In pursuit of creating a successful construction business, you must initially undertake a detailed, thoughtful process involving a large amount of research and planning to build your business plan. Two of the vital components of your plan discussed throughout this post are mentors and market research. Adopting a careful and conscientious attitude towards the planning and launch of your business will enable you to possess a higher chance of surviving the 8 out of 10 business failure rate in the economy and, by working through the steps below, you will gain insight into two of the sections that will help you initiate a successful construction business.
Mentor and Experience
According to UPS, the confirmation of hiring or appointing a mentor improves the success rate of your startup business significantly, which is why this step should not be overlooked.
‘Confirming the importance of mentors, 70 percent of small business owners that receive mentoring survive for five years or more, double the rate of those who do not receive mentoring’. – UPS store
If you’re wondering how to acquire a mentor, there are in fact a whole host of volunteers online who offer these services. For instance, websites such as Micro Mentor Will list available mentors, their experience and expertise for you to preview. It’s essential to source experience and knowledge from those who have run their own businesses to help you avoid mistakes where possible and give you advice when you need it most.
Coupled with hiring a mentor, if you have no experience of working in the construction industry it would be in the best interests of your budding business to attain some relevant work practice within the area of construction you wish to launch your venture. Acquiring experience will provide you with a wealth of know-how on the job, specialist industry knowledge and experience networking with clients and construction business owners. Background in a construction job will also help you solve problems and solve and reduce risks in your current business endeavors. Not to mention you may be offered to complete qualifications to improve your skills, thus more knowledge for you to add on your entrepreneurial quest for a construction business of your own. Working for an established company that works in the niche you want to create your own business, will essentially give you inside knowledge and the ability to use this to your advantage when you decide to form your own company.
If you’re uncertain of the type of construction business you’re interested in establishing, the next section on market research will provide you with more information on how to decide which sector in construction will be the most lucrative.
Market Research
This section is paramount for all businesses to undertake no matter what industry you are in. Here are some of the essential areas you should be conducting primary and secondary research for your venture;
Construction business niche
Here are a few examples for you to choose from; Building extensions onto domestic properties, building for the private sector such as office buildings, or creating residential properties and selling the houses on for a profit.
Competition
As mentioned above working for a company within your desired niche will give you an edge when creating your own construction business. When you are conducting research on your competitors you should; research the success of the niche you wish to pursue, the number of competitors, whether there is room in the market for your business. If the market you were hoping to tackle is saturated, you will need to consider a different niche.
Public opinion
Assessing the views and advice of those who live in the vicinity you wish to market your services too will enable you to establish whether there is a demand for your business within the area. For instance, if you were hoping to build extensions, however, most of the properties near you are listed buildings which are unable to accept extension work, you may need to search for an alternative niche where there is demand.
Identify gaps in the market
When you are forming your research, it’s essential to find whether there is a gap in the market your business could provide construction services to. For instance, if there is a high demand for housing in the area you are located in or wish to work in, however, no builders who are building new houses at the moment, there may be a gap for your business to begin building houses.
Equipment and materials
From your experience working within the construction niche of your choice, you should have possessed some knowledge on the type of equipment you will require. Survey your local construction equipment providers and scour online resources and attain prices for purchasing equipment directly from Equify Auctions. You will also need to discover the availability of vendors for work attire for contractors and employees, alongside assessing available wholesalers and suppliers for building materials.
Picture by PhotoMIX Ltd.
Is your business idea profitable?
This an essential part of your market research process to establish whether or not you are able to make a healthy profit and when this is likely to occur. For example, those wishing to construct a business building office blocks, you will need to assess the following;
- Who would buy the buildings from you?
- Is there demand for new office blocks?
- What do other office blocks cost in your area?
- What are the margins for making a profit when considering the amount it will cost to build the offices? For instance staff (architects, contractors, engineers), materials, equipment, tax and so forth.
This guide identifies a part of your journey for starting a construction business to enable you to acquire specialist knowledge about your chosen construction niche and the areas to research to establish whether or not your company has the potential for success, to make a profit and to establish when this might be. Refrain from feeling disheartened if your original idea didn’t work out as expected in light of the research you conducted, and remain open to revisiting and adapting your business concept to suit the current market to move forward with your plan for launching a construction business.
