You do not necessarily need to be a genius with tools to start a construction business. However, you do need to be prepared to put in a lot of effort and work long hours; 12-14 hour days are not unusual. It also helps if you have training in areas such as building or plumbing, or have at least started training before you set up the business. As we said, you do not need to be a genius, but the more all-round knowledge you have the more likely you are to succeed.
Your ultimate success is also greatly dependent on having the right financing in place. You are unlikely to have the required amount of spare cash at your disposal, so you need to optimise your use of the funding opportunities that are available.
Checking to see if there are any grants available
It’s possible that grants may be available to help with the setting up and growth of your business. Set up grants are less common than funding for costs related to growth such as marketing, employing people and the purchase of equipment. You can take a look at the available advice to see if you may be entitled to this type of financial help.
Arranging debt or equity finance
There are two types of finance that you can arrange for your business; debt finance and equity finance.
Debt finance is the securing of a loan which has conditions attached that dictate how and when the money should be repaid. The advantage to this type of debt is that it leaves you in full control of the business. However, you can encounter serious problems if you are unable to make payments at any point.
Equity finance involves getting money in return for providing a share of your business. You do not owe money so there is less risk of bankruptcy but you do have to share all the benefits of ownership with the investors.
If you speak to a specialist in corporate finance they can tell you what your best options are. Getting this type of advice helps to reduce the risks involved with using finance.
What else do you need to think about?
Finance is not the only thing that you need to think about if you are starting a construction business. The government provides advice about areas that you need to consider. This includes the necessity to conduct industry research before you start and to ensure that you have all of the required licenses in place. Another important aspect that you need to pay attention to is what your tax obligations are. If you do not comply with these obligations, you could find yourself facing legal difficulties.
You cannot just rush headlong into setting up a construction business. If you do then you are likely to fail. Make sure that you take time to secure the finance that you need and ensure that all of your legal obligations are being fulfilled.