Starting your own construction company can be a profitable venture under the right circumstances. So if you have experience in construction and want to start your own company, be sure to research the necessary business considerations, requirements and laws before launching your business.
Pricing and Estimating Process
Develop a pricing and estimating process for the work you intend to perform. Most clients want a fixed lump sum price for the work they want done, so make sure you fully understand all your direct labor, materials and equipment costs, your overhead costs, and your profit expectations for the work you quote.
Just ask Scott Mayhew, owner of Scott Mayhew Contracting Ltd. in Penticton, who attended several Small Business BC seminars and went through the Community Futures Okanagan Similkameen self-employment program to start his business six years ago. From experience he says, “Clients want accurate fixed quotes and this can be done through construction estimating software. However, accurately quoting for residential renovations can be tricky because who knows what we will encounter when we’re doing the renovations”.
Completion Schedule
Scott continues to say, “The key is to be open and up front with your clients from the beginning and throughout the project so they know about the potential unknown variables that may arise during the renovation of their homes.” So make sure you have enough time for your projected completion schedule to properly perform the scope of work. Always put some contingency time in the schedule; minor delays, weather, equipment problems, etc., that may occur.
Contract
Develop a comprehensive contract form to use for your work with clients. Make sure all your contracts have at least a well defined scope of work, good terms of payment, an achievable schedule and a good extras/claims clause. Do not do any work on verbal orders; get everything in writing, always, no exceptions. “Be sure to document all change orders throughout the course of the project. There are so many aspects in a job that it’s essential to be detailed and clear within the contract to protect us and our clients,” says Scott.
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