General contractors have quite a major backlog on their hands, and they often can’t get to projects fast enough. Customers are left waiting for months on end, which leads to dissatisfaction. That makes it the perfect time to start a general contracting business.

Not only can you get to these dissatisfied clients, but you can make a decent living out of it, and even a long-term career. That doesn’t mean it’s something you can just hop right into, no matter how good of a contractor you are.

Instead, you’ll need to take the right steps when you start a general contracting business to make sure you succeed. It’s far from just going out and getting clients, and you’ll need to put the time and effort into starting your general contracting business the right way.

Seven practical steps are vital for this, as they’ll sort out the legalities while setting you off on the right foot.

Start A General Contracting Business: 7 Practical Steps

1. Draft A Business Plan

A business plan is essential when you’re starting your general contracting business. It’s a comprehensive document that details exactly how you plan on operating, running your business, making money, and even advertising it. Consider it a step-by-step guide to how you’ll operate in the future.

You’ll have to include quite a bit of information in this, including the types of services you offer, target market information, and much more. Take the time to be as in-depth as possible so you can have a better game-plan going forward.

2. Get Licensed, Bonded, & Insured

All companies need to be licensed, bonded, and insured so they can operate legally. It’s one of the first steps you should take before carrying out any work. A lot of this could depend specifically on what kind of contracting business you actually run.

Put the effort into researching what kind of licence and insurance you need in your particular area. Don’t do any work before you get these, as you could run into quite a bit of trouble. While this means filling out a lot of paperwork, it’ll be more than worth it to avoid any stress and hassle in the future.

3. Name Your Business

Every entrepreneur knows they need to name their business, but it’s something they don’t put too much time and effort into. They could simply stick with their name or some construction-related pun. While there’s nothing inherently wrong about this, make sure your business name is memorable.

Potential customers should be able to think of it whenever it comes to your trade. The more memorable it is for them, and the better it communicates what you do, the better it’ll end up being for you. While this takes a bit of brainstorming, it’ll be more than worth it in the end.

4. Get Incorporated

Each of the above are some of the basics to start a general contracting business, but now you’ll need to get started on some of the more complicated aspects. The first of these is to get incorporated so you can legally operate your business. While this seems complicated, it could be relatively straightforward.

All you’ll have to do is find the right structure for you, such as a limited liability company or sole-trader. After that, it’s a matter of filling out some paperwork and registering with the appropriate organizations. While it might take a little bit of time, it keeps you legal from the start.

5. Open A Business Bank Account

No matter what kind of company you own, it’s vital you have a bank account specifically for that. You shouldn’t have your personal and business finances intertwined, as that could lead to various problems.

Thankfully, opening a business bank account is relatively easy once you’ve sorted out the legalities. Once you’ve registered your company, all it takes is choosing the right bank account for you and filling out some paperwork. Only once this business account is open should you start accepting payments from clients.

6. Define Your Brand

A strong brand helps you differentiate yourself from your competition. With how many other contracting businesses there are out there, you’ll need to put a decent amount of effort into this. Developing your core values and what you want to be known for are parts of this, and often the first step to take.

After that, it’s a matter of figuring out how to communicate your brand to potential customers. A high-quality logo, the right marketing campaigns, and proper messaging are all parts of this. The more time and effort you put into this, the more memorable your brand will be. You should get more customers because of it.

7. Get The Right Equipment & Software

You’ll need quite a bit of equipment and software to do your job, but that goes far beyond the basics of what you need for a project. You’ll also need to consider the various bits and pieces you need to oversee and actively manage your business. Some of these are more important than you might’ve thought.

From accounting software to field service management, consider quite a few areas when you’re going over this. While they might take a little time and money to invest in them, they’ll be more than worth it long-term. At a minimum, you’ll run your business more effectively.

Pitfalls To Avoid When Starting A General Contracting Business

Each of the above steps are essential when you want to start a general contracting business. That doesn’t mean they’re all you’ll need to know when you’re starting off. Instead, you might want to avoid a few common mistakes and pitfalls when you’re starting your general contracting business.

Some of these are more common than you’d think, and can be relatively easy to fall into. The largest include:

• Not Considering All Costs - A general contracting business has quite a few costs involved in it. These go far beyond payroll, materials, and similar expenses, however. Some could be easily overlooked, like training courses and marketing. Make sure you consider them when you’re starting off.

• Overlooking Work/Life Balance - Quite a few budding entrepreneurs have fallen into the trap of making their company all-encompassing. They’ll spend most of their time running it and trying to get it to grow. That comes at the expense of their life outside of work, which is actively harmful. Get your work/life balance right.

• Over-Relying On A Handful Of Clients - You could have several clients that consistently give you work, but that doesn’t mean you should focus solely on them. The moment one of them no longer needs you, you have a cash-flow problem. Diversify your client base so this doesn’t happen.

By knowing about the most common pitfalls when starting a general contracting business, you can much better avoid them. While it’ll take a little time and effort, it avoids a lot of hassle and stress in the long-term.

Start A General Contracting Business: Wrapping Up

It’s never been a better time to start a general contracting business, as there are plenty of opportunities to capitalise on. With a little bit of effort and information, you’ll set yourself up for long-term success. Make sure you take the right steps when you’re doing so, as you’ll lay the right foundation for your company.

Add in knowing about the major pitfalls to avoid when you’re starting your contracting business, and you’ll be in a great position. Not only should you see success, but you’ll have a sustainable and long-term contracting company before you know it.