The Challenges of Starting a Construction Business

Regardless of what type of industry you work in, chances are you need a building for something. Whether you’re a real estate developer that needs a property renovated or built, or if you’re a wealthy business owner that needs a skyscraper constructed, chances are you’re going to contact a construction company to help you out.


Why a Construction Company?


Construction is one of those industries that are closely tied to every other industry. Much like how employee relations can be outsourced and are relevant to every facet of business, or how the chemical industry provides everything from cleaning equipment to medication to other companies, construction companies get a lot of contracts because they’re needed by everyone.

As a result, the construction business is always booming. Until people stop developing businesses, selling houses or there’s not enough land to build on anymore, a construction business will always have clients and contracts to work with. A small construction company can be started by anyone and you can take on small jobs such as renovation or refurbishment, but there are many challenges when it comes to upgrading your startup to a fully-fledged large-scale construction company that takes on high-profile contracts. To get you started, here are just some of the challenges involved in creating your very own construction company.


Image Link


Building a Niche


As with almost every other business industry, having a niche means that you can stand out from the rest of the crowd. By standing out, you gain more exposure, you can specialize your services, and of course, you can charge more for your expert advice.

Don’t be afraid of starting up your construction company with a niche. Builders are very versatile; even if you don’t explicitly advertise something, chances are you’ll get requests that are out of your company’s comfort zone. It means you could screw up a contract, but the best way to learn and pick up new skills and experience is by working in uncomfortable situations.

For starters, try to pick a niche that works in your area of operation. If you start small, you simply won’t have the money or resources to haul materials long distances and transport your employees to distant locations to work. If you start small, think about small-scale projects you can take on such as residential contracting and office refurbishment.

If your company is situated close to an office complex or retail park, then chances are you’re going to get a lot more calls if you specialize in refurbishing offices as opposed to homes. If you live close to a suburb, then you’re going to get more luck specializing in home contracts. Analyze the area, choose your location wisely, and start smart.

The other advantage of starting with a niche is that you can quickly learn. Not every business owner starts with years of experience and a degree in a specific field. Everyone has to learn, and the best way to do so is to get your hands dirty from the beginning. Get involved with the renovations and contracting process, speak with your employees, and study as you go along.

Being in a niche will also give you preferential treatment in some circles. For instance, if you did a really good job refurbishing someone’s kitchen, then chances are you’re going to get referred to their neighbors and friends in the future.


Image Link


Financing Your Idea


While you can start a business with very little or no money, it’s extremely difficult to do so and you probably won’t be starting a construction company of all things with no funds. The best way to start a construction company is to find a lender who is willing to invest in your idea.

However, the construction business is risky due to the number of tools, supplies and employees you need to hire. While a small startup will have more chance at success, trying to fund your expansion to a fully-fledged construction business will be extremely difficult unless you go to the right people.

That’s why sites like exist. If you want to start a promising construction business, then you have to speak with construction specialists that have plenty of experience and knowledge in the field. They understand the challenges that come with a construction business, so they know if your idea will work or fail, and they know exactly how much money you are going to need to succeed.

Think of it this way: you wouldn’t approach someone who has no idea about computers to lend you money for a tech startup, and you wouldn’t speak to someone about starting an art and design studio if they have no interest in design. Pick your lenders carefully, and get the right support when you want to finance your idea.

Another very popular option is to start a construction business by yourself with the help of friends and family. A group of DIY-savvy friends can easily create a humble little startup and take on requests from the local community. This might mean that you’ll have to scale down on your operation and slowly work your way up.

For instance, you might go from kitchen renovations to simply replacing an appliance or installing a new table, but it’s still good experience and it’s something to put on your business resume for when you approach a lender for money to expand. Gather some DIY-savvy friends and family members, start up a business with very little investment, and get working!


Image Link


Following Regulations and Acquiring Permits and Licenses


When you start up a business, you’re no longer just a group of people that help out others with their DIY troubles. As a business, you need to follow extremely strict rules and regulations that determine what you can and can’t do, and should or shouldn’t do in the construction business.

For starters, let’s take a look at licenses and permits. One of the most important licenses to obtain is an asbestos license. Many old buildings were constructed with the help of asbestos, a natural fibrous rock that was used in many homes and office buildings until 1999. It had great insulation properties, protected against fires and is great against corrosion.

Unfortunately, it has the nasty side effect causing a risk to your health if you are exposed to the airborne fibers. It can lead to nasty diseases and commonly leads to cancer if you breathe in too much. As a result, you need to have a license that shows you understand the risks of asbestos and how to properly handle it.

Other examples of important licenses to obtain are water boiler standards licenses, scaffolding consent and oil and gas safety. All of these licenses must be obtained before you start works. If the works you carry out do not meet standards, then chances are your company will be flagged, checked, and if you don’t have those licenses, you can kiss goodbye to your business for good.

Some examples of regulations include standard building regulations, and these are commonly controlled by local councils or authorities. There are safety regulations too, such as ensuring that your workers have ample protection to their bodies and that they understand how to use power tools and other DIY equipment that could be dangerous to them or those around them.


Image Link


Finding the Right Employees


As with any business, employees are necessary. If you plan to have a very generalized construction business that takes on a variety of different contracts, then you’ll have to hire a range of different employees to meet all of those needs. For instance, you might need plumbers to handle waterworks, an electrician to reroute wiring if it is needed and painters to add the finishing touches to a job.

Don’t forget that you also need employees to handle your office. Customer service experts and accountants are must-have hires once you start taking in regular contracts, and a human resources manager is a great asset when it comes to managing your workloads and splitting up your workforce should you have enough manpower to take on several jobs at once.

You might also consider outsourcing some works. For example, if you don’t need to hire an electrician due to how infrequently you deal with electricity and wiring, you could always contact a specialized electrician to do the works for you. These costs are usually added to the bill for your client, but it’s always a good idea to let your client know about all the potential costs for a job if something is out of your scope.


Image Link



Starting a construction business is challenging but not impossible. There are many paths to greatness, and the one you take will heavily influence what options you have in the future and how quickly you get there. The golden rule of a construction business would be to stick with regulations, obtain licenses, and pay close attention to how your employees manage jobs. Outside of that, make sure you get the right financial support from a lender that understands how construction companies work and strive to provide the best service so you get more exposure.

Leave a Comment

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s