Starting a construction business? Maybe you’re starting your own building company or you’re a bricklayer, carpenter, or concreter going out on your own. You probably already know that the actual building project is only a fraction of your role.
To run a small business you need to be a salesman, an accountant, an employer, a marketer. The list goes on and on. Here are recommendations from Paragon Tools for the top tools every builder needs. They might not be what you think.
But on actually starting the business – where do you start? You need to make sure you plans are financially viable, legal, marketed well and organised. These top tips will teach you how to do all of this, and more.
How do you develop a time management plan?
You want your business to run smoothly, and to do this you need a good time management place and efficiency. Focus on things that bring you income 80% of the time. Too often people get caught up doing menial things that don’t have a high return on investment. This is called the Pareto principle and the idea behind it simply put is that 80% of results will come from just 20% of the action. So if you work out your building companies highest yielding activities and focus on them, then you should enjoy more company success.
This might mean that you need to outsource some of the things you are doing. If you can get someone else to do jobs that don’t require your expertise, so you can focus more on things like marketing, or streamlining processes. At the end of the day you will be better off.
There are only so many hours in a day and you need to make the best use of yours. Poor time management can cost a construction business owner. Not only in terms of earnings but by eating into valuable family and personal time.
The good news is that you don’t have to be particularly technical or fantastic with computers to make this work for you. You can find construction apps and cloud-based management software you can use from your phone.
Depending on the scale of your business, you could invest in comprehensive management software that integrates scheduling, suppliers, contracts, and almost all aspects of your business.
However, if you don’t need a bespoke system, you can still benefit from using a basic time management system to plan your projects, prioritize your time. Not only will you feel more in control, but you’ll also be more efficient and profitable.
How do you organize business finance?
Having a financial system in place will improve your cash flow. By having a clear idea of what money is coming in and going out of the business, you’ll be able to:
- Budget forecast with greater accuracy.
- Ensure you pay bills and subcontractors on time.
- Have your records to complete your tax return easily.
When starting a contracting business the financials can be overwhelming. Too often money is lost by simply not following up on overdue bills.
If you’re a small construction company and your life is awash invoices, receipts, bills, and looming tax returns then you need to get on top of this as quickly as possible.
There is a huge range of financial management apps and software you can use to make this process easier. From a simple spreadsheet in excel that monitors your incoming and outgoing expenses and their due dates to much more comprehensive software on the market like Xero and Account Right.
Many programs allow you to store documents electronically, send out invoices, photograph receipts and connect your business bank accounts.
How to pick a good accountant
Having a good accountant that you can trust is also vital for making sure your financials are running smoothly. Don’t be scared to shop around until you find someone you are happy with and trust. The cheapest accountant is not necessarily the best. A good accountant can give you strong advice that can save you money come tax time, but also set your company structures up to protect your interests and make the most of the money you have.
How do I write a construction business contract?
When starting a contractor business it is so tempting to google another companies terms of reference or legal contracts and copy it. Not only is this illegal and can land you in hot water, even for small jobs, having a professionally produced legal contract is vital. By setting out the responsibilities of both parties, it protects both you and the client should any disagreements arise.
Most construction contracts typically include:
- Responsibilities of both the client and the builder including payments, complying with schedules, carrying out works, conforming to building regulations, providing test certificates and guarantees
- A detailed description of work to be carried out. It will often involve any architect’s drawings.
- Price agreed, including payment terms and timescales.
- Timescales of start and completion.
- Change request procedures. Make sure these are in writing rather than a verbal agreement that can be disputed later.
- Quality of work expected and sub-contractor management.
- Liability period for any future defects.
- Disputes management and circumstances for termination of contracts.
By having these contracts in place, it can give peace of mind to both you and your client. Consult a specialist lawyer who will draft you a suite of contracts that can be used on a range of projects. For large scale, complex work, it is worth getting a bespoke contract drawn up for each individual job.
How do I market my business for the first time?
Many builders make the mistake of thinking they don’t need to do any marketing. They think their work comes from word of mouth and referrals. While any marketer will tell you that word-of-mouth marketing is a fantastic way to get business, when you start a construction business you shouldn’t neglect some basics.
This way, if work from referrals dries up, you aren’t starting from scratch with your marketing strategy.
Here are some basics:
- An SEO friendly website. It doesn’t have to be complicated, just showcase your services and have a way to contact you.
- Claim your Google My Business listing. Most people’s first port of call for a project is an internet search engine, most often Google.
- Social media presence. You don’t need to be everywhere. Choose one or two platforms and concentrate your efforts on these.
- Local advertising. If you operate in a specific town or city, look at advertising in local papers, radio, trade specific magazines, or websites like Hi-Pages.
- Reviews. Encourage happy customers to leave reviews on Facebook or Google Business.
Once you’re more established, you can look at building up your marketing campaigns. If you aren’t comfortable setting up your marketing materials yourself, look into hiring a specialist or agency to get you up and running.
The Right People
Running a business is hard. Having people you can trust is essential. Whether you use people directly or use sub-contractors, you need good people to help you in running a successful construction company.
Make sure you do your due diligence on anyone you are thinking of working with. Take-up references, ask to see examples of their work and hold them to account if they are underperforming.
The Top Tools for the Job
Did you really think we’d get all the way to the end without mentioning the actual physical tools for the job? Never start a project without these things in mind:
- Reliable equipment is very important. A broken or inferior tool sucks up your time, wasting your company’s potential to make the most of the day.
- Don’t go for the cheapest option. You want good value for your money but don’t go for inferior products.
- Keep garden and construction tools serviced and in good repair with a reputable repair agent like Canberra Diamond Blade. A breakdown could be costly to replace the equipment, but also you might incur costs if you can’t complete a job on schedule.
- Safety first! Low quality, unserviced tools can be dangerous and cause significant injuries. Don’t take the risk.
How do I make my construction company stand out?
The key thing for making a company successful other than doing the job right, is being organised and planning ahead. We all have the same amount of time, yet there are some people who will always make it big and this revolves around our internal attitude.
As Stephen Covey said “the key is not spending time, but in investing it”
So when you are working out how to run a construction company, it really comes down to your overarching strategy. Many people put off things that could have great returns for their business. Procrastination and distractions are the worse enemy for success. But if you plan carefully to make sure you spend your time wisely on the most important things for your business, then you have a great chance of being more successful with your business.
Starting your own construction business
This isn’t an exhaustive list of top tools for when you are starting a general contracting business. But it is a great basis for improving your business by becoming more organized and efficient and increase your earning potential.
Check out our collection for more stress-free tools to help you get the job done.