Construction companies are at the foundation of growth in our country. As the population continues to grow by more than 0.05 percent every year, new housing needs to be constructed all the time.
And as countless entrepreneurs start new businesses around the country, commercial real estate needs to be constructed or renovated in order to house them.
Construction, while not the most glamorous of industries, fuels growth and allows our society to function. But do you ever stop and think about how a construction company functions?
Starting and running a construction business is complex as there are many moving parts. While it might seem simple on the outside, there’s actually a lot going on inside.
If you are an aspiring small business owner, looking to get into the construction industry for yourself, then read on below to discover how construction companies operate on the inside, and what system to build from day one.
Startup Operations For Construction Business Ownership
Before getting started and handling the day-to-day operations of your construction firm, you need to get through the startup phase. There are a handful of tasks to complete to become a legal contractor.
The most important is to acquire your contractor’s license. These are state-specific, so you’ll need one for each state you plan to complete work in.
Most of the time, you’ll need to complete an exam in order to get the license. Taking an online course to study for the exam will help you save time and money. You’ll choose a company name when acquiring your license. Make sure this name is available for registration in your state.
With a license in hand, you’ll need to finance your company. While you may not need lots of money upfront, the more you have, the easier it will be to land and complete your first few jobs.
You can take out a personal or business loan from a bank. Or borrow from family members. Alternatively, much of the equipment needed can be rented in the beginning, until you can buy your own.
You’ll also want to legalize your company. You should work with an attorney to form an LLC, which will provide protection between your company, and your personal assets like your home, car, and life savings.
And you’ll need insurance. There are multiple insurance policies that contractors would benefit from, including general liability insurance. You can work with a private insurance agent to create a bundle that works for you.
Marketing Operations For A Construction Company
One of the most important operational pieces of a construction business is marketing. But it’s also the piece that most contractors skip. After all, they are contractors, not marketers.
But word-of-mouth marketing will only get you so far. Eventually, you need systems in place to generate consistent leads and consistent contracts.
At the least, you need to have a website in place that makes it easy for leads to contact you via email, chat, or phone. You should have multiple pages on your site, describing in detail the services that you specialize in.
Then, you need to choose a method of bringing people to your site. It is worth the investment to hire a marketing agency, or at least a freelance marketing specialist to aid you.
SEO and search ads will be a major traffic source for your construction firm. Focusing on local keywords and searches can provide high-quality leads on a daily or weekly basis.
Providing Quotes
Creating construction quotes is the bane of a contractor’s existence. It’s vital in order to get a scope of the project, determine the resources needed, and sell the client. But they take a lot of time to complete.
And most of the time, clients won’t even sign and get started. They just disappear, even though you spent all that time on a quote.
Luckily, since creating quotes is a weekly, if not a daily part of a contractor’s job, there are specialized tools for renovation estimation. No longer do you need to come up with quotes by hand or use a spreadsheet.
The right software can make it fast and headache-free to create accurate quotes. Accuracy is important for overall client satisfaction. And it also helps you to manage cash flow better, by not over or underbuying for each project.
The cost of software like this is worth its weight in gold, and you should have it in place from day one, as it will save you time and money every week.
Managing Leads
Once leads reach out to you for a quote, it’s all about managing these leads to turn them into clients. This means ongoing communication and building trust.
Some people will sign the contract and want to start work right away. Others need more time to plan for the project and raise the funds needed.
Luckily, depending on the estimating software you use, you might also have lead management functionality built it. This will help you track and maintain conversations and documents with clients in one place.
Working With Subcontractors
If all of your other operations are running smoothly, then they all lead to this; working on a job site by managing subcontractors.
If you want your company to grow, you can’t do all of the work yourself. The most cost-effective solution for completing more projects at one time is by building a network of subcontractors who can complete projects on your behalf.
Learning how to run a successful construction company boils down to attracting leads, winning bids, and managing subcontractors. You can achieve massive success without having to swing a hammer yourself. It’s all about the operating systems you build and the business management skills you develop.
Building A Succesful Company
Running a construction company is no easy task. That’s why the ones who make it and build a successful company make a lot of money.
It’s a lucrative opportunity and one that creates massive value for society. And while it takes construction skills in order to get started, your long-term success boils down to management, marketing, and efficient operations as a business owner.
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