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5 best steps to start a construction company

It is exciting and scary to start a construction company. With all the important research, reports, and paperwork that come with running a business, it’s easy to get bogged down in the administrative details.

You can give your business a strong base by doing market research, making a clear plan for running the business, and asking for help. You could also use it to avoid problems many new construction companies face. As a result, the question arises, “Where do you even start?”

Everything from making a business plan to figuring out what kinds of insurance you need has been put together for you. Here are five steps you can take to start a construction company. 

1. Gather Research About the Construction Industry

One of the first things you should consider is whether you can even hire a construction company. As a side note, if the market is full and customers are happy with the local companies, it may be hard to get into construction, let alone build a profitable business.

Do some preliminary research on the market. It would help if you looked into how many construction companies are in your area and their specialities, prices, and reputations in the field. Also, you need to know basic facts about your target market, like its size, average age, socioeconomic level, key issues, etc. This information will help you make a good business plan and give you an edge when you’re ready to enter the market.

2. Make a plan for your business.

Every new business needs a business plan, which acts as a road map for getting the business off the ground and helps the founders find investors, money, and other resources. Here are the steps you should take to make a business plan for your construction company:

Think carefully

The first part to start a construction company is your business plan should be the executive summary. The summary must be short (one or two pages), clear, and interesting.

The Small Business Administration says you should write down your company’s goals and vision, its products and services, financial highlights and funding goals, big wins in the past, and plans for the future. The executive summary’s themes will be expanded in the next parts of your business plan.

The Situation of the Company

After the executive summary, please talk about the history of your company, from how it started to what it does now. Include a value proposition statement that explains why your company’s goods and services are in demand in your sector.

Information about the competition

You should give market research data that shows how much demand there is in your target market and why your business is best suited to meet that demand.

Organizational Structure

In this section, you should describe how your company is set up. Remember to include the following:

  • Details about who owns the industry and how its shares are set up
  • Investors get their hands on stock.
  • The way your company is put together and how it works (corporation or LLC)
  • How the company is set up
  • Staffing levels now and expected growth

Don’t forget that you need to show how each part of the framework is important to the long-term health of your business.

3. Register Your Business

Once you have a good business plan, register your business to become a legal entity and give you personal liability protection, legal protection, and tax benefits. To be recognized by the law, a company name must only be registered with the right state and local authorities. To get a federal tax ID or Employer Identification Number (EIN), you must also register your business with the federal government since not all states give these numbers out automatically (EIN). Then, you can register your company’s name and logo with the United States Patent and Trademark Office as trademarks.

4. Acquire all the Licenses & Certifications you need

After a business is registered, it needs to get the right licenses and permissions. Depending on the kind of work you want to do and where your business is located, you may need a license or permission from both the federal government and the state where your business is located.

start a construction company - A building is being constructed

Transportation, drilling for oil and gas, and mining are all common economic activities that need permission from the federal government. For example, you need a special permit to drive a car that is too long or too heavy. This means you need a permit to move things like building materials, pre-built walls, or gear. Go to the SBA’s website for federal licenses and permits and choose your industry.

5. Raise money to start a construction company

Most construction companies need money to rent or buy the necessary tools and supplies. If you’ve never bought or rented construction equipment, this guide may help clear things up.

When it’s time for a small business to buy something, think about the following ways to pay for it:

Small Business Loans

The Small Business Administration (SBA) helps small businesses by giving them loans with low-interest rates. Businesses can only get SBA loans if their owners have a good credit score and a long credit history.

With the help of Lender Match, it’s easy to find a lender who will give you an SBA-backed loan.

Working Capital Loans

Working capital loans are custom financing used to pay rent and salaries. Experts in the field say that working capital loans are especially helpful in the tourism and hospitality industries, where most of the year’s income can come in just a few busy months. When business is slow, companies often take out working capital loans to help them make ends meet.

Purchase Orders Provide Funding

Short-term financing options could help businesses that buy a lot of materials, like construction, pay for the supplies they need right away.


Even though start a construction company from scratch is hard, you may have a better chance of long-term success if you follow these five steps.

Our consulting services cover the process, from finding new customers to making accurate cost estimates and following up with them.

If you want to discuss your business, contact us anytime.

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