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Revealed: The Top Mistakes Construction Company Startups Make
There’s no denying that the construction industry is booming. In the United States alone, it’s an industry worth approximately $1.3 trillion and, despite COVID-19, is still a buoyant sector. With that in mind, many new startups launch their brands in the industry each year.
If you’re going to start a construction company soon, you will undoubtedly enjoy the benefits that being part of such a lucrative industry has to offer. However, it would help if you also kept in mind there are some common startup mistakes you need to avoid, such as the following:
Not Having Enough Industry Experience
Arguably one of the biggest stumbling blocks of any construction company startup is not having the right industry experience. Yes, the founders may have had a bit of work experience. But, that doesn’t mean they’re fully qualified to understand the industry.
At a minimum, it’s a good idea for people involved with a construction startup to have a construction management degree or similar, along with several years of practical experience to know about the challenges faced within construction. It’s always best to plug any skills gaps, especially relating to the specific niche you plan to serve in the construction industry.
Incorrect Business Structure
As you might know, anyone starting a business in the United States can opt for one of several business structures. For example, a sole entrepreneur might feel that sole proprietorship is the best choice for them.
You’ve also got choices such as a limited liability business, an incorporated company, and different variations of partnerships. If you’re unsure which business structure is suitable for your new enterprise, you should seek professional advice from an accountant. That’s because they can inform you of the most tax-efficient option to suit your business needs.
Forgetting to Arrange Startup Capital
As with any business, your construction company will need some capital to begin trading and serving its customers. Even if you’re starting your business on a shoestring budget, you still need some money in the bank to pay for expenses.
Construction companies typically need money to cover expenses like employee costs, building materials, professional fees, and machinery and equipment hire. If you don’t have such capital available, you can’t provide a service to your clients.
Thankfully, there are multiple startup capital options open to you. For instance, you could get a personal or business loan or arrange for outside investment from a venture capital firm. It might even be possible to obtain a small business grant, depending on where you’re based.
Mistakes Construction Company Startups Make: Ignoring Essential Marketing Tactics
Lastly, if you launch a new construction company, you will need paying clients. Without them, there’s no point running the business! With that in mind, you should take some time to market your brand online and offline.
You could create a website and invest in some online marketing tactics such as SEO (search engine optimization) and PPC (pay-per-click) advertising. Offline, it makes sense to attend industry networking events and distribute your business card to potential clients.