Starting a construction management company is a big undertaking, but it can be an extremely rewarding venture if done correctly.
Here are the eight steps you can take to get started on building your very own construction management business.
Eight Steps to Launching a New Construction Management Business
1. Name Your Construction Management Business
Give your construction management business an identity so people will think of it as a well-known and respected brand. You can take the name of your construction management business from your industry, focus on a geographical location, or use your own name among other options.
The main goal for naming your construction management business is to make it sound appealing and trustworthy so that potential clients will want to do business with you.
2. Choose a Legal Form for Your Business
By incorporating your construction management business, you will limit your liability. You can incorporate as a Limited Liability Company (LLC), a C Corporation (C-Corp), or an S Corporation (S-Corp). Or you can operate as a sole proprietorship.
The business structure you choose for your construction management business will determine the amount of taxes you pay and which state or federal tax forms you need to file.
Read our article comparing the most common construction management business structures.
3. Write a Construction Management Business Plan
All construction management business owners should develop a business plan.
A business plan is a document that outlines the goals, strategies, and operations of a business. It can be used to secure funding from investors or lenders, as well as to guide the day-to-day operations of the business. The business plan should include information on the company’s products or services, market analysis, financial projections, and management team among other things.
Read our article about how to write a construction management business plan.
4. Apply for the Necessary Permits and Licenses
There may be required licenses and permits you need to obtain before launching your construction management business.
For example, if you’re going to be operating a construction company, you’ll need to get a contractor’s license from your state or local government. You may also need to get a business license, which you can get from your city or county clerk’s office.
You must also register your construction management business as a legal entity with the state where you plan to do business. You can simply file an online form through your Secretary of State website.
Registering with the federal government is also essential so you can properly pay taxes for your business. You will also need an Employer Identification Number (EIN), which you can apply for at the IRS website, if you plan to hire employees.
Read our article about obtaining the proper construction management business licenses.
5. Determine Your Budget & Apply for Funding as Needed
In developing your construction management business plan, you will figure out how much funding you need to start and grow your business.
If you have your own funds to invest in your construction management business, you may consider taking advantage of that. In addition to your personal funds, other forms of potential funding for your construction management business include traditional bank loans, SBA loans, credit cards, angel investors and family and friends.
Read our article about the costs associated with starting a construction management business to help you determine if funding is needed.
Read our article about how to fund your construction management business.
6. Get the Technology & Software Needed to Run Your Business Efficiently
When you start your construction management business, it’s essential to have the right technology in place to maximize efficiency. You definitely need a computer with Internet access, and accounting software for tracking expenses and revenues.
You may also want to invest in project management software to help you manage construction projects and client/vendor relationships.
Read our article about the technology and software you need to run a construction management business.
7. Market Your Construction Management Business to Potential Clients
Before you start selling your services, you have to let the world know you exist. The first step is to create a website so people can learn more about your services and how they benefit them.
After you launch your website, start promoting it through social media channels like Facebook, LinkedIn and Twitter. Also consider networking with other people in the construction management industry through social media and blogs so they can help share your business.
You also need to start gathering the materials needed to execute on your promotions strategy, which is your strategy for attracting new customers. Construction management businesses should consider the following promotional strategies for which you should start getting prepared:
- Develop a strong branding strategy
- Generate positive online reviews and testimonials
- Engage in public relations to get press coverage
- Attend industry trade shows and events
- Develop relationships with key partners and referral sources
- Launch a direct mail campaign
- Engage in email marketing
Read our article about how to market your construction management business for more tips.
8. Get New Clients & Grow Your Business
When you promote your services, you’ll start to get interest from potential clients.
Make sure you’re ready to serve these clients. Also, be sure to establish systems to ensure consistency and reduce costs. And be sure to find and train the right people to help you grow your construction management business.
Read our article about how to effectively grow your construction management business to learn more.
Starting a Construction Management Business FAQs
There are many reasons to start a construction management business. As a construction manager, you can help clients save time and money while ensuring a successful building project. In addition, you can be your own boss, set your own hours and work from anywhere in the world.
The industry outlook is also positive for construction managers. The Bureau of Labor Statistics projects that employment of construction managers will grow 11 percent from 2018 to 2028, which is faster than the average for all occupations.
To start a successful construction management business, you need the following:
- A strong understanding of the construction industry
- Business management skills
- The ability to build relationships and communicate effectively
- The willingness to work hard
- A dedication to customer service
- The right technology and software
- A well-thought-out marketing strategy
- The ability to attract and retain clients
- The right team to help you grow your business
To start a construction management business from home, establish your workspace. This might include a home office, storage for construction equipment and supplies, and a dedicated phone line and email address for business inquiries. You'll also need to get the right technology and software in place to manage your business effectively.
Next, develop a marketing strategy to promote your construction management services to potential clients. And finally, build the right team to help you grow your business.
Start a Successful Construction Management Business
Following these tips and using the checklist will help ensure that you are on the right track. Remember to keep your interests, skills, and experience in mind when making decisions about your business. And finally, invest in the right technology and software to help you manage your growing company effectively.