The demand for construction is as strong as ever, but firms—both big and small—are struggling with labor shortages. On the flip side, this means that there is no better time to start a general contractor business when there is clearly a high amount of demand in the market.
But just like any other business, there are many risks involved with starting a general contractor firm. To minimize these risks and help ensure your bottom line, here are several tips that can help you come out on top:
1. Start with a clear business plan
Any type of business requires a business plan. It will help you create a framework for your business as well as get some unknowns out of the way. Some of the most important questions to answer in your business plan include:
- Who is my target market?
- How much will I charge my customers?
- What are the costs? (Initial and ongoing)
- Where will I find my workers? And how much will I pay them?
- How am I going to market my business?
- Who are my direct and indirect competitors?
- Who will be my key players?
Spend more than enough time creating and refining your business plan before you start. Aside from helping you map out the specifics of your business, doing so will also increase your chances of securing funding from banks and other financial institutions.
2. Consider buying a franchise
The beauty of the franchise model is that you acquire a business with all the specifics already mapped out. You don’t have to worry about figuring out the marketing, reputation building, operations management, and other aspects of the business because the franchisor has already done it for you.
Furthermore, franchisors provide training to help you stand on your own two feet when you eventually start operations. For example, if you purchase a restoration franchise, the franchisor will provide restoration business training and support to help you learn the ins and outs of the business, which would allow you to operate more independently going forward. And in case you need help, you can rely on their customer service to get you unstuck at any point in time.
3. Start a website
In the digital age, a website is crucial for all types of business, and the construction industry is no exception. Having a website will help you increase your reach, connect with customers more easily, and showcase your best work for everyone to see.
That said, prepare a budget for website building and maintenance. If you can’t make and maintain a website on your own, you would need to take on a web designer/developer, a graphic artist, a content creator, and a marketing consultant on your team.
4. Generate a buzz
Before you even start your business, you can already start creating a buzz in the local community to increase brand recognition and establish your reputation. For example, you can hand out business cards to people, advertise your up-and-coming business in the local paper, join trade shows, and offer free consultancy services to potential clients—all in the name of gaining traction before you start operations.
5. Build a portfolio
A portfolio that showcases your best work will help gain customers’ trust, especially if you are new to the construction business. Homeowners don’t want to take risks for something that they are paying a lot of money for, hence, show them what you can do before you ask for their business.
But how do you build a portfolio before you start operations? Simple. Do work in your own home. Or perhaps offer to do work for free in your friends’ homes in exchange for including the work in your portfolio. Either way, having proof of your results will help attract future clients and establish a good reputation for your business.
6. Find the right people
In a general contractor business where most of the work is done by people’s hands, finding the right people that those hands belong to makes all the difference. As mentioned at the beginning of this article, the construction industry is experiencing labor shortages, mainly due to low pay and a lack of bonuses. Hence, a great way to attract the best people to your team is by offering competitive salaries, good bonuses, and great benefits that manual workers deserve.
With the demand at sky-high levels, now is the best time to start a business in the general contractor industry. But before you dive in, incorporate these strategies into your business plan in order to gain traction faster; attract more clients; and establish yourself as a reputable business in the community.