How to Start a Construction Company: 7 Necessary Steps

How to Start a Construction Company: 7 Necessary Steps
  • Author: Fazal Umer
  • Posted On: August 22, 2021
  • Updated On: July 5, 2023

In the U.S., the construction industry is expected to grow 8% by 2022, which shows the high demand for new businesses.

Like with every company, it’s overwhelming starting a business regardless of how much of an industry expert you are. Perhaps you’ve dreamed of starting your own construction business, but you’re not sure where to start.

Sounds familiar? Don’t worry, you’ve come to the right place. Here is how to start a construction company in seven steps.

1. Research Your Local Market

The first step of starting a company is understanding the construction industry. Figure out where there is a need for you, whether you offer a niche service or are the only business in your area.

And don’t forget to consider the state of the industry to ensure your company can grow.

2. Write a Business Plan

Successful construction companies are developed from a solid business plan. In yours, include your mission statement, funding goals, and detail your plans for your company. Further, mention who the founders are, when it’s formed, and what your business does.

3. Register Your Business

Before you prioritize construction staffing, you must register your business. First, decide whether you want to be the sole propriety or register as an LLC. Next, get an Employer Identification Number which is essential for paying your taxes.

Plus, check whether your state requires extra paperwork as it varies across the country.

4. Get Licenses and Permits

When starting a business, you’ll need various licenses and permits so you can legally run. For instance, construction businesses will need general contractors’ and federal licenses.

And, if you’re unsure which permits to secure, contact your local Department of Labor for more information.

5. Find an Insurance Provider

As you’re managing employees, you must have insurance to cover them. It also means that if anyone is injured or your team breaks anything on a client’s property, then you needn’t foot the bill.

To be safe, get general liability, property, and vehicle insurance as a foundation.

6. Consider Financing Options

Even the best construction business must find funding to turn their dream into a reality. A popular option is applying for a small business loan (SBA) as long as you’ve got a long credit history and a great credit score.

Or apply for purchase order financing as it covers the cover of a project’s material upfront.

7. Market Your Business

How to Start a Construction Company: 7 Necessary Steps

Once you’ve covered the nitty-gritty, you must find ways to reach new audiences.

Start by building an online presence that includes your website and social media channels. Using this, post informative content that solidifies you as an industry expert and encourages prospects to hire your business.

How to Start a Construction Company

Hopefully, you now know how to start a construction company.

Make sure you understand your local market, target audience, and have a robust business plan. You should also consider funding options and market your company for the best results. Good luck!

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Author: Fazal Umer

Fazal is a dedicated industry expert in the field of civil engineering. As an Editor at ConstructionHow, he leverages his experience as a civil engineer to enrich the readers looking to learn a thing or two in detail in the respective field. Over the years he has provided written verdicts to publications and exhibited a deep-seated value in providing informative pieces on infrastructure, construction, and design.