Starting a construction business is unlike starting any other kind of business. The reason why it is such a challenge is because there a lot of startup costs involved. Indeed, it can be quite costly to start any business, but construction takes the cake – not only do you need expensive permits, but you also need heavy duty tools and machines to complete your jobs. When it comes down to it, though, if you have the startup capital – perhaps from an investor or a pooled source of startup cash – starting a construction and building company can actually be quite rewarding. Here are some of the pros and cons of starting a construction business.
One of the biggest pros is that there is a big demand for new construction companies. As the economy rebounds, many developers are green lighting new projects, as well as old projects that were on hold during the recession. Starting a construction company now will position your business for massive growth in the next five years, which could garner a huge amount of success in the industry.
Another pro is that competition is healthier in the construction industry, especially because of niche specialties. For instance, some companies specialize in green building and other companies specialize in more large-scale industrial building. This will not only allow you to pursue your specific construction dreams, but it can place your new company on a better track to success. For instance, specializing in energy efficient building construction is growing in popularity. If you have a love for green design and minimalism, this unique niche may be perfect for you. Who knows, you may be able to find another niche that suits your dreams and ambitions even better.
A big con, however, is that there are large startup costs in starting a construction company. Most construction companies need expensive permits, licenses and insurance policies. These costs can run the gamut and cost a tremendous amount of money – money that some people may not have access too. Then again, if you do have an investor or a source of cash, there are ways to get creative. For instance, if you are working on a project in Los Angeles, you may want to research LA cranes for rent. Renting equipment on an as-needed basis can be a lot more affordable and can lessen the burden of your startup costs.
Lastly, a big con is that there is a lot of risk for injury in the construction industry. When it comes to workplace injuries, more people are hurt on construction sites than anywhere else. Whether these injuries are caused from falling or from malfunctioning machinery, you have to be prepared for the inevitable. With that in consideration, you want to make sure that your company has liability protection, which means that you need to hire the expensive services of a lawyer. Again, if you have the money to support all the costs involved in starting a construction company – eventually it will all become very profitable and it will definitely be worth it.