While the construction industry has been hesitant to incorporate process and technology advancements, getting the basics right is still a problem. Project planning, for example, is generally done on paper with little coordination between the office and the field. Contracts lack incentives for risk-sharing and innovation, performance management is lacking, and supply-chain processes are still crude. Even while the long-term benefits are enormous, the sector has failed to embrace new digital technologies that require upfront expenditure (Exhibit 3). Construction spends less than 1% of revenues on research and development, compared to 3.5 to 4.5 percent in the auto and aerospace industries. This is also true for information technology spending, which accounts for less than 1% of construction income despite developing several new software solutions for the industry. The construction analytics speeding up timelines.

Create a solid business plan

Your construction company’s goals should be established in your business strategy. It should include a precise technique for each stage of the process, as well as the timing and resources you’ll need to achieve your objectives. Include whatever you think is relevant to your company’s smooth operation. Because you will be required to provide copies of your business plan to financial organizations when attempting to borrow financing, it must be complete.

Locate an Appropriate Home Base for Your Startup

While many construction businesses start in the owners’ homes, you will eventually need to relocate to more formal corporate premises to establish your company. Because you’ll most likely be storing equipment and tools on-site, the property you choose as your home base should have enough office and storage space. The location you choose should also have plenty of parking for your company’s vehicles.

Make sure all of your legal ducks are in a row

Showing that you are structured, efficient, and compliant with all necessary regulations, laws, and standards is the ideal way to establish your firm as a professional operation and build confidence. Ensure you have all of the required certifications, licenses, permissions, and registrations for your firm. These differ by state, city, and neighborhood, so do your research. If needed, hire a lawyer.

Recognize Your Tax Obligations

Engage the services of an accountant to determine what documentation you’ll need to keep on file for your deductions. Audits aren’t often, but they happen, so you’ll want to be ready and have accurate books.

Recognize Your Insurance Obligations

Make an appointment with an insurance representative to discuss the coverages you’ll need for your company. It would help if you safeguarded your company’s assets and your assets in the event of work-related injuries, personal obligations, or damage to clients’ property. Both you and your company must be adequately insured.

Organize Your Funding

To get your business off the ground, you’ll need to buy, rent, or lease equipment, tools, and cars. You’ll also have to pay your expenses, advertise, and pay your employees. Before you bid on your first contract, you’ll need to acquire finances, so apply for financing as soon as possible.

Contact suppliers, business associates, and other contractors to form a network.

‘Network, network, network,’ says the narrator. It’ll pay off in the end. Getty Images/Paul Bradbury

Establish credit with numerous vendors by opening accounts with them. You’ll need an excellent working relationship with other contractors to call on them to help you finish jobs you can’t finish yourself or don’t have time to accomplish before the deadline. You’ll also need to form strong bonds with industry professionals, such as construction inspectors.

Whether to hire employees versus contractors is a decision that must be made.

Will you use contractors on a project-by-project basis or keep full-time employees? Dealing with contractors offers more flexibility and reduced costs because you don’t have to provide benefits (in most circumstances) or continue to pay a salary when business is slow. At the very least, you should consider hiring a full-time assistant to learn the ins and outs of your company and keep things moving smoothly. When people call your business, they also love hearing a familiar voice.

Make a marketing and advertising budget.

You can decide that your advertising requirements are as straightforward as job site signage. You may also choose to require more promotion, such as radio, television, and online marketing, such as a website and blog. To establish your brand, you’ll also need to design a logo. Business cards, brochures, and a business portfolio are also recommended promotional tools. Whatever you do, don’t cut corners when it comes to marketing. Allow for more space than you think you’ll need.

Set aside money for construction software

Don’t forget to budget for construction management software to help you run your company. This will allow you to streamline and automate a variety of operations. The correct software solutions can save you hours, if not days, of work per job. Here are some of the greatest solutions for construction accounting software.