Start A Construction Company
About
Starting a construction company requires a great deal of effort, dedication, and most importantly passion.
If you're interested in how to sell construction, or selling construction online, you can use this page as a guide for everything you'll need to know.
Want to learn more? You can check out our full guide on how to start a construction company ➜
Key stats
Startup Costs
| Min Startup Costs | Max Startup Costs | |
|---|---|---|
| Office Space Expenses | $750 | $7,000 |
| Employee & Freelancer Expenses | $151 | $352 |
| Equipment & Supply Expenses | $566 | $5,700 |
| Website Costs | $303 | $7,215 |
| Business Formation Fees | $5,600 | $20,400 |
| Inventory Expenses | $300 | $10,000 |
| Specific Industry Expenses | $500 | $4,000 |
| Vehicle Expenses | $2 | $10,004 |
| Other Expenses | $0 | $2,300 |
| Software Expenses | $162 | $3,094 |
| Advertising & Marketing Costs | $75 | $4,786 |
Successful Businesses
| Business | URL | Rank | |
|---|---|---|---|
|
The Blue Book | thebluebook.com | #36,995 |
|
Construction Review Online | constructionreviewonline.com | #76,585 |
|
ConstructionPlacements | constructionplacements.com | #84,000 |
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|
Dodge Data & Analytics | construction.com | #91,668 |
|
Construction Dive | constructiondive.com | #94,425 |
|
|
Building Design + Construction | bdcnetwork.com | #104,499 |
|
Forbo Corporate | forbo.com | #138,887 |
|
Fluor | fluor.com | #147,933 |
|
Green Design-Build Construction | korteco.com | #163,066 |
|
Bechtel Corporate | bechtel.com | #164,144 |
|
Kiewit | kiewit.com | #184,341 |
Pros & Cons
| Pros | Description |
|---|---|
| Flexibility | You can put as much time into the business as you'd like. If you like the work and have some initial experience, you can start small and manage all aspects of the business on your own. |
| Scalable | With businesses and processes changing daily, there will always be demand for new features, products and services for your business. Additionally, there are several different business models and pricing tiers you can implement that will allow you to reach all types of customers. |
| Meaningful business connections | You never know who you will meet as a construction company. This could be the start of an incredible business opportunity! |
| High customer retention rates | Once a customer invests in your product, they've invested their time and energy to utilize your product/service which is highly valuable to them. Typically, your product or service becomes indispensable to your customer. |
| Pick & choose the clients you work with | Construction Companyes have the ability to choose the clients they work with. You have the freedom to work with only a few loyal clients or with hundreds of clients! |
| Control of workload | With starting a construction company, you have the unique ability to choose how little or how much you want to work. You also have the freedom to decide which projects you want to work on, and can turn down the ones that do not interest you. |
| Cons | Description |
|---|---|
| Finding The Right Supplier | Most businesses in this space go the supplier/manufacturer route, which isn't a bad thing! However, finding the right supplier can take a lot of time, energy and trial/error. If done properly, this process can save you months (if not years) of time and energy. More on this below in the "finding a supplier" section. |
| Low margins | The gross margins for your construction company are typically around 42%, which can make it more challenging to incur new expenses and maintain profitability. |
| High employee turnover | In the construction company, employee turnover is often high, which can be quite costly and time consuming for your business. It's important to try and avoid this as much as possible by offering competitive pay, benefits, and a positive work environment. |
| Stressful work | This line of work can be stressful for both you and your clients. This type of transaction is a significant financial decision for your client, so expectations are very high for you. Although this career path can be very rewarding, it also comes with its challenges and stressful moments. |
| Niche Market | A niche business is not necessarily a bad thing, in fact, it can be the key to your success. However, it can be more challenging and time consuming to find the perfect niche market and target audience. |
| High overhead expenses | With starting a construction company, there are overhead expenses that come with selling a physical product. You will want to make sure you strategically budget for these overhead costs. We discuss this more in the startup costs section below. |
Marketing Ideas
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1
Affiliate program
Affiliate marketing is a great way to bring in a new revenue stream, especially when you don't sell products or services.
Simply put, an affiliate program is an agreement where a business pays another business or influencer ("the affiliate") a commission for sending traffic and/or sales their way.
The affiliate typically gets a unique link where clicks and conversions can be tracked.
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2
Direct Sales
Direct sales strategy implies a direct contact between a seller and a consumer without the involvement of any third party. Direct selling is popular in sectors where sellers communicate with their clientele personally. The sales technique occurs at non-store locations which include at home, work, or online.
For direct selling to succeed, hire a few (or many) salespeople to support the sales conversion process. It's critical that you assign them specific roles and responsibilities to nurture the client and provide excellent support.
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3
Word of mouth
Word of mouth is when a consumers reflects their interest in a company’s product or service in their daily dialogues.
Therefore, word of mouth advertising is essentially a free advertising triggered by the customers experience.
According to Nielsen, 92% of people trust recommendations from friends and family.
Therefore, in today’s hyper-connected world, a single recommendation through a word of mouth can have a huge impact to your business.
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