What Types of Construction Companies Can You Establish?

When it comes to the construction industry, there are different types of businesses you can start.

Based on the type of jobs, here are some different paths you can explore:

  • Cement manufacturing plant
  • Ceramic tile retail business
  • Roof maintenance business
  • Wall putty manufacturing plant
  • Cement retail business
  • Electrical wiring business
  • Manufacturing plant for bricks and blocks
  • Construction cleaning service company
  • Construction equipment sales company
  • Project management consultancy
  • Fence panel installation business
  • Concrete supply business

As you can see, the options for construction businesses are plenty. No matter which type of construction company you choose to start, GovDocFiling can help you get it off the ground.

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What Do You Need to Start a Construction Company?

Starting a construction company can be very lucrative. The U.S. is one of the largest construction markets worldwide.

It can be a competitive landscape, so you need to have a solid business plan before you start your construction business. Here is a quick guide to what you need to do:

Determine Business Feasibility

Once you have decided that you want to start a construction company, the first step is to assess your skills and pick a suitable niche. In addition to this, it is also important to determine the feasibility of your business idea.

To get started, here is a list of questions that you should answer:

  • Which skills do you have related to starting a construction business?
  • Which tools will you need?
  • Which niche do you want to enter?
  • Which construction services do you want to offer?
  • Which pain points can you solve?
  • How much money do you need to launch the business?
  • How will you raise funds for your construction business?
  • Is there a demand for the type of construction business that you want to start?

This exercise will help you get more clarity and understand if it is feasible to proceed with your business plan. At this point, you should pivot if your original idea doesn’t seem to be worth moving forward with.

Conduct Market Research

The next step in the process to start your construction company is to conduct some market research.

For this, here are some of the questions you should look at:

  • How big is your target market?
  • Who is your target audience?
  • Who are your competitors?
  • Which services or products are your competitors offering?
  • What is the pricing strategy of your competitors?
  • How will you differentiate your construction business from the competition?

Basically, find out what other construction companies are up to and what the scope of your idea is. These details will help you write a solid business plan.

Determine Construction Equipment and Tech Tools That You Need

Identify any specialized equipment and tech tools that you may need to run your construction business. Some of these may include:

  • Excavators
  • Drills
  • Bulldozers
  • Graders
  • Estimating software programs
  • Building Information Modeling software program
  • Construction project management software solution

In order to complete your work on time and to improve your efficiency, getting the best tools and equipment is important for construction businesses.

Pick the Most Suitable Legal Business Structure

The business structure you pick will impact your ownership structure, operational needs, and taxes.

Some of the most common types of legal entities that you can choose from include:

Most people choose to start a construction LLC or Corporation because you get protection from any personal liability in case someone sues your construction company. Sole Proprietorships and Partnership entities do not offer any liability protection to the owners (you). In this industry, it’s very important to get liability protection and liability insurance due to the nature of the work.

How to Start a Construction LLC in 9 Steps

Starting a construction business can be a lot of hard work. It requires months of planning to make sure you have covered all of your bases.

Not sure where to begin?

Here is the step-by-step process you can follow to start a construction LLC:

Step 1

Create a Detailed Business Plan

Based on your expertise and market research, pick a niche best suited for your business idea. Next, write your business plan listing your goals, business name, target market, revenue projections, and other important details. You may need to share your business plan while securing funding, so make sure it is thorough.

Step 2

Think About Finances

Cash flow is extremely important to keep any new business afloat. While starting a construction business, you may require a disproportionate amount of money. Some financing options include government loans, private lenders, bank business loans, credit unions, and government funding programs.

Step 3

Choose LLC or Corporation as Your Business Structure

Starting a construction LLC or Corporation can provide protection against personal liability. Keep that in mind while choosing a legal structure for your business. Both of these legal entities also have their cons, so make sure you read up on them before you register your business.

Step 4

Complete Federal and State Filings With GovDocFiling

To legally establish your construction company, you need to get it registered at the state and the federal levels. Upon completion, you will get your employer identification number (EIN).

