How to Start a Sole Proprietorship Construction Company
If you have construction experience and often think of being your own boss, owning your own construction company may be the answer. While you have the option of forming an LLC--a limited liability corporation--or a corporation, being a sole proprietor is the easiest, especially if you plan to remain a small business, working by yourself or employing only one or two others.
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Instructions
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Research what it takes to own a construction business as a sole proprietor. This could mean reading online articles and advice, reading books from the library or even talking to someone you know with the same or similar business. Learning from the mistakes of others is a good way to avoid your own pitfalls.
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Examine your finances thoroughly to make sure you have enough capital to start the business, and cover any unexpected losses that could occur in the first 6 to 12 months. This includes writing a budget and opening a line of credit for the business. Focus on keeping several months of expenses available in case operating costs are more than anticipated.
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Update any insurance coverage that will protect you, should you get sued or have an accident during a construction project. Without the added protection of an LLC or corporation, your personal assets should be covered, as well as the business.
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Price and purchase any necessary equipment that you do not already have for a construction job. If it is less expensive to rent some equipment--such as an auger for digging holes, for example--prepare a list of vendors that provide this equipment when you need it.
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Obtain all licenses and permits required to start your business. Look at the online government website for your state. If the information is not listed there, call and ask to speak to someone who can advise you. Make sure all paperwork is in place before you officially launch your business, as you do not want to be caught working illegally.
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Write up a contract to be used with customers so that all agreements on payment and labor, as well as the purchase of materials, are clearly spelled out. If possible, obtain one from another company to use as a template.
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Hire an accountant or learn a basic business computer program, such as Quickbooks, to keep track of expenses, mileage, taxes and payroll.
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Join civic associations and apply for a Better Business Bureau accreditation. This will allow customers an avenue of recourse if they are unhappy with your work, as well as show them that you care about your reputation in the community.
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Market wisely. Have a press release written up about your business launch and send to the local papers. A free story could generate a lot of initial interest and business. Use free online advertising services, place small ads in weeklies, and have your friends and family send an email to their contact list. Offer a discount or reward program for word-of-mouth referrals.
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Design a website that shows before-and-after pictures of your work, and offers customer reviews. You may wish to have this done by a professional, or try a user-friendly version that can be found online. Domains and websites can be obtained and maintained for $8 a month on up, depending on the amount of web pages you need to advertise your business.
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Tips & Warnings
Writing a business plan to put your goals and company mission down on paper is a good idea; however, it is not required with a sole proprietorship.
If the business laws in your state are complicated, you may wish to have an attorney draw up your service contract for additional protection.
References
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Comments
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Thanks for sharing...am asking...why is it not required for a sole proprietorship to write a goal and company mission?
