Start a sustainable construction materials business 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 sustainable construction materials business. 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 much can you charge customers?
- 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 sustainable construction materials business?
Although you will house some materials, you can start out as more of a distributor for sustainable materials. You’ll need a warehouse to stage orders and store some materials. You’ll also need some delivery trucks and flatbed semi or two, if you deliver large items, such as fully-built trusses or steel beams. You will also need to set up an office for logistics involving deliveries and receipts. As you grow in size, you may need more warehouse space and an expanded fleet of delivery vehicles.
What are the ongoing expenses for a sustainable construction materials business?
Most ongoing expenses are maintaining delivery vehicles and rent/mortgage on warehouses. Employee salaries and licensing and insurance will also regularly factor into annual expenses.
Who is the target market?
Your target market will be building and construction managers who are looking for new and improved methods for construction. Sustainable options are comparable in price, sometimes better. Look for construction companies which mirror your own eco-friendly ideals.
How does a sustainable construction materials business make money?
Sustainable construction materials businesses sell to contractors and clients in and associated with the building and construction industry.
How much can you charge customers?
Material prices will fluctuate between type and market value. Most sustainable materials are very comparably priced to traditional materials.
How much profit can a sustainable construction materials business make?
Sustainable construction materials companies can make a decent earning, once established. A successful company selling to residential and commercial crews can earn six figures annually.
How can you make your business more profitable?
Some sustainable building supply houses get in the business of reclaiming items from buildings set for demolition. Pulling seasoned lumber, stone and metal materials out for resale can offer another form of revenue and continues to close the waste circuit.
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 sustainable construction materials business 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.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
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.
Read our Best Banks for Small Business guide to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Recommended: BlueVine is an online bank with free business checking and no hidden fees. Great for businesses who do not often deal with cash.
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 Sustainable Construction Materials Business. 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.
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.
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 sustainable construction materials business
Sustainable building materials are often featured in traditional trade magazines and online forums. Your business should seek out similar avenues for advertising. Construction industries, both commercial and residential, still pay attention to magazines and papers about their business, so print ads can be effective, if you have the budget.
Online forums like websites and social media are also helpful, although not as likely to reach your target audience. Just the same, flood your pages with pictures and testimonials, regarding the products you offer.
The real advertising will occur between the builders in your area. Your products and your reputation will not go unknown and it’s important to manage that reputation, both of business and owner, carefully.
How to keep customers coming back
Your customers will come back because the products are good and you treat them right. Sell your integrity along with your products.
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 Sustainable Construction Materials Business 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?
Owning and operating a sustainable building materials business is, in many ways, no different than a traditional building materials business. You have to know about building methods and materials, must be dedicated to servicing your clients, and should also understand and closely follow the ever-changing landscape of building materials. Ideally, a person who has owned or operated building supply houses, run a construction company, has experience starting up and running a business, or any combination would be well-suited for this business.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at a sustainable construction materials business?
Most days will involve receiving, processing, and shipping orders for customers. The logistics department of your business will be critical. Additionally, you may be servicing some customers who visit your brick and mortar, if you operate a storefront. Finally, there will be a constant conversation with your vendors and suppliers to make sure products are in stock and available for shipping.
What are some skills and experiences that will help you build a successful sustainable construction materials business?
What are some skills and experiences that will help you build a successful sustainable construction materials business?
Building materials are always evolving and becoming better in quality and price. But, many current standards took a while to gain traction. Having strong communicative abilities will be necessary to promote your materials to new and existing customers. Part of that ability will lie in your knowledge of existing building materials. It is necessary to have extensive background knowledge of building materials and techniques to most effectively explain comparisons and critiques of sustainable building materials.
What is the growth potential for a sustainable construction materials business?
Currently, quite a few industries are experiencing a shift towards Green and renewable resources or practices. Awareness of natural resources is heightened and many future economists and prognosticators understand that traditional building methods aren’t nearly sustainable or energy efficient enough to continue past the near future.
The issue becomes selling new products to traditional-minded consumers. Lumber, cement, and brick have been building standards for so long, that the thought of using straw or hay seems unrealistic. This is where your growth potential exists, as the public has to be educated to the new possibilities, strengths, and applications of sustainable building materials.
With this in mind, growth predictions are positive, as long as the industry can sell itself.
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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 sustainable construction materials business?
Conduct solid market research before launching this business! Although building materials are needed everywhere, some regions are going to be more resistant to these materials. Make sure you size your business, accordingly. If demand is specialized, offer half sustainable and half traditional.
- Find what is missing in your market and target those areas.
- Some cities have areas of town which specialize in renovations and historic preservations. You may want to consider more reclaimed wood options to meet the demands.
- Become an expert in the building materials you offer.
- Create a website and social media presence to show off all of the things these new products can do, how similar they are to traditional, and how much superior they are to traditional materials.
How and when to build a team
Initially, you may be able to operate with a small staff, especially if you’re going to perform some of the deliveries and manage the office. Let your business exist successfully for three months before revisiting the idea of hiring more crew.