32519161_MCovid-19 hit the construction industry hard. However, now despite challenges, the industry is trending upward. Growth is expected in all construction sectors, so now might be a good time for you to start that contracting business you’ve been thinking about.

But before you begin:

Get mentoring. You don’t have to go through this alone — find a mentor who can help you understand the ins and out of the business planning process. This is a great time to network, if you aren’t doing so already. Also, if you haven’t already, consider membership in trade associations. Since these associations offer conferences, seminars and other events, you will have more opportunities to meet with, talk to and learn from experts in the field.

Access financing. You will need to make sure you have adequate financing in place. A Small Business Administration (SBA) loan program might be a good option for you. The SBA itself does not make loans; this is a program that can help small business owners qualify for financing that might not be available otherwise. Other financing options include credit unions, community banks or a business line of credit.

Determine the right business structure. There are several business structures to choose from, and what you choose affects important company procedures like how you file your taxes and other aspects of record-keeping. Click here to determine the best structure for your needs.

Be aware of insurance requirements. One of the most important aspects of starting a new contracting business is finding the right insurance coverage. It is inevitable that accidents will happen in the contracting world, and you want to be prepared. Most states require contractors to carry a minimum of liability insurance.

  • A good place to start is a Construction General Liability Policy. However, enhanced coverage is recommended. This would include policies for pollution coverage, disposal site coverage, transportation pollution. For trade/artisan contractors, targeted risks should be included in a policy: HVAC, concrete, doors and windows, flooring, plumbing, masonry … to name only a few.
  • Expanded coverage may also be needed. This could include electrical, excavation, even swimming pools.
  • Look at an Environmental Package. An Environmental Package is a must for contractors working with hazardous waste, soil and groundwater remediation, asbestos remediation and mold remediation for starters.
  • Make sure you work with an insurance broker who understands you and understands the business. Find one who will answer your questions and listen to your specific needs.