As a professional builder or tradesperson who has been in the industry for years, it’s probably crossed your mind at one time or another to set up your own business. Instead of working for someone else, you can cut out the middleman and be the boss. You get to call the shots and do things your way, and as you’ve already spent year in the industry you have the skills and experience- maybe even contacts already that you need to make the venture a success. However it’s not all plain sailing, construction businesses are some of the most difficult industries to get established in, and there are some significant drawbacks that can make it tricky for startups. However there are some incredible benefits too, and if you’re able to make it a success you have the opportunity to earn a significant profit. Here are a few things to bear in mind if you plan on going in this direction.
One of the reasons starting up a construction business is so difficult is because of the high startup costs. Things like machines and construction vehicles like diggers and cherry pickers don’t come cheap. You need power tools, materials and much more and that’s just for starters. One option would be to finance the cost of these things, or you could hire instead of buying. Another thing you could do is look online and at auctions. Often companies sell off machines, vehicles and equipment when they upgrade or if they go out of business meaning you can snap up a great deal. Taking on a business partner, or even finding an investor could be ways to raise the money you need to get started. They would give you a cash injection in return for a share of your company. Investors often act as mentors too, and could provide you with invaluable advice needed to make your company a success.
The bottom line is always going to be profit when it comes to business. Your success all boils down to how much you earn after balancing all of the various elements of your business.
You need to source the materials, employ staff, deal with marketing, transportation costs and much more- and still make a healthy return from each job you do. So when you’re looking to set up a company, choosing a type of business that’s known for doing well is a smart move. Of course, much depends on you and how much of a success you can make it, but some businesses do tend to earn bigger profits than others. One of the reasons it’s so beneficial to start a business in the construction industry is because of the high earning potential. They can cost a lot to start up with high overhead costs. However, they have the potential to earn a lot of money. This comes down to the fact that projects that involve building work are generally larger and more expensive. Having a conservatory built, a kitchen fitted or an internal wall removed or built, for example, is going to always cost a good chunk of money. They’re the kind of thing that customers spend a lot of money saving for to get done. Other businesses that usually tackle smaller projects mean it’s easier for work to dry up. They need lots of customers, whereas you don’t. You have fewer customers but do bigger jobs that earn more money. However there are some downsides here, one being that a lot of building work can only take place in fair weather. Bricklaying and anything to do with electrical, for example, can’t be done in the rain, and so losing days to bad weather is common in this industry. However, if you’re smart about it you can time projects well, for example if you are putting up a large builder, you could ensure the outer work is done before the wet and cold weather of the year starts to kick in. That way you’re inside a structure and everything else can be completed regardless of the weather.
Health and Safety
Workplace safety can be a minefield with any job. Even in seemingly safe workplaces such as offices and shops, there are slips, trips and falls that can land a business owner with a lawsuit. Health and safety always needs to be taken seriously but in companies in the construction industry there are extra considerations to bear in mind. When you’re working with vehicles, machines, power tools and heights, there are lots of added risks. Make sure suitable clothing is worn by anyone on site, steel toe cap boots, a hard hat and a high visibility vest are examples. In some cases, eye and ear protection will need to be used as well depending on the equipment and type of job being worked on. You need to make sure all of your workers have the correct health and safety certification, if you’re in the US this could be the americansafetycouncil.com/content/OSHA-card. In the UK, it would be a CSCS card. You should ensure that employees have proper training and qualifications to use the machines and vehicles too.
Is It Futureproof?
When you set up any business, it’s a good idea to ask yourself whether the idea is futureproof. After all, you don’t want to end up out of business in a few years where your entire concept was made obsolete. When it comes to construction and building work, it’s fair to say that it’s always going to be in demand. Both commercial and residential clients will always want buildings erected, extensions, layout changes and more. The only thing to be aware of is dips in the market. Take the recession for example, this lead to a net loss of over two million jobs in ten years. However, this is an extreme example and not something that’s likely to happen very often. Right now, the construction industry is thriving and business is booming in this area making it a great place to consider setting up.