Are you starting a new construction company, or looking for some guidance as you consider taking on a new construction project?
Before you begin, you’ll want to ensure you’re creating a solid foundation on which to build. Consider these helpful tips to turn your dream of owning a construction business into a reality!
Prior to Starting the Construction Company
Before we get into how to start a construction business, you’ll want to make sure you’re convinced you actually should start one. Even if you’ve already begun some of the later action steps, take a pause, step back, and ask yourself whether or not you’ve done your due diligence.
Start On Your Own
- Research the market in your geographical area to help you gage whether or not this is a viable business venture.
- FoundationSoft offers a few tips on how to conduct this research and what to look for.
- Take a few classes, or seminars, to help you learn some business basics, such as how to write a proposal or business plan.
Seek Out Expertise
- Contact your local SCORE chapter and speak to counselors with business ownership experience to run your ideas and questions by someone who’s been there.
- Once you’re sure you’re going to move forward, seek out professionals to be trusted partners as you move forward; this includes a CPA and a construction lawyer.
How to Start a Construction Company
The big-picture steps for how to start a construction business are fairly similar to starting other businesses (e.g., registering, finances, additional documents), but construction licensing and permitting can vary widely from state to state and even geographical region.
Therefore, it’s important to look at each step carefully.
About Registering a Construction Company
You’ll first want to start by deciding what kind of entity your company is. Most companies are LLCs, which keeps your personal finances separate in case of debt or other legal issues. But it’s a good idea take a look at all the business types to decide which option works best in your individual situation.
Contact your local, state, and federal governments to let them know you’re starting a construction business. The state and local levels will help you with registering as a construction company, applying for a business license, and determining what certifications are needed to do the work you’re planning on.
At the federal level, you’ll want to get a federal Employer Identification Number, or EIN.
Get (and stay) on top of your finances
Here is where having a trusted CPA (Certified Public Accountant) will be important. They will be able to help you with your financial plan and answer any questions you have about tracking income and expenses.
Before you meet with your CPA, start working on these tasks:
- Bank Account – Make sure to set up a bank account for your company, so that you can keep your personal and professional finances separate.
- Start-Up Money – If you want to take out a bank loan for start-up money, check out several banks before deciding on one. Ask about their requirements, terms, and conditions, and how much they’re willing to give you.
Determine any additional needs
Depending on local regulations, how you’re hiring employees, and the nature of your construction project, there are a variety of other steps you may need to take.
Here are just a few to look into:
- Insurance Coverage – This is particularly important in construction, where injuries can occur easily.
- Bonds or Bonding – Even if this isn’t required in your area, being bonded may make potential customers feel more comfortable working with you, which is a huge help for a new company.
- Equipment – Do you have all the equipment you need to fulfill your jobs? Is everything insured and licensed under your business?
Following All Requirements for a Construction Company
The long list of how to start a construction company can seem intimidating, especially if you don’t have any experience running a business. But don’t worry—hiring experienced lawyers like those at KTF Law Firm can help!
In general, a business lawyer can help protect your small business by ensuring you’re following all governmental regulations, have the right business structure, and are covering your intellectual property.
If you’re going through the steps of registering a construction company, you’ll want to make sure you find a business lawyer like the ones at KTF Law Firm who have a specialty in construction law.
What Does a Construction Lawyer Do?
There are many reasons to hire a construction lawyer, but the most important thing to remember is that they are well-versed in state law and therefore will be able to alert you to issues, oversights, or liabilities that could cost you money or even your business.
In addition to familiarity with city ordinances, zoning laws, OSHA requirements, and the state and federal permits you’d need for a variety of construction projects in the Twin Cities metro area, lawyers like those at KTF Law Firm can also assist with finding capital, creating and executing contracts, and determining how your choices will affect your taxes.
In other words, having someone well-versed in Minnesota law and construction can save you huge headaches and potential liability as you navigate these numerous issues.
Start Building Your Business
If you’re new to the business, trust someone who has been there before. KTF Law Firm provides industry-specific support and insights so that you can focus on what you do best: building solid structures and strong communities.
Contact KTF Law Firm for a free consultation and get started on your new construction venture today!