Like any other business, the construction industry requires one to outline a basic set of objectives, develop a business plan, hire employees, acquire capital as well as clients. However, a construction business has a special set of legislative and occupation requirements in order to legally operate and be successful.
The following is a brief primer on how to prepare yourself when starting a construction business.
Check your regional licensing requirements
As with most of board businesses, you’re going to need a business license to operate. However, there is no broad license offered to construction companies. Rather, you are going to need one or likely several specific licenses which are determined by the state that you live. Examples of such licenses include plumbing, electrical, general engineering, or a general building license.
Understand the rest of the red tape before you brave it
Another legal requirement not found in other businesses, but required for construction companies is the purchase of surety bonds. A surety bond is a legal contract which involves a client, company, and third-party, in which the third-party is legally obligated to pay restitution in the event that the hired company does not fully render contractually guaranteed services to the client. Depending on the city and state you live in you may also be required to comply with additional ordinances and permit requirements, so it is recommended you consult a lawyer in order to be in full compliance with the law. In case you need to undergo a test for substance abuse, you can utilize fake pee for a drug test.
Also, be sure to personally stay abreast of any new regulatory developments which may occur at the federal, state, or local levels, in order to avoid running afoul of new legislative restrictions. The rate at which new regulations are ratified can so rapid that not even the best lawyers can always keep up. Remember that constantly acquiring new knowledge is not only the best method to prepare yourself when starting a construction business, but the best way to stay in business.
Insure your firm, your employees, and your equipment
Finally, the construction industry by its nature is dangerous, and thus possesses an additional set of costly worker protections one simply must be prepared to take on. In fact, according to the Bureau of Labor Statistics construction firms are one of the highest industries, private or public, which produce both fatal and non-fatal accidents. While this is an unfortunate fact of life, the financial and emotional costs this occupational risk poses you, your employees, and our firm’s success can be mitigated with investment into several insurance policies.
In addition to workers compensation, which most states by law require, you should also purchase business insurance policies, such as general liability, property, and vehicle insurance. Doing this will not only mollify any financial loss you and your employees may endure after an accident, but also act as a legal shield to protect you from frivolous court battles with opportunistic individuals.