Every year in the USA, there are hundreds of thousands of new businesses being started. Among the available choices for entrepreneurs are construction companies. While a construction business can be lucrative, it can also be a lot of work.
You need to make sure you have everything covered. This goes from general things, like ensuring you have a well-trained staff, to more specific things like making sure all of your machines are properly outfitted with hydraulic hoses by CTP or another high-quality provider. Not making these considerations can be a big mistake for your company.
With that in mind, let’s look at some other mistakes you should watch out for when starting a construction company.
Doing It With Loans Alone
Starting a construction company is far from cheap. While some businesses can be started with a computer and a bit of software, that isn’t the case with a construction company. You will generally need to spend thousands of dollars to buy, lease, or rent the necessary machinery or tools. The costs can go even higher if you offer more services and/or need to hire and train staff.
While getting some loans is fine, and will almost be required in most cases, you want to be sure you aren’t starting the company purely off of loans. If you do, generating enough cash flow (especially early on) to make the loan payments can prove difficult. It is best to save up a bit before starting the company to ensure you aren’t fully reliant on loans.
In a similar vein, never start a business, construction or otherwise, without creating a business plan first. The more legwork you can do ahead of time, the easier running and operating your business successfully will be.
Getting Stuck in Poor Contracts
The name of the game when it comes to getting construction work is contracts. You never want to do any work until there is a contract in place to protect you. However, while contracts are great, they can also be crippling in some circumstances. Some contracts you find yourself in can be quite bad for business. This could be a contract with too much work for the price, confusing or vague terminology or problems surrounding potential liability.
If you find yourself stuck in a poor contract, it can prevent you from taking on other work and could hurt your business for weeks or potentially months. As a result, you need to read through every contract thoroughly and make sure everything is understood, from the amount you’ll be paid to what is expected. Breaching a contract after it is signed can land you in trouble, so always get the full story before signing the dotted line.
Offering Lackluster Customer Service and Communication
While the work your company does is obviously the most important thing to think about, you also need to consider how you treat your customers. Customer service plays a very important role in all businesses. If people have a bad customer service experience, it can have terrible outcomes for your company.
You need to be quick to answer any customer or client questions and help them with any construction-related concerns they may have. Your company should be professional throughout the process and respond to clients quickly with useful information. Great customer service can lead to a strong reputation and loyal customers who will tell others about your services. Be sure to keep communication channels open as well, to ensure clients always know they can reach out.
In conclusion, if you can avoid these mistakes when starting a construction company, you will have a much better chance of success.