To expedite your filing process, you can trust the team at GovDocFiling. We’ll take care of all the paperwork on your behalf so you can spend more time focusing on other aspects of your business.

Step 5

Get Relevant Permits and Licenses

Depending on your location, business size, and the type of construction business that you’re planning to start, you may require general contractor licenses and specialty licenses. If you don’t have them, you may have to pay hefty fees and a tax penalty. Check the websites of your local administrative bodies at the city and county level. You can also call their offices for more information regarding the required licenses and permits.

Step 6

Get Business Insurance

Many jobs in the construction industry may involve dangerous work that can cause fatal injuries. General liability insurance can protect your business from any claims that are related to bodily injuries. Similarly, workers’ compensation insurance can cover any medical expenses of injured employees. Do your research and get all suitable insurances for your business.

Step 7

Open a New Business Bank Account

To open a business bank account, you will need to ensure that your filing documents are in order. GovDocFiling makes this process simpler by sending you the required documents via email.

The best part is that you can get up to $500 back when you open a business bank account through GovDocFiling as we have partnered with Chase Bank.

Step 8

Get Bookkeeping and Accounting in Order

Setting up an efficient mechanism for bookkeeping and accounting is essential for business owners. Don’t wait till the end of the year to get your finances in order. Be proactive so that you have a record of your cash flow and expenses from the start.

Step 9

Market Your Business

Set up a professional-looking website and get listed in local directories so that your prospective clients can find you more easily. To get quality leads, you should also join industry associations and participate in trade shows.

Ready to start your construction LLC now?

Let us handle the documentation and filing process on your behalf. That way, you can focus on making your business successful.

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Reasons to Choose GovDocFiling to Start Your Construction LLC

At GovDocFiling, we have helped hundreds of entrepreneurs navigate the legal procedures required when starting a business.

Since we have done this countless times before, we know the common pitfalls to avoid and how to get the application ready faster.

When you sign up with GovDocFiling, you can save a ton of time and effort. In addition to this, you also get the following benefits:

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Frequently Asked Questions

What is an example of a tax ID number?

A federal Tax ID Number is an identification number used by the Internal Revenue Service (IRS) to administer tax laws. This number is issued either by the IRS or Social Security Administration (SSA). A business Tax ID number is required on tax return forms.

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How do I get an EIN application?

An Employer Identification Number is a nine-digit number that identifies your business. It works much the same way your social security number does. If your company has employees, is a corporation or partnership, has a Keogh Plan or fits one of several other situations, it must have its own EIN.

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How many EIN numbers can I have?

As a business owner, you probably know your company needs an EIN (or Tax ID Number) issued by the IRS for tax purposes. But what if you own multiple businesses or operate different divisions of the same entity?

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What is the purpose of a tax ID number?

Your business is going to need to file income taxes. The Internal Revenue Service uses Tax Identification Numbers to distinguish between individuals, business, and nonprofit organizations, but business tax ID numbers should be distinct from your personal federal tax ID number.

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What does it mean to have a tax ID number?

For the IRS to conduct its business, it must have an easy way to identify each individual and business. To do this, they require each individual and business to have a tax ID number.

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How does an SSN differ from a tax ID?

A social security number (SSN) is a tax code used by an individual, while a tax ID is a nine-digit tax code for a business entity. For a business entity, a tax ID is usually called an EIN.

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What is a DBA?

If you’ve ever considered working for yourself, or starting your own business, you may have wondered: what is a DBA? Is a fictitious business name the same as a DBA? What are the benefits of a DBA to my business and myself?

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Can a DBA be filed for all business types?

Each type of business entity has clear advantages and disadvantages. Can a DBA be filed for all business types? In most cases, yes; but understanding what a DBA is and what it’s limitations are will help you decide if it’s worth

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How many DBA names can I register?

DBA application filing is a process overseen by state DBA laws and local government, protecting the public from nefarious business owners. DBA is an abbreviation for “doing business as,” and is also referred to as a fictitious name or trade name.

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Do I need a DBA?

