Construction business owners have one of the most rewarding, yet demanding jobs around. They receive the fulfilling feeling of seeing a project go from paper to commercial buildings. But, they also have to deal with all the responsibilities of a construction company.
When building a house or commercial property, there’s not a lot of room for error, especially when it comes to compliance management. Construction company owners must make sure that their projects are completed correctly otherwise people’s lives are at stake. To properly handle the role of a construction business owner, there are several skills required to be successful. And even if you have the skills, you still have to decide if the salary is worth it or not.
Experience Is Essential
Construction experience is essential to owning your own construction business. It takes special expertise to understand all the different aspects of building new projects or renovating existing ones. This a bit more in depth than starting your own handyman business. Additionally, you will want to have a strong foundation to understand what your managers and employees are doing.
Management Skills Are Helpful
Project planning and management skills are very useful in the construction industry. Since most projects begin as designs in the minds of architects, and then go to construction companies for building, it is important to be skilled in project management. An added bonus to be a skilled project manager is decreased lead-time and on time project deliveries.
Legal Preparations Are Crucial
If you want to open a construction business, you need to be prepared for the legal risks that come with construction work. You may even want to retain a business attorney for your new construction business. Local laws govern construction codes. You will need to do a lot of research beforehand to prepare. That is the only way you will protect your business from any potential liability regarding compliance requirements and potential construction issues down the road.
Budgeting Can Make Or Break You
Financial analysis and budgeting can make or break a construction business. Many projects require the estimation of budgets for labor, materials and profit. When bidding for commercial construction contracts or residential house building deals, the business owners need to have financial control in order to make a profit. If they do not estimate or budget accordingly, they could end up taking a project at a loss.
Communication Is Key
Customer relationship management and communication skills are key for the role. As a construction business owner, you might find yourself dealing with clients who have demanding needs or the IRS who have 1099 tax deadlines. In addition to keeping relationships strong, the business owner also has to communicate with them about the progress of the project along with any difficulties that may have arisen.
Furthermore, construction business owners have to be compensated for all the risks involved, insurance on the business and the hidden costs of managing managers are employees. While the average business owner salary is $68,000 (American Express OPEN), you can expect the salary of the construction business owner to be much higher because of the skills and risks involved. The average construction business owner salary maybe under $100,000 dollars, but the profits of their business may earn much more. Some construction businesses earn as little as $50,000 but also upwards of $1,000,000 in profits for their owners.
Creating A Construction Business Plan
If you want to have success in the construction business, you are going to need to create a business plan. The only way to avoid this is to open a franchise, like a Servicemaster franchise or similar. The first step to creating a business plan for construction, or any other industry, is determining your business values and vision. Determining these things will prepare you to create your company mission. This is the first step to creating an effective business plan, which will help you secure investors and help guarantee success for your business down the line. So if you want to start your own construction business, determine your company values and vision to create a construction business plan. This is a crucial first step.
Image from http://constructionprojectmanagementpro.com/tag/project-owner/