Starting a company always requires money. Finding that money, and budgeting it to get what you need, can be one of the toughest barriers to starting a business. Construction companies can be incredibly rewarding financially, so you’ll likely get back what you spend, but you still have to have the funds to spend in the first place.
This means that you need to create, and stick to, a strict budget. That can make things more difficult for your company, but it doesn’t make them impossible. Plenty of highly successful companies started with next to nothing.
So, if you’re ready to get going, here’s how to start a construction company when you’re on a budget.
Find Financial Resources
Whether you already have money set aside to get started or are starting from scratch, more money is always welcome. Here are two ways you can boost your budget.
Look For Investors
When you’re looking for investors, start with family and friends. This shows everyone how much you believe in what you’re doing, and you’ll most likely get a better deal.
After family and friends, move on to angel investors. These are wealthy people willing to sponsor companies they believe in so that they can give back, or because they believe the company will be worth something later. Angels will be more demanding than friends and family, but still more forgiving than other sources.
After that, you move into your money-focused sources. Venture capitalists, venture capital trusts, and public share funding are viable options to receive funding, but they only invest when they believe they can make a lot of money.
The agreements you make with these sorts of investors will be more demanding and should be carefully considered.
Apply For A Business Loan
Another way to find funds for your budget is to apply for a business loan. Dozens of loans are available from the federal government including loans for rural development and other types of construction development.
If nothing else, you can always apply for a traditional small business loan to help you get started.
Don’t Overpay For Equipment
Is equipment necessary for construction? Yes. Do you have to buy everything right away? Absolutely not!
One of the best ways to save money when you’re just starting is to hold off on big purchases. Give yourself some time to make a profit before you invest in buying lots of equipment. You can get by with the basics, and you don’t even have to buy those right away.
You can save on your bigger tools by renting them for the duration of your job. That way, if you discover you won’t use a piece of equipment often, you aren’t out the cost of buying and storing it.
This is particularly important when it comes to items like trucks. Work trucks are expensive, and you shouldn’t put out the money to buy them until you’re sure the business is going to do well.
For right now, you can rent ¾ ton hauling trucks. It takes less time than buying, and it’s less of an investment. You can rent them for four months, six months, a year, or however long it takes to get your business underway.
If things don’t work out, you’ll be glad you didn’t buy a bunch of expensive equipment that you have to try to resell.
Create Smarter Work Sites
Creating smarter work sites is a construction trend that’s expected to grow in 2021. This is because technology is making construction safer, faster, and in some cases, cheaper. You can stick to your budget by using technology to drive down costs in several ways.
- Use drones to survey a construction site without having to send in a crew.
- Take advantage of GPS technology to plan the most efficient routes.
- Use 3D printing to eliminate the expense of shipping materials.
- Create your blueprints in a blueprint app to cut down on costly errors by making it easier for everyone to stay on the same page.
Always look for ways to improve efficiency through technology. The less time the process takes, the more projects you can complete.
Obtain insurance
When starting a construction business, you will need to obtain specialist construction insurance. This will help cover your back if there are any problems with clients, employees or damage to your equipment. Unfortunately, there are just some things you cannot foresee. The cost of these issues without insurance can be detrimental to your business. It can benefit your business, and your budget greatly if you obtain insurance to cover the costs.
Starting a construction company when you’re on a budget can be tough. But, if you start with these solutions and add more of your own, there’s no reason you can’t succeed.
