How Can I Start My Own Construction Company?

Starting a construction company can seem like an overwhelming task, but I’m here to break it down for you. In this blog, I’ll walk you through the general steps my team at Elevate Construction and Lean Built took to get started, along with some valuable insights you can apply to your own journey. So, if you’re ready to dive into the world of construction entrepreneurship, let’s get started!

Importance of Getting Experience First

One of the first things you need to know before starting a construction company is that experience matters. I’ve seen people jump into the industry without real hands-on knowledge, and it rarely ends well. Before you start your company, it’s essential to have practical experience—whether that’s in a trade or on the management side. This background will help you navigate challenges and make informed decisions. So, before anything else, make sure you know your craft inside and out.

How to Find Your “Why”

The most successful businesses aren’t just about making money—they have a deeper purpose. Ask yourself why you want to start this company. Do you love building? Do you want to carry on a family legacy? Maybe you’re passionate about changing the construction industry through lean practices, like we are. Your “why” will carry you through the tough times, so take the time to figure this out before diving in.

Know Your Systems and Processes

A strong foundation for any business is knowing what systems and processes you’re going to implement. For us, we chose specific tools like the First Planner System for planning, the Takt Production System for scheduling, and the Last Planner System for maintaining project flow. In construction, successful project completion relies heavily on proper planning and execution. Have your systems in place before you start to ensure smooth operations.

Be Willing to Train Your People

A huge mistake many new construction companies make is assuming that everyone they hire knows what they’re doing. This isn’t always the case. You must be ready to invest in training your team—don’t just throw them into projects without proper guidance. Internal training is key to delivering quality work and building a team that understands your systems and values.

Find a Way to Start

The hardest part is simply getting started. You don’t need to tackle the biggest projects right away. Many companies start with side jobs or house flips before growing into more substantial projects. Personally, I took the risk of using retirement savings to bootstrap my business. Others might explore partnerships with developers, venture capital, or investors. The key is to explore all possible avenues for funding and growth.

Form a Business Plan

A business plan is crucial. I highly recommend using the Business Model Canvas, a visually engaging tool that makes creating a business plan less daunting. A well-thought-out business plan helps you secure loans, get investor interest, and streamline your operations. Consultants and partners will also want to review it, so it’s important to have this in place before you proceed.

Choose a Great Name for Your Company

The name of your company can make a significant impact on your success. It needs to immediately convey what you do. For example, our name, Elevate Construction, reflects our mission to elevate the standards of construction. Take the time to brainstorm and choose a name that represents your vision and services. Don’t rush this step—it’s more important than you might think.

Get the Necessary Licensing and Permits

You’ll need the proper licenses and permits to operate legally. This will vary depending on your location, but it’s a non-negotiable part of starting a construction company. If you’re unsure where to start, I have additional resources on this topic that can guide you through the process.

Secure Insurance and Bonding

Insurance is another crucial element in starting your business. You’ll likely need general liability, builder’s risk, and possibly professional liability insurance, depending on the nature of your work. It’s essential to keep all your policies current and work with a broker who understands the construction industry.

Set Up Your Finances

Financial management can make or break your business. Set up your finances with the help of a good accountant, financial advisor, and possibly a lawyer who specializes in construction. One financial strategy I recommend is looking into cash flow insurance, which allows you to borrow against your life insurance policy without interest, giving you access to cash when you need it.

Purchase Equipment and Build Your Team

Once your finances are in order, you’ll need to purchase the necessary tools and equipment for your work. Along with this, focus on building a reliable team that shares your vision and work ethic. Your team is the backbone of your company, so invest in hiring and training the right people.

Develop a Marketing Strategy

Many new companies underestimate the importance of sales and marketing. In today’s world, visibility is key to securing projects. I highly recommend reading “They Ask, You Answer”, a book that will help you master your marketing approach. Focus on creating content and strategies that connect with your target audience and showcase your expertise.

Establish Operational Procedures

Your company needs clear operational procedures to run smoothly. These procedures will help you train your team, hold them accountable, and ensure consistency in your work. From safety protocols to daily workflows, establish these systems from the start.

Launch and Follow Up

Now that everything is in place, it’s time to launch your business! But launching isn’t the end—it’s just the beginning. You’ll need to continuously follow up with clients, refine your processes, and adapt to challenges as they arise. Building a successful construction company requires ongoing effort and attention to detail.

Final Thoughts

Starting your own construction company is a challenging yet rewarding endeavor. To succeed, you need a combination of practical experience, a solid business plan, reliable systems, and a motivated team. Focus on your “why” and be prepared for the ups and downs of entrepreneurship. If you ever need help, don’t hesitate to reach out. I’m here to help you on your journey!