If you’ve ever considered freelancing, or starting your own business, you should take a few moments to answer this very important question: Do I need a DBA? Not every small business owner needs to pursue DBA application filing, but

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Are any words prohibited in a DBA name?

DBA is an acronym that stands for “doing business as.” You may be wondering “do I need a DBA?” If you intend to do business using a name other than your legal business name, you need a DBA. DBAs are common for sole proprietors or partnerships that do not want to use the owners’ legal names to do business.

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If you’re starting a business, there are more then a few abbreviations you’ll need to remember. Filing a DBA application, or applying for an EIN, are two common steps for new business owners. However, they are not the same thing, and as a business owner you should know the difference.

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What is an LLC?

A limited liability company, commonly referred to as an LLC, combines the taxation benefits of a partnership with the limited liability of a corporation. Instead of partners, LLC business owners are called members, and there can be several, or a single member.

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What are the benefits to filing for an EIN as an LLC?

A limited liability corporation is one in which the members aren’t personally responsible for any company liabilities or debt. Limited liabilities have the protections of a corporation but the flexibility of a partnership. If your business is listed as a limited liability corporation, you can benefit further by applying for an Employer Identification Number.

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What’s the difference between an LLC and a corporation?

The fine print that separates a limited liability company (LLC) from a corporation can be overwhelming for new business owners or entrepreneurs. While the minutia of these details might be best suited for a legal advisor or accountant, the broad differences are fairly easy to understand, and they might be enough to help you make a judgment

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What happens if I apply for the wrong LLC?

Limited Liability Companies (LLC) are popular business structures because they offer personal liability protection for members and don’t have all the formalities that corporations do. LLCs also enjoy pass-through taxation, which means the company doesn’t pay federal income taxes; instead,

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What legal documents do I need to start an LLC?

For entrepreneurs thinking about starting their own business, forming an LLC is an ideal option, as such an entity provides the owners protection from lawsuits, business debts and other business indiscretions. However, in order to obtain that protection, there are a number of documents that the business owner or owners must file with the state government prior to conducting business.

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What are the differences between a partnership and a Limited Liability Company?

A Limited Liability Company is a legal entity all its own, while a partnership is owned by two or more people who share legal responsibility of the business entity. In a partnership, the business does not possess a legal identity outside of the business owners. A Limited Liability Company offers more flexibility in terms of operations and personal asset protection.

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What is a C-Corporation?

A C-Corporation is just anther way of saying corporation. It means the same thing. Corporations are incorporated business entities that file Articles of Incorporation with the Secretary of State or a similar government agency.

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Can a C-Corp have multiple owners?

There are certain C-Corp requirements to meet whether you want to start a corporation with one shareholder or dozens. It is certainly possible to apply for a C-Corporation EIN with multiple owners, and when forming a C-Corp in this manner, there are a few points to keep in mind.

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Why is a C-Corp taxed differently than an LLC or S-Corp?

Unlike other business structures, C-Corp taxation is significant in that corporations are taxable entities. Corporations are taxed like an individual and contribute according to corporate income, and then again on shareholder tax returns. This is commonly called ‘double taxation’.

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What is an S-Corp?

S-Corporations, sometimes called S-Corps, can be useful ways for business owners to avoid what’s called “double taxation”, while also protecting shareholder assets from personal liability. It’s a mix of advantages drawn from other types of business entities; and it isn’t nearly as complicated or time consuming as you might think to establish.

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How do I file to become an S-Corporation?

Before we dive into how to file to become an S-corporation, let’s take a look at what an S-corporation is, exactly, and why you may want to establish this type of business entity for your company. S-corporations are similar to partnerships, or sole proprietorships, at least in terms of how the company will affect you financially.

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What is a disqualified S-Corporation?

There’s No Such Thing as a Disqualified S Corporation. Luckily, S corporation disqualification is more of an urban legend than fact. In 2010, Congress attempted to pass a measure that would have disqualified some S corporations, primarily small businesses, from using S corp tax structures when filing.

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Are You Ready to Start a Construction LLC?

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