How to Start a Sustainable Construction Materials Business

Start a sustainable construction materials business by following these 10 steps:

1. Plan your Sustainable Construction Materials Business
2. Form your Sustainable Construction Materials Business into a Legal Entity
3. Register your Sustainable Construction Materials Business for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Sustainable Construction Materials Business
6. Get the Necessary Permits & Licenses for your Sustainable Construction Materials Business
7. Get Sustainable Construction Materials Business Insurance
8. Define your Sustainable Construction Materials Business Brand
9. Create your Sustainable Construction Materials Business Website
10. Set up your Business Phone System

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.

Exploring your options? Check out other small business ideas.

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 will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Business Name Generator

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name, we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability.

It's very important to secure your domain name before someone else does.

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.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your sustainable construction materials business is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

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!

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

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

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money 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.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

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.

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.

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.

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. 

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.

Not sure if a sustainable construction materials business is right for you? Try our free Business Idea Generator and find your perfect idea.