construction activity.  Establish a standard contract for your business.  Your attorney can advise you on what to put into the contract.

Be sure to learn from pros who have done it before. 

We created Construct-Ed the way we did…just so you could learn from real pros. You can browse hundreds of courses published by experts in various trades industries, and learn from people with serious knowledge.

After all- if pros who have made it in the industry have scraped their knees, made mistakes, and learned the right way to do things – or how to avoid certain problems – why wouldn’t you want to learn from them?

Don’t forget insurance.

Again, I am not an insurance agent so make sure that you talk with a licensed insurance agent to make sure that your business is covered properly.

Look for a broker or agent who is experienced in construction.  A lot of times an agent may not have experience in a particular industry so they are not aware of the different types of coverage options available.

Determine which lines you will need for your business.  This can differ based in large part on the type of work that you do and the state where your business is located.

There are four primary lines for a construction business – Work Comp, General Liability, Auto and Inland Marine.

Make sure that you get the coverages that are needed to comply with state requirements at a minimum. You may also look at an Umbrella coverage – this sits over the top of other coverages that you have.  Talk to your agent about your unique circumstances.

The last stop on this checklist is the sales and marketing stop.

The first thing to do is to create a web page.  Web pages stand as an electronic brochure at a minimum.  If customers want to see your work, they can look at samples on your webpage.

Establish a social media presence, or get someone to help you.  A lot of people have Facebook pages etc.  Start a company page to help get the word out about your new start-up.

Get letterhead and envelopes printed up.  Get business cards printed up – helps to have business cards available if someone asks for your information. If you get letterhead, envelopes, business cards or other stationary printed up make sure that your license number is printed on them.  

If your company uses company trucks, get the trucks labeled.  We use vinyl signs, but magnetic signs, etc. may also be a solution.  A lot of municipalities require trucks to be properly labeled. This typically goes along with the licensing process.  

Promote your business through local associations – like youth sports. Join the local Chamber of Commerce. Join networking groups – like BNI.

Also join your trade association.  A lot of trade associations have national, regional and sometimes local presence.  Get involved with others in your business and share best practices.  You should establish a consistent process of estimating and producing proposals for your company.  A consistent process will help you accelerate growth.

Most importantly – make sure that you exceed your customer’s expectations!  This will help you build a word-of-mouth advertising program.    

Success is not easily achieved.  If it was, everyone would do it. Make sure that you lay a solid foundation for your business – which will allow your business to grow and prosper.

Thanks for taking this quick tour with me! I hope that this simple beginner’s guide will give you some thoughts about what steps to take next. Remember – get your advisors on board early in the process.  They are the experts and can help you lay a good foundation for your business.

If you would like to learn more about starting and running a successful construction company or are looking to learn about other trade topics – please check out Construct-Ed.

If I can help add value to you and your business, please leave a comment below.