Numerous people believe that owning your own business can limit your work-life balance, but the actuality of this is that starting a business can be challenging, yet exceptionally rewarding. For instance, if you have a passion for construction and construction management while also envisioning yourself starting your own construction management business, then this may be the right career path for you. It is important to note, though, that construction management goes beyond the day-to-day project construction process. Construction management oversees the entire construction process from start to finish for all projects, both large and small scale. This guide will provide you with the best methods for how to start your own construction management business.
Decide on your niche of construction
Numerous people can frequently connect project management with construction management, though these two fields are similar yet different industries. Construction management is comprised of designing, bidding, equipment management, monitoring of sites, administration, and several additional areas, all specific to construction. For this reason, when developing your niche process, you’ll want to understand the difference between these two industries. Here are some examples of business avenues to explore for your construction management business:
Commercial Construction – commercial buildings, typically larger structures, requiring more financing and building equipment, different materials, and more workers.
Residential Construction – small buildings, such as homes, requiring fewer workers and involving different types of permits and regulations than commercial construction.
Remodel Construction – construction revolving around existing structures and a few workers necessary versus a larger team.
Subcontracting – consists of one person specializing in a specific construction category, such as an electrician or a plumber.
It is valuable to note that many areas of a construction management business will likely work with a good amount of subcontractors, as they are the most specialized of the construction project process. Deciding which area of construction you want to focus on is crucial to get started on your future construction management business.
Analyze your local market
Deciding that you want to start your own construction management business is the first step in the process of creating and planning your business. Construction is a booming business to go into, but it is imperative to research and analyze your local market to ensure better success for your business. After deciding what niche of construction management you want your business to focus on, doing market research for your target market, you intend to start your business.
Once you select a target market, you’ll want to focus your business within several areas. You will want to conduct your market research to set your future business up for success. Some of the focus areas to analyze for your selected market are:
- The number of additional local construction companies operating in the area.
- What other expertise that other construction companies specialize in.
- The average cost that other construction companies in your area charge.
- What the reputation of competing construction companies are, such as they are easy and efficient to work with or challenging to work with clients.
In addition, if you are not sure where to research this information of your target market, start by looking at SBA (Small Business Association) and BBB (Better Business Bureau) information of potential competitors. Also, ensure you do your market research on your potential customer base of the average age, income, interests, and how many potential customers there may be in that market. Taking the time to research your target market will help write your business plan and provide you a better advantage for when you finally start your construction management business.
Write a business plan
Writing and developing your business plan should follow after you have decided on your niche of construction management and researched your target market. You’ll want to ensure this information is structured into part of your business plan for your construction management business. Part of the areas you’ll need to address in writing your business plan should include the following information:
- Your intended structure and management of your business
- The kind of services you plan to provide
- The types of projects you plan to bid on
- Your target market
- The average number of employees
- Your marketing plan
- The estimated cost of beginning and maintaining your business
License, insure, and finance your business
Once you have put together your business plan, you will want to begin the process to start your business legally. This process will include registering your business with state and local governments, trademarking your brand name and logo, and an EIN (Employer Identification Number) for employment tax purposes.
After legally establishing your business, you will need to secure and ensure your business and any assets or liabilities. One method to do this is to source workers’ compensation and limited liability insurance for your business. Doing so can protect your construction management business in the event of any on-the-job site accidents or issues that could occur.
Finally, after legal steps have been taken, you should consider financing for your construction management business. You have the ability to get creative when sourcing the funding for your new construction management business. You can inquire into small business grants, small business loans, construction business loans, private lenders, and even investors.
Starting a construction management business does not have to be viewed as a challenging business to be created. If you have a passion for construction and construction management, the capabilities to begin are at your feet. Taking the time to research and be resourceful on how to get your construction management business started will set you up for better long-term success.
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