The real estate market might not be seeing its best days in 2019 right now, but the construction industry remains a lucrative field for an entrepreneurial venture all the same. The United States has one of the largest and fastest growing construction industries in the entire world, with expert predictions indicating that new constructions worth 1.4 trillion USD will be erected by the year 2021.
Now is as good a time as any to get into the field with a small venture of your own, but before you start working towards building that business, it’s probably a good idea to go through the following and make sure that you properly understand what you will need to get started in the US construction business.
A Civil Engineering Degree
If you do not have a degree in civil engineering, you will be at a constant disadvantage in this field. Successful entrepreneurs in any sector usually have intricate knowledge about the actual work that they are trying to build a business around.
Even if you are the one with the funds and the brain behind the business, you will always be a step behind the competition, since a heavy reliance on qualified civil engineers will become inevitable. Your employees will have to take major decisions on their own because you won’t be able to provide any guidance to them regarding the actual building process.
Being left out of the core processes of the very business you founded is not a nice feeling, so once you have an online civil engineering master’s degree under your belt, it will make a world of difference. The online civil engineering Masters degree from Michigan Tech, for example, can be completed in just five semesters, but it can also be flexibly adjusted according to your own busy schedule.
Also, it will put you at an advantage while filling in tenders, because a construction business owner who is a civil engineer himself/herself is certainly impressive.
Experience is Extremely Important
Experience is not always necessary to make it in the construction business, but does it help? More than one can describe!
Experience in construction will help you to avoid practical mistakes that would otherwise be an inevitably painful part of the whole learning curve. Sure, your civil engineering degree will help a great deal, but it cannot always prepare you for real life scenarios like actual experience can.
We are guessing that since you are considering this particular field, you already have a decent bit of experience, but just in case you don’t, consider spending some time in the business as an employee or maybe just as an observer, if you have a contact in construction.
For those that want to start immediately and do not have enough experience, the tip would be to hire people who have sufficient experience in the field and let them advise you.
Calculate Your Budget with Accuracy
Starting a construction business is not going to be cheap and you will need to take loans for the initial investments such as renting an office space, buying office equipment, paying the employees and buying the basic construction equipment.
However, it’s probably going to be a lot cheaper if you just rent your construction equipment initially. This applies particularly when it comes to the larger machines that could each cost hundreds of thousands of dollars. Eventually, you may have to buy your own equipment, but do so one at a time and only when you are ready to.
Even if you rent most of the stuff, you will need funds and it is extremely important that you calculate the amount of money you will need for your construction business’s initial setup with accuracy. A miscalculated budget may topple the whole venture and leave you bankrupt with a huge loan on top!
Instead of taking big loans at once, you can adopt another strategy that is becoming increasingly popular with both big and small construction businesses. The idea is to take smaller, short-term loans, based on the budget estimations for the project or projects that you are about to undertake. If the assessment of the expenses, the interest rates and the profit margins is accurate enough, you will be able to repay the loan and make profits, roughly by the time you are done with the project.
Once again, accurate calculations are extremely important, so you may want to hire an accountant to help you with this. Getting it wrong will put you in debt and, once again, the scenario of going bankrupt will become quite likely!
Insurance, Permissions and Licensing
It should go without saying that in order to open a construction business, you will need appropriate permissions, licenses and insurance as well. Some states do not require a general contractor to have a license, but insurance for the workers and the business is a necessity, especially since accidents in the field of construction are almost an unfortunately regular affair.
Instead of buying, hire protection equipment for your workers, specific to the project that they will be working on, but do not skimp out on the quality of the protection or the comprehensible nature of safety the equipment provides.
Even when the state does not require you to have a general contractor’s license, applying for building permissions, maintaining state-specific building codes and adhering to other formalities will be necessary, so make sure you understand the state regulations first, or it will cost you big in hefty fines. Construction is a complex field, albeit a highly profitable one, so take it slow, understand the business well, and build contacts. It will help immensely if you have a civil engineering degree, as everything will make a lot more sense to you and you will be able to innovate in ways that you just cannot without the core knowledge about the science behind the business. Not that it’s a necessity, but just by completing that online civil engineering master’s degree, you will definitely be giving the business a huge step forward.