Starting your own contracting business is exciting but you should prepare well before starting any such venture. These steps will help you avoid problems, register your company without any difficulty, and achieve success in your business. Throughout this journey, Smart Business Insurance will be your best partner. Learn the steps involved in starting your contracting business.
Identify the Business
What type of business do you want to start? The options vary widely and cover electrical, plumbing, wedding, general contracting, and other businesses. You must have already decided your business field. You have some training and working experience in the trade you want to start.
Another option is to become the business owner but limit your role to management and hire employees and workers to run your business. It is an expensive proposition and will require a larger investment. Starting a self-employed business is easier and requires a lower investment. Overall, it will depend on your business goal and the investment you can arrange to start your business.
Prepare a Business Plan
It covers a wide range of topics including choosing your company’s brand name, conducting market research, writing the business plan, identifying the products or services you want to offer, and other details.
Each topic requires careful analysis and planning. For example, selecting the brand name is not only about finding a suitable name. You have to check if that name is already taken by someone else. It should be easy to remember and give an indication of what you do.
Market research will reveal lots of data about your target clients or customers. Find out their expectations about the services you plan to offer. This will help you customize your offer and get a good start.
Registration and License
Your contracting business must be registered. You have a few options when it comes to registering the business structure, including sole proprietorship, partnership, corporation and limited liability company. Each one is selected for a particular type of business ownership.
Consult a business registration consultant to learn more. You may already have your licenses to operate in your trade but you may now need some other licenses to run a business. The licenses you need will depend on the type of contracting business you will be running.
Get Insurance Coverage
Never operate a business without getting the protection of insurance policies. Business insurance gives you the financial protection you need in times of crisis. You will be compensated if you suffer damages to your business assets due to fire, accident or other reasons.
Each policy has its own scope and limitations. Read the terms and conditions carefully before signing on the dotted lines.
Before buying any policy, you should check what it will cover. Include the maximum risks that your business might face. You do not want to find out after the crisis that the accident you have suffered is not covered in your insurance plan. Some risks are covered only when you add specific riders. Keep in mind your premium paying capacity when taking a policy and adding riders.
A surety bond will help you get more credibility among your clients. This bond provided by a third party guarantees the clients that the contractor will fulfill the contract obligations.
Prepare the Marketing Plan
Sometimes marketing is the most important thing for a new business. Unless people know about your business, they will not contact you for your services. Include both offline and online marketing strategies in your marketing plan. Take the help of professional marketers to market your business.
Your digital marketing plan will include establishing your company’s website. It should look professional and provide all information your customers likely want to know about your business and services. Keep aside a part of your investment money for marketing. Advertising and marketing are ongoing processes and require regular funding.
Choose the Right Location
This is especially necessary if you are starting a contracting business that customers will visit. For some types of businesses, the location is so important that it can make or break their business. However, with some businesses, you can run your company from a location away from the main business area.
It all depends on the type of contracting business you are planning to start and your target customers or clients. Be careful in renting any place. Explain to the property owner your business nature and what you plan to do. Hire a real estate agent from your side to protect your interests in the rental contract.
Secure Your Funding
You should first figure out how much money you need to start your business. Money is needed for buying products and services, renting the business place, and paying to the employees, marketing agency, and other contractors and professionals.
You should always keep aside a small amount of money for unexpected expenses that are bound to come up when starting a business. You will avoid facing any financial crisis or getting stalled at a critical juncture because you invested all your money in starting your business. Spend every penny wisely but do not hold back yourself where it is necessary to spend.
When it comes to buying business equipment, explore various acquiring options including lease and rental. Outright purchase of equipment is always the best option because you get full control over your equipment but when you are short on investment, choose a lease or rental option that will help you preserve your investment money for unexpected expenses and business growth plans.
