Contracting companies entering the business world require essential tools, and with the construction industry’s gradual rise across the next few years, private and non-residential construction will likely experience an increase in barriers due to an influx of entrants.
Home improvement businesses, construction companies and contracting businesses can utilize several basic strategies to perfect their business plan, and there’s a few aspects to creating an effective plan that companies should be aware of.
Incorporation and Registration
When making a business plan, and when a contracting company is starting out in the business world, proper registration is required with the correct governmental agencies. Companies should become insured, bonded and licensed, and they should protect themselves and their clients by issuing permits. Most contracting and construction businesses require these licenses to legally operate, and a typical tradesman license is always required for plumbing, electrical, gas fitting and HVAC trades.
Know the System. Know the Regulations
Every contracting company should understand industry construction regulations like workplace safety regulations and energy efficiency standards. The construction industry, in particular, is very regulated, and new business starting out should maintain a firm grasp upon the various laws.
Nurture a Safety and Health Plan
Base-level industry workers must be provided with a safe workplace, and recognized hazards must be eliminated. Many online resources are available for a company’s compliance, and every business plan should include training, on-site consultations and other safety mechanism within its workings.
Hiring labor is arguably an initial step for many contracting companies, and the construction industry normally secures workers from several sources: hired employees, subcontractors, independent contractors and labor brokers. Often, laws are flexible to each situation, and, when hiring workers, a company inherits obligations like wages, taxes, employment law compliances, benefits and more.
Although no current laws governing subcontractor relationships currently exist, industry leaders should draft contractual agreements to ensure they are bonded, licensed and insured. Those engaging brokers to locate labor will pay the broker directly, and those hiring independent contractors will follow suit. Self-employed individuals are responsible for their own taxes, however, over-arching contracting companies are not responsible for withholding taxes.
Creating a firm business strategy is the primary step to ensuring a company’s success, provided the above areas are covered. Company decision makers must remember to adhere to laws and regulations, and they should take advantage of the basic steps required of any entering contracting company:
Proper registration and incorporation
An effective health and safety plan targeting all individuals
Hiring effective labor, and knowing regulations adhering to each source
Understanding barriers of market entries and organizing a proper entrance.