If you are looking into starting a small contracting business, you might feel like you’ve taken on a huge task. Even for a small contracting business, there is a ton to consider. Where will your business be located? What services will you offer? Will you have employees?
It can be overwhelming and perhaps even discouraging to try to juggle all this new information all at once. However, you are capable of achieving your dreams. You know your business better than anyone else and that starts you off with a distinct advantage.
When going through this process, lean on what you know, ask for help and take things step by step. You don’t need to try to tackle this entire project by yourself all at once. You can take the time you need and ensure your business will be all you’re dreaming of when you start up.
Here, find 6 tips for starting a small contracting business so you can make your dreams a reality.
1. Figure Out Where You Will be Based
Some contractors do their work right out of their home and don’t need any more than that. However, many do set up an office of some sort.
If you are thinking you’ll need an office or workspace, that is one of the first things you should consider while starting a small contracting business. That’s because this could be a large part of your monthly budget, especially when you’re first getting started. An average security deposit is an entire month’s rent, so that means you need that much more extra cash right from the get-go.
Additionally, monthly fees are not just going to be the rent. Utilities, trash, water, electric and all the rest will add up as well. Try to factor in all of these additional expenses when thinking about whether or not you want to get an office space.
If you do want to base your business out of a separate building, you will need to search for commercial property for sale in your area or the area you hope to serve. One of the reasons to get an office could just be to be closer to your target client base. If your home is not convenient for the work you hope to do, renting space closer to your customers can make a big difference for your business.You might also rent simply to have space to operate in. Some types of tools and work fit well with a residential home. It might not be possible for you to do what you need to without some separate space for it.
If you are very fortunate, you might be able to use your home while starting a small contracting business and delay renting or never rent at all. You will probably need a garage or basement to really make this viable, however.
If you are using your own garage, ensure it is in good condition for your work. If you need services like commercial garage door repair do that now, before your business is underway. Having to make repairs after you’ve already gotten started can slow your budding business down to a crawl.
2. If You Are Renting Space, Ensure It Meets Your Needs
The same goes for a space you rent, however. It isn’t just your home that you should look at closely before using it for a business. Any space you might rent for your contracting business should be one that will suit your needs.
Even if your needs are rather simple, it doesn’t hurt to take a close look at the space. Inspect things like the roofing, electricity, and plumbing. You don’t want to just be getting settled in and then find you need commercial roofing repair or plumbing overall. That could add a massive expense that sinks your business before it gets a chance to swim.
You should also ensure you’ll have adequate space. If you need to store or use large pieces of equipment, work out those logistics before committing to a lease or rental agreement. List out everything you’ll need after starting a small contracting business in order to keep it going and check that list against the facilities the space itself offers to ensure you’re covered.
3. Figure Out What You Do Best and Find Your Niche
OK, so you have a space now, or at least know what you need out of a workspace. Now it is time to figure out what you do best.
This step obviously overlaps with all the rest and you probably already have some idea. However, the thing that could put you ahead at this stage is identifying a niche that you could fill. If you are a roofing contractor, for example, you might notice lots of competition in your area. So what sets you apart? Do you have more experience? Have you worked with niche materials? Roofs aren’t just tiles and shingles anymore. If you have experience with green roofs, solar panels, or other newer materials that could put you ahead of your competition.
A lot of the fields you might go into to be a contractor are very broad. It doesn’t hurt to be a generalist and thereby widen your potential client pool, but having a specialty is helpful as well.
Electrical and plumbing are good examples of this. Both of these fields are extremely broad, which means that often clients have trouble looking for the specific thing they need. That could mean they spend a lot of time searching or never quite find the precise thing they are looking for. If they were to discover a contractor who focused on their issue, in particular, they might be more inclined to hire that person.
In practical terms, this might mean, for example, a plumber who knows a lot about pneumatic plumbing or weatherproofing or some other field. This would help a client with that particular need find your business as opposed to someone else’s.
