Within the UK alone, the construction industry continues to boom. Up to one in every five small businesses conduct business in the construction industry. As such, the industry continues to thrive beyond measure. Due to this, more and more entrepreneurs are taking a stand as they try to set up their own companies.
With that said, there are no shortages whatsoever when it comes to the overall opportunities that owners can take advantage of. The construction sector alone allows ground-up development, residential renovation, public infrastructure projects, project management, and many others. So, no matter your specialty, there is money to be made in the industry.
With that said, there are several key aspects that must be thought out before you can start your business. However, according to the HMRC notification along with your finances and various outside aspects, some groundwork will be necessary for you to take things up and running. So, read on as we dive into everything that you need to know and how you can avoid potential mistakes with your business.
Not Pinning Down Your Service Offering
Before you can begin to successfully conduct business, you’ll need to construct a solid business plan. Your business plan is crucial and should entail key information such as the services that you’re planning to offer, your target market, industrial equipment required and the pricing for your services. All of these are essential for the following reasons:
Before conducting any type of business, it’s a good idea to set clear boundaries for any job that you decide to take. As such, it’s never a good idea to think of yourself as the “Jack-of-all-trades”. While this route is very tempting, it’s never a good idea and often leaves you facing a ton of unprofitable ventures.
For the most part, all beginners think that it’s best to work on several things all at once only to end up realizing that they get bogged down with a lot of unprofitable ventures. In more than one instance, it even puts them in a safety zone where they become extremely comfortable. Within the construction industry, it’s never a good idea to become complacent.
Next, you’ll need to identify any skill gaps that you may have. When you get your skills in order, you’ll know just how capable you are of achieving your goals. In essence, it provides a clear picture that pushes you to further identify any skill that you may need to ensure that you stay ahead of the competition.
If you’re planning to offer kitchen refurbishments, there’s a high possibility that you’ll need the services of a tiler. During this venture, it is important that you create a reliable network of contacts that you can depend on whenever needed. However, you should still ensure that you’re aiming to hire skilled workers if need be for when your business picks up.
Now that you’ve dealt with the skills needed for your business, what about the structure? If you didn’t already put some thought into this, your business structure needs to be well thought out and given the relevant attention from the get-go. This is very important if you’re aiming to set things straight between work and your personal life.
The following are the main structures to think about before working with anyone else:
* Sole Trader – This form of business structure is quite simple. In essence, there’s no concrete distinction between your business and yourself.
* Partnership – A partnership is usually formed between multiple owners. The initial partnership agreement is used to ensure that everyone knows their role within the company. Hence, the rights and obligations are clearly stated to ensure that disputes do not occur as business relations develop.
* Limited Company – If you’re planning to keep away from a regular partnership agreement, this is a very useful alternative. The “ltd” portion of the company allows you to have a more professional view of things. As such, any existing taxes or income can significantly impact the overall structure. Hence, accountancy advice from early on should be taken.
No Access To Business Borrowing
In all fields of business, charges are still required to be paid and there’s always one particular customer that often forgets to send their payments in. Do you have a plan for when money doesn’t come in? If you didn’t think of it, it’s best to do so now because dues are required no matter what.
Being your own boss often tends to lead people down the road to a crash course in cash flow management. So, if you’re starting a new business, it’s always a great idea to open up a small business account with your local bank very early on. However, this should be done with an overdraft policy in place. This ensures that you can access loans if need be.
For the most part, it provides a safety rafter and some reassurance knowing that funds are always available. This is a pretty big deal for new businesses and you should ensure that you’re protected against all of the odds. Having a cash plug is essential if ever any red flags pop up.
Overlooking The HMRC Essentials
Being a sole trader or even a company director doesn’t leave you out of the taxation loop. As such, you’ll need to register for self-assessment services. If for some reason you determine that your overall turnover is higher than the threshold of £85,000, you’ll need to ensure that you’re properly registered with the HMRC.
It should be noted that VAT is usually charged at a standard rate of 20%. However, it can be reduced in such a way that zero rates are applied under certain conditions. Some of these include work for disabled persons. So, before you get started, it’s a good idea to find out more about VAT for builders.
Ignoring Your Reputation
In order to successfully grow your customer list, you’ll need to provide impeccable services for your clients. This is one of the main things that you’ll need to consider and even put in front of expensive ads or even a fancy new website. As soon as you get started, you’ll need to put some focus into the following:
* Set the bar high and get listed on special construction review sites – Ratedpeople and Checkatrade are excellent sources where you can get listed. Additionally, it’s also a great idea to find other platforms within your area that offer these types of services.
* Gently coax new customers to leave positive reviews – Securing reviews is always a great idea especially if you’re just starting up. It creates the perfect image for other clients and it shows others that your work is credible.
* Create the perfect first impression – No matter the job you’re hired for, it’s a great idea to introduce yourself to those around you. This just simply means that you can enquire about nap time for toddlers, and even parking needs that neighbors around you have. For the most part, this is the ideal opportunity for you to market yourself and gives people more to talk about. It ensures that they know that you are considerate and someone that they would want to hire.
The Millionaire Mindset!