Daily Archives: October 17, 2014
Are you one of those people who are interested in starting their own construction company? But before opening your own construction business, you have to take note and understand that you will need a lot of groundwork for this to happen. You will not only have to think about the money that you have to shell up, but also the amount of work that you will need to complete a project. And like any other business, you should come up with a framework of the things that you need to identify and organize when it comes to starting up your own construction business. This is also applicable even to small construction business that you might be planning to start. Organizing your Business Plan When planning to start up your construction company, you have to organize your business plan. You have to determine your company’s name and start consider whether you would want an LLC or a Subchapter S Corp. This way, you can be able to protect your personal assets better in the event of lawsuits or claims against your company. Using an LLC or a Sub S will also have its tax advantage. Your business’ revenue or loss is passed through to you and other co-owners to report a normal generated income. Open a Bank Account After determining the name of your construction company, the next step is to open a bank account under your company name. This is where all the revenues being received and all the expenses should be paid out by your company. It is not advisable to co-mingle your personal bank account with your company account. You can only use your company bank account to pay for your company’s bills and never for your personal expenses. Company Insurance An insurance is one of the most important asset of your construction business. You should secure an insurance for General Liability and Auto/rental equipment in your company’s name. This will help your company to be more protected against claims regarding personal injury and property damage. An insurance will also provide you with legal defense against that claims being charged to you. You can talk to a business insurance agent to help you with your options regarding your company’s insurance needs. You should also try securing Workers Compensation insurance for you and your employee. There are times when clients do not allow a construction company to work with them at their jobsite unless you have secured a proper insurance and can be able to provide insurance certificates for each policies required. Startup Money Any kind of business cannot run without funding. It would be difficult for a newly established business to borrow money just to get the business going. You need to have enough money that you have saved up solely for the reason of starting a construction company. This is why a lot of people are using their own savings to start a construction company. If you need more money source, you can also ask for funds from investors or loan from your relatives and friends.