4. Sort Out How Many Employees You Will Have and What that May Mean
If your small business isn’t just you, you might need a couple of other contractors to help you achieve your goals. If other contractors are working for you and not just with you that will be an added complexity that you need to factor in while starting a small contracting business.
For example, you will need to figure out how you will pay those employees you now have. Contractors are often freelancers and you can work together as independent contractors. However, if you are responsible for paychecks you will probably need legal help getting that setup and ensuring everything is correct.
You also may need to think about health care. This is true even if you are working alone. How will you handle your and potentially other’s health care? When you are an independent contractor, you often have to buy your health care on your own. That can be an expensive prospect. It is always worthwhile to shop around when you are looking for health care.
Another complication is that your work as a contractor does come with risks and dangers. It is not like sitting in a cubicle for an office job. Your health care costs could be higher than those of other people simply because of the nature of your job. However, if there was an accident or major injury, you’d find you were very grateful for the additional coverage.
Don’t forget to factor in the dentist when looking at these kinds of considerations. Dental care is often not included in standard health care packages. You may need to add it separately as an addition to whatever you already have. However, taking care of your teeth is crucial to your overall health so you don’t want to skip it just to save a couple of dollars while starting a small contracting business.
However you plan to go about your work, wages, and health care should make it onto the list of things to research before you start up. These will prove significant costs, but they are also critical to the safety and well-being of yourself and anyone you might be working with.
5. Get the Equipment You Need
You should also figure out what kind of equipment you need before starting a small contracting business. Buying equipment may prove a huge upfront cost so you certainly want to get it taken care of as quickly as you can.
Maybe you are already an established contractor and therefore already have a lot of the equipment you need. Even if that is the case, you should check the age and status of your equipment and assess whether you are lacking anything you might need. These kinds of costs can be unpleasant surprises if they pop up after you already started your business. Don’t let them ruin your carefully planned budget.
Maybe, on the other hand, you know you need to invest in some equipment while starting a small contracting business. That is perfectly fine. Just do your due diligence with your budget to ensure this cost won’t sneak up on you.
You should also shop around. If you are looking for something like compressors, don’t just take the first offer you find. Be a discerning shopper and try to get deals wherever you can. If you need to buy something in bulk you may even be able to negotiate a lower price because of that.
There are also pieces of equipment that you didn’t need before but do need now. Perhaps you’re opening a physical location for your business and find you need an ice block to help with storage now. Or maybe you are working alongside other contractors now and they need equipment you didn’t require. Whatever the case, planning ahead will save you time, hassle, and probably money.
6. Seek Help When You Need It
Finally, don’t be afraid to ask for help. Starting a small contracting business isn’t an easy thing. You don’t have to go it alone, even if you plan to do most of the work by yourself. It is not only OK to ask for help – it’s good. It can save you headaches and build up a network you trust in the meantime.
Plus, there are some things you simply can’t do alone. Maybe you need help moving. Maybe you need advice about equipment to buy. Maybe you want to know how other contractors in your area operate and what has worked for them.
Don’t be afraid to ask. You may be surprised by how willing other contractors are to help.
There are also times when you will need professional assistance while starting a small contracting business. For example, you might need help with tax law or other areas of the law. Legal matters can get very complicated very quickly so definitely reach out for help from a professional with anything of that nature.
You could find you need legal help that goes beyond what you expect as well. For example, a personal injury law firm might be something you now need to research due to the dangerous nature of some contracting jobs. You could have insurance and injury concerns that require the wisdom of a legal professional.
It doesn’t need to be something as dramatic as an on-the-job injury, however. If you have started to commute more, it could even be things like metro accidents. All that extra time in your car or truck could increase your risk of an unfortunate accident and that’s not a situation you want to try to handle on your own.
Starting a small contracting business is not an easy or quick process, but for many contractors, it is well worth the work. Take your time and be diligent in your preparation and research. Know what your costs will be and where you will need the help of professionals to get your business started. If you do your due diligence now, you will reap the rewards when your business gets up and running smoothly. And remember: There will always be bumps in the road. Stay flexible where you can so you can ride out those bumps and keep moving forward toward your goals.