Despite the economic downturn in the UK, the construction industry is actually getting back on its feet again. With more people looking to move into a home and less houses available to buy, there is now a greater demand for new build homes.
Although most people in the construction industry choose to be an employee or work in a self-employed capacity for a particular building company, it is now a good time to just set up shop on your own and start your own building company.
If you are liking the idea of becoming your own boss and being able to shape your future directly, rather than taking orders from someone else, then you should give some serious thought to setting up your own construction business. Continue reading to find out how!
Be a specialist, not a generalist
You’ve probably heard of the saying “jack of all trades, master of none”, well it would be a very bad idea if this applied to you! You should have a think about what you want to specialise in, and stick to that specialism.
You could additionally specialise in some related fields as well, for example if you want to specialise in joinery you could also specialise in carpentry, kitchen cupboard/counter construction and so on.
Do some research
Once you have decided what field(s) you wish to specialise in, the next step is to do some extensive research. Things that you will need to research include:
How saturated the local market is for your chosen fields;
What demand there is for construction work in your local area;
The average prices charged by the competition for your line of work.
You will also need to determine how likely it is that you will be able to make your business sustainable in your local area. In other words, if the work dries up in the near future, how easy would it be for you to gain new contracts in other neighbouring towns and cities?
Determine your business costs
Being in the construction industry will mean that you need to invest a lot of money in various things, such as tools and equipment, a van, appropriate business insurance, bookkeeping and accountancy fees.
Unless you have the cash saved up to pay out for those things and to pay for your personal outgoings whilst you are finding your feet, you will need to raise some capital investment from external stakeholders or financial houses (that’s business speak for borrowing the money from someone).
In order to borrow any money, you will need to have a sound business plan which details exactly what you are planning to do, how you are going to do it, how much your expected costs will be, and what your projected turnover is going to be.
Line up potential employees
On big construction projects you will need to hire some people to work for you. Because you are going to establish a new business, you will not want to hire people whilst you aren’t making any money. Therefore it is essential to keep a list of contacts available that you can hire on a self-employed basis, as this will take away the onus on having to deal with their tax affairs and significantly lower your operating costs.
Set up accounts with trade suppliers
Once you are up and running, you should make sure that you have trade accounts set up with building supplies firms. Not only will you be able to get materials and tools quickly and easily, but you will also be able to build up a credit history which can later be referred to should you need to borrow money from the bank to expand your company.