Start a fence company by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your fence company. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a fence company?
Opening expenses include a business and tax license, a contractor’s license, and liability insurance. Insurance is necessary to protect your business in the event of an accident or injury. Purchasing a surety bond is also a good idea. Many come in amounts from between $6000 to $12000, but coverage for up to $50,000 can be purchased for large projects. The cost of yearly premiums for a small business averages between $500 and $900. At minimum, you’ll need a full size truck with an extended bed for delivering materials. A forklift can also be useful in loading fencing materials quickly and easily. The necessary equipment required for building fences includes post drivers, fence stretchers, saws, drills, air compressors, hydraulic augers, and a concrete mixer. Purchasing that equipment new will require a minimum investment of approximately $10,000. Finally, you’ll need a place to store all of that equipment as well as office space for storing files and contracts. Fortunately, depending on your local zoning laws, your home may be able to serve those multiple purposes.
What are the ongoing expenses for a fence company?
Ongoing expenses for a fence installation business may include:
- Vehicle and equipment maintenance
- Fencing materials
- Storage costs
- Shipping fees
- Credit card processing fees
- Website maintenance and office supplies
- Employee payroll
Who is the target market?
Preferred customers are homeowners, business owners, real estate developers, farmers, ranchers, and government agencies.
How does a fence company make money?
A fence installation business makes money by purchasing fencing supplies at wholesale prices and charging for the labor and expertise necessary to design and install fences.
How much can you charge customers?
It is estimated that the average cost of a fence is $2,620. In many places, building permits are required. The average building permit costs about $800. If the area to be fenced is sloped or contains obstructions that need to be removed, the cost can be significantly higher. For a simple wooden fence, the industry standard for materials is currently from between $7 and $19 per linear foot. The charge for a vinyl fence can be as high as $33 per linear foot. Other materials, such as decorative wrought iron, can be priced as high as $300 per linear foot when installation costs are included. Labor costs per linear foot vary from $7 to $12, depending on the type of materials used.
How much profit can a fence company make?
Depending on the level of training and experience, the annual salary for a fence installation worker ranges from between $21,160 and $51,800 with an average of $32,450. A large, well- established fence installation business can create as much as 1.4 million in annual revenue.
How can you make your business more profitable?
One way to make your business more profitable is by creating a display showcasing all the different types of fencing your company offers for potential customers. Erecting a number of small sections of each type, using different materials, including decorative elements, provides your customers with a visual representation of the finished product. Another important step you can take to make your business more profitable is teaming up with other fencing contractors who specialize in different types of fences than those your company normally builds. Cooperation as well as competition between industry professionals benefits everyone involved. It can both increase your company’s name recognition and result in a greater number of satisfied customers.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your fence company is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Find the right bank for you, read our review of the Top 5 Banks for Your Small Business
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a fence company. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
Fence companies may also wish to look into applying for a resale certificate, as a resale certificate allows retailers to purchase goods intended for resale without paying sales tax.
In addition, certain local licensing or regulatory requirements may apply. For more information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Services Contract (e.g. MSA)
Fence companies should require clients to sign a services agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions and service level expectations. Here is an example of one such services agreement.
Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your fencing business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.
STEP 7: Get Business Insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a fence company
Joining your local Chamber of Commerce can provide valuable information about future planned real estate development as well as the opportunity to network within your community. Realtors offices and homeowner’s associations are also great places to leave your business card with a link to your website. Members of farming and ranching cooperatives regularly require fence repair.
How to keep customers coming back
Social media is a great place to advertise for new customers because it provides an inexpensive way to track consumer response to special offers. Donating time and materials to local charities is a good way to showcase your best work and demonstrate your commitment to the improvement of your local community. This type of business requires a high level of consumer trust, so building a good reputation is essential for success. One satisfied customer can mean many recommendations to friends and neighbors. Since this business can also be weather-dependent, it’s important to nurture long-term client relationships year-round.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Fence Company In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
This business is ideal for people who enjoy working outdoors and helping people increase the security, beauty and functionality of their property.
What happens during a typical day at a fence company?
Daily activities can include:
- Meeting with potential clients
- Surveying and measuring areas to be fenced
- Performing safety checks on utilities
- Obtaining building permits
- Preparing bids and estimates
- Negotiating prices and purchasing supplies
- Using tools and equipment such as augers and spades
- Erecting and repairing fences
- Interviewing, hiring and training support staff
What are some skills and experiences that will help you build a successful fence company?
Some of the skills necessary in this business include:
- Physical strength and dexterity
- Knowledge of building and construction
- Ability to understand clients’ needs and give clear and logical presentations
- Ability to accurately estimate costs, time and materials needed to complete jobs
- Knowledge of tools and materials needed
- Time management skills
- Experience in repairing tools and machinery
- Math skills for measuring distance, area and ensuring structural integrity
What is the growth potential for a fence company?
This industry is expected to exceed $9 billion dollars in sales by the year 2018. Many fencing companies have grown large enough to offer franchise opportunities for those wishing to gain knowledge and experience from seasoned professionals.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a fence company?
Joining the American Fence Association can benefit your business. They provide industry discounts as well educational opportunities and valuable network connections. Their prestigious Blue Ribbon designation signifies that a company has demonstrated the highest professional and ethical industry standards.
How and when to build a team
While maintaining a small, one-person operation is possible, building a team of trusted suppliers and skilled workers from the beginning is essential for the continued growth of your business. Hiring independent contractors may be more economical while building your business, but hiring permanent employees makes it easier to maintain a consistent level of quality and dependability.