Business Overview

Building new or additional structures seems to be an inevitable part of human progress. Construction contractors are the people and businesses who build the residential and commercial structures for their clients.

Who is this business right for?

Construction contractors often have to wear a number of different hats. They are responsible not only their own crew and business’ success, but also the construction and completion of the customer’s house or commercial structure. Being able to manage finances, organize workers and materials, and effectively communicate with customers are all critical for business success.

What happens during a typical day at a construction contractor business?

Day-to-day activities for a construction contractor business focus on the building of the customer’s structure. Whether it be residential or commercial contractor work, there are certain activities and materials necessary to keep the job going. Some examples of these necessities will include:

  • Following blueprints and plans for the build project
  • Purchasing and ordering more materials
  • Inspecting prior work and creating punch lists
  • Hiring subcontractors for specific build stages (plumbing, electrical, painting)
  • Bidding and inquiring about future jobs

What is the target market?

Your target market will be individuals and families with enough continuing assets to afford to build. Often, clients with just enough to make a project work will become nervous about the money being spent during the job. This may cause them to cut corners or put a job on hold, indefinitely. This kind of inconsistency will erode your business quickly. A customer’s bottom line must be financially solid enough for them to continually supply the funds to keep the project moving, no matter the economy. Part of your assessment of your clients, therefore, has to be their overall financial sustainability. Consider them as a partner in your business, while you complete their project.

How does a construction contractor business make money?

Construction contractors are paid to start, continue, and complete the build project. Money is supplied, up front, to buy materials and pay workers to begin the project. The customer is then billed regularly for the continuing work and materials, and again, at the completion of the project. The contractor will make their cut after all other bills and workers are paid.

What is the growth potential for a construction contractor business?

Construction is constantly taking place. New houses and neighborhoods are popping up daily. Just the same, the construction industry is competitive and, at times, saturated with workers and businesses looking for work. Growth potential is fairly good, but you must make sure you stand out from the crowd, both with your build creativity and skill, as well as with your professionalism and business acumen. Annually, residential construction industry earnings in the U.S. average in the multi-billions. The industry is robust, yet businesses fold every year from lack of a proper business plan and mismanagement of earnings. You won’t get rich overnight, but there is plenty of room to grow and establish your business long term if you plan properly and stick to your plan.