After laying the foundations, things are finally starting to place. Here’s what to do now your construction company has left the start-up stage behind.
Now that you are ready to expand your construction business, you may be considering hiring full or part-time assistants where previously you have used other contractors. This is a good choice early on since it is a risk to have staff members on your pay-roll when you aren’t assured of any large income. However, if you have taken on enough clients and are assured that you can handle the risks, taking on an employee can be a much cheaper source of labour than involving other contactors.
Remember however that as an employer you will inherit a plethora of new responsibilities; for taxes, employee health & safety and (depending on their salaries) employee pensions too. You should check up what you will become liable for before employing anyone. Information can be found here. It may be possible to take on apprentices too. Though by their very nature inexperienced, apprentices can be have their own regulations governing pay, which usually comes to less per hour than the national minimum wage.
When starting up, it’s unlikely you will have been able to afford to invest in any heavy plant. For most entrepreneurs, construction vehicles are unaffordable, and ownership marks the start of a new phase of your business.
Previously, if an item of kit seemed anything but absolutely essential, you will have hired it from a supplier. Cherry pickers, tractors – even smaller items like fence post hole borers will have been rented if it looked like they wouldn’t be needed in the foreseeable future. Now that the time has come to progress your business, however, you that you have enough capital, investing in some of these frequently used tools will increase your profit margin from each job by cutting out hiring costs.
If you are going to go down this path, start with things you are going to need most often. Trade off item expense with hiring cost. Remember that you get large discounts buying second-hand plant from used-retailers like Scot JCB. Importantly, don’t forget to budget in the price of insuring the new equipment. Remember that for vehicles like tractors or some diggers, you will need to have them properly licensed to use them on the road.
If you started up your business yourself, perhaps working on the side of your previous job, it’s likely you work from home. If you’re expanding, now might be the time to let your children have their playroom back and move your home office into a dedicated office real estate.
Although this is a large extra expense, having a dedicated office space will increase your credibility as a contractor and allow you to speak to clients in your own professional environment – a psychological advantage at negotiations and meetings. More than anything, it will help solidify your brand and give a sense of purpose and direction to your business. Furthermore, if expanding, it’s likely you are on the verge of needing the services of accountants, lawyers and administrators, all of whom will be more productive and cohesive linked into a central hub than working freelance from an agency.