Though the demand for housing goes up and down because of various economic factors, it never goes away altogether. In addition, even existing structures are going to need repairs. For this reason, there will always be a demand for contractors. The hours are long, the work is strenuous, but the rewards can be plentiful if you do it right. With that in mind, here are some tips on how to start a contracting business.
Do Not Treat It Like a Get-Rich-Quick Scheme
A successful business is a get-rich-slow operation; you are aiming for steady long-term gains, not quick short-term profits. In order to do that, first, you must figure out the costs of starting a business, the operating costs, and what licenses and permits you will need to operate legally wherever you choose to set up your contracting business. Being diligent with your plans and preparations is the first step towards success.
Use Your Business Plan to Figure Out How Much it is Going to Cost
There’s an old saying: “Failing to plan is planning to fail.” That is especially true of the contracting industry. You need to make a business plan. This is an invaluable tool you can use to plan for financing or show to potential investors; it details how much the business is going to cost in terms of startup costs and operating costs.
Your business plan should also cover in reasonable detail the kind of equipment you intend to use on the job. If you intend to hire any employees, then you should mention their salaries as well; these are covered under operating costs.
Seek Out the Help of Professionals & Professional Organizations
If all this research seems a bit overwhelming at first, don’t let it scare you off. You do not have to go through this process alone. If there are retired professionals in your area or other experienced tradesmen that you know, ask them to mentor you. They likely know many of the ins and outs to help you get your business up and running.
Aside from individuals who may be willing to help you, there are many organizations that can provide you with assistance to help you get established in the contracting business. One of the most common sources of help for new small businesses is the Small Business Association. They can give you step-by-step advice on everything from how to write a business plan to which permits you need to fill out.
Fill Out the Proper Permits & Paperwork
Paperwork is the least enjoyable, most cumbersome part of any job. Unfortunately, it is a necessary evil in order to do business in most places. Fortunately, technology has helped make that a little bit easier now that you can do some of these online. There are some excellent resources available from sites like LegalZoom that can help you form an LLC or file a DBA (“Doing Business As”) to help you get your business up and running relatively pain-free.
Another key element of your contracting business is insurance. Depending on the exact nature of your business and whether you have employees, you’ll likely need a variety of different insurances like general liability, workers’ compensation and unemployment. The Small Business Association has an article titled “What Kind of Business Insurance Do You Need” that can help you identify your insurance needs.
Get the Word Out About Your Business
Every business relies on advertising to attract new customers and help keep old ones aware of their existence. Yours is no different, but since you are just starting out, you might want to try some simple ways to get the word out. Flyers are a good way to start; if you have some graphic design skills, then you can design one yourself. If not, you can have someone do it for you and take them to a print shop to have them printed up and duplicated. Online classified ads are even better because you can reach a larger number of people at a much lower cost: free! Craigslist is a perfect example of simple online classifieds that offer an easy way to get your business in front of potential customers.
The next logical step to generating leads and business would be building a website and engaging in some online marketing by promoting yourself on a number of lead generation websites. You can download our “The Contractor’s Guide To Website Marketing” to gain some valuable insights into building an online presence that helps you grow your business.
Choose the Right Tools to Manage Your Business
One big mistake new contractors tend to make is choosing the wrong tools or choosing no tools to help manage their business. Picking the right tools can help keep you organized when it comes to managing paperwork and looking professional with prospective customers. That’s why a low-cost tool like JobFLEX is so important. JobFLEX is an app to help create and manage quotes and invoices simply and easily.
While many new contractors lose business with sloppy handwritten quotes, JobFLEX creates professional looking PDFs that you can email right from the jobsite. JobFLEX also has reporting to let you know when payments are past due to make sure you’re getting paid. Cash flow is a big issue for many new contracting businesses, and a tool like JobFLEX can help put your business over the top. If you’re just starting a business, it’s worth checking out a free trial of JobFLEX.
Time to Get to Work
Now that you know what steps you need to take to start a contracting business, you can refer back to this article to help guide you throughout the process. If you’ve ever dreamed of being your own boss, now’s your chance to do your homework and start your business plan to see if owning your own contracting business is the next step in your career.