NEWS
23/05/2022
Start Your Own Building Business with These 5 Things in Mind

Start Your Own Building Business with These 5 Things in Mind

Starting your own business is an equally exciting and daunting prospect—there’s almost as much to lose as there is to gain.

As the person in charge, it’s your job to take charge of key decision making, and you’ll also need to learn a range of supporting business skills to complement your craft, like administration, marketing, customer service/management and accounting to name a few.

You’re also entirely in charge of your earning potential, a factor that is driving more and more tradies to enrol in a Diploma of Building and Construction.

But, luckily for you, this is a path well travelled. Making the switch from a career on the tools to one as an owner, you’re among countless other tradies who have kicked their career up a notch and revelled in the rewards a Diploma of Building and Construction can offer.

Let’s look at some of the key tips on starting a construction business.

How do I start a small building business?

While a Diploma of Building and Construction online can teach you a great deal, your previous hands-on experience can’t be underestimated; it will be of vital value in almost every aspect of beginning your company.

Whether you’ve specialised in a trade your entire life, or had a more broad building background that you want to supplement with a course, you’re well-placed to know what you want when hiring people to work for you, you can better advise customers on individual jobs, and you’ll have the skills you need to accurately plan the budget and scope of new projects.

Ultimately, you have a firm grasp of the market you’re operating in before you even begin.

Diploma of building and construction online

What is the most important skill for starting a business?

Accounting and finance skills are often skipped over by tradies, but they are one of the most important parts of moving from on the tools to off them.

After years in the industry as a contractor or employee, you’ve likely had some degree of responsibility in quoting, budgeting, and invoicing for the work completed. As an owner, you can combine this understanding of how much things cost and how long they take, while incorporating overhead expenses and business profit into the equation.

But there are some areas that you may want to look at strengthening. One of the most important aspects of owning your own business is taking control of the finances. Without a weekly wage paid by your employer, you and only you are responsible for whether you sink or swim.

You could either speak to an accountant or planner who specialises in helping startups and small businesses, or take a short course on the basics and use self-accounting software like Xero to integrate into your workflow or project management platforms.

Is networking important for tradies?

When you’re starting from the ground up, gaining clients and strengthening your network is a top priority. You can start by reviewing your existing contract for any non-compete or client poaching clauses, before making a list of who you know and how their knowledge or expertise could benefit.

Do you have any previous clients who loved your work more than anyone else’s? Perhaps you could attend networking events in your local area to drum up those first clients, making sure you have a basic website to direct them to. Even further study, like a Diploma of Building and Construction online can put you in contact with like-minded people in the industry who could become future clients or partners.

Talk to your tradie mates and let them know of your new direction, as they may be able to refer jobs on. Is there any way you can offer them a win-win situation, referring back in return? And don’t forget to ask for testimonials and draft up case studies for those first few key clients, to offer future customers as a benchmark of what to expect when doing business with you.

How to start a construction company in Australia

How do I file a business tax return?

Depending on the nature of your previous role, you may have had a certain amount of experience in lodging your own tax as a sole trader or independent contractor. Moving ahead, you’ll want to speak to a qualified accountant about your plans for your business and how tax will need to be paid.

From day one, it’s a good idea to keep a separate account for tax payments. Charge 20% of all jobs straight there, and you won’t even notice it piling up. Forget this step and you’re in for an unpleasant surprise at the end of your first financial year.

When it comes time to fill out your forms, you’ll be grateful if you’ve kept a detailed record of expenses, income streams, assets and deductions. Take the time to get your software right, and much of this could be done for you. The Australian Taxation Office’s myTax tool can help to provide you with an introduction.

What is the best small business software?

You’ll likely be excited to register a business name and onboard your first employee, but setting up a building and construction business right is worth the time it takes, and a Diploma of Building and Construction can help you to tick all of the boxes no matter the size of your business.

To start off with, you’ll need a website, likely some basic accounting software, as well as a specialised building and construction project/workflow tool. This last one may also be able to track your time, your vehicle usage, and provide basic reports and analysis, and your accounting package should be designed to communicate with it.

Your goal should be to streamline processes (building and construction, as well as behind-the-scenes ones) from the beginning, no matter how simple your first job is. Use it as a test run to make sure everything flows as it should, from writing your first quote to invoicing that first job. Get this right, and scaling up as your business expands will be as hassle free as possible.

 

This article has been revised and republished on 23 May 2022.