If you have a background in construction with a passion for business, you might be ready to venture into the world of owning your own business. There’s no doubt that the construction industry is continually growing, meaning the concrete industry is growing, too.
It’s a big undertaking to become a business owner, but with the right resources, planning and a great business plan, you can start a successful business. Here’s our 12-step guide on how to start a concrete business either on your own or with a business partner.
- 1. Do Your Research
- 2. Start With a Name and Business Plan
- 3. Choose Your Legal Structure
- 4. Register Your Business
- 5. Secure Funding
- 6. Apply for Licenses and Permits
- 7. Open a Business Bank Account and Credit Card
- 8. Insure Your Business
- 9. Build Your Team
- 10. Develop Marketing Materials
- 11. Rent or Purchase Concrete Equipment
- 12. Launch Your Concrete Business
- How To Start a Concrete Business FAQ
- Rent Concrete and Other Construction Equipment
1. Do Your Research
Before starting any business, do comprehensive research to ensure that your idea is a viable business that will bring in a steady cash flow. Your research should include market trends, future competitors and the risk involved in starting a concrete business.
Take some time to think about what challenges you might face and how you plan to overcome them. After all, you wouldn’t want to invest your time and money into a business that doesn’t have the research and data to back it up.
Here are just a few questions to consider before moving forward:
- How large is your service area?
- Who is your target market?
- What needs are you fulfilling for your potential customers?
- Who are your competitors and how much of the market share do they own?
- Is there a significant amount of available market share you could own?
- What does the concrete industry look like now and in the future?
- What are the risks involved in starting a concrete company?
Start With a Name and Business Plan
Make sure you pick a business name early on so you can register your business, secure permits and buy your website’s domain name. Here are some tips for choosing the right name for your business:
- Make your name website-friendly
- Choose a name that’s easy to pronounce
- Pick a name that tells your customers what you do
- Follow your state laws and guidelines for naming a business
- Make it short enough to fit into a logo
- Avoid using a name that’s too close to a competitor or another business
With your business and market research in hand, you’re ready to devise a business plan. A business plan is a document that gives an overview of your business and its potential. All companies, especially startups, should have a business plan because it can prove that your business idea is viable.
A well-thought-out business plan is essential as a startup as it can help you secure funding in future steps. If this is your first time writing a business plan, dozens of websites can help you build out a plan — or you opt to create the plan from scratch.
No matter your method, these are the most essential elements to include in your business plan:
- Executive summary: An overview of your entire business plan in a couple of paragraphs. While this is the first component of your business plan, write it last so you can summarize it in its entirety.
- Business description: An overarching description of your business, the product or service it provides, your target customer base and details about the concrete industry.
- Market analysis: A summary of your market research. It will give details about your target audience, like their geographic location, demographics, needs and how your service will fill their needs.
- Sales plan and marketing: Covers how you will reach your audience and convince them to hire your concrete business over the competition. This section should include your company’s unique selling proposition and how you plan to market your business and secure sales.
- Competitor analysis: A list of your competitors, both direct and indirect. This section is a comparison of your business against your competition and your plan to beat them out.
- Management and organizational structure: Details about management’s qualifications and experience. You may also provide an organizational chart to show the structure of your business, the different positions and who reports to who.
- Products and services: This section gives you the chance to list out every service you offer as a concrete company. Think about every detail of your service, all the way down to associated costs and suppliers to give your best and most accurate description.
- Funding request: If you’re just starting your company, you’ll likely need an investor or a loan to back you. This section is all about the amount you need to borrow and how you’ll use it.
- Projections: This section breaks down your expected earnings in the first year to five years in the market. These projections will come from your market research and the data you gather. You can also provide a plan for how you plan to pay back loans.
3. Choose Your Legal Structure
A business legal structure, otherwise known as a business entity, will define how the government regulates certain aspects of your business, like liabilities and taxation. Let’s break down the different types of legal structures.
- Sole proprietorship: The simplest legal structure where one person is responsible for the business’s finances and liabilities. This means there is no separation between business and personal assets so it doesn’t protect the owner’s assets in the event of an accident or lawsuit.
- Partnership: A partnership is a legal structure in which two or more people are equal owners in the business. They operate similarly to a sole proprietorship or they can open a limited liability partnership (LLP), where each partner limits their personal liability and protects their assets.
- Limited liability company (LLC): LLCs provide owners with liability protection (similar to that of a corporation) while the company’s earnings and losses can be claimed on the owner’s personal tax returns.
- Corporation: Corporations are legal entities that are separate from the company owners. That means the company takes on all the liabilities in case of accidents and lawsuits while protecting the assets of the owners.
Types of Corporations
There are various types of corporations, each coming with its own set of regulations and benefits.
- C corporations: C corps are owned by shareholders and taxed as a separate entity. They can have an unlimited amount of investors.
- S corporations: S corps are popular for small businesses for tax reasons. Each employee’s salary is subject to FICA tax, while additional distributions of profits are not subject to further federal income tax liability.
- B corporations: B corps are benefit corporations. While it is a for-profit company, time and resources are dedicated to creating a positive impact on environmental and social responsibilities. B-corps must be certified by B Lab by meeting their requirements.
- Closed corporations: A closed corporation is owned by only a few shareholders and doesn’t publicly trade its shares.
- Open corporations: An open corporation publicly trades shares, meaning anyone can invest in the company.
- Nonprofit corporations: Nonprofit organizations exist to use their profits to benefit a group of people in need or other charitable contributions. In exchange, nonprofit organizations receive a generous tax exemption.
Construction sites can be home to the occasional accident. In the case of faulty business and unsafe practices, construction jobs could lead to lawsuits. For this reason, business owners should choose a business entity that will limit their liability, such as an LLC or corporation.
4. Register Your Business
Registering your business is probably the most important step, as it is what makes your business official. Most business owners opt to register their businesses in the state in which they already reside; however, if you plan to serve more than one state, you may need to register the business in other states. Check your state’s rules and regulations before filing to make sure that you have everything you need to file.
Most businesses aren’t required to register at a federal level, but they do need an Employer Identification Number (EIN), which allows your company to pay taxes. You can file for an EIN online through the IRS. It may be helpful to consult an accountant at this step so you ensure you meet all the requirements and set up your taxes correctly.
5. Secure Funding
There are plenty of options when funding your business. Many small businesses apply for funding through a bank for personal business loans or a business line of credit, which is a flexible spending account. That said, banks won’t take the risk to fund a loan if you can’t present a solid business plan.
Here are some other ways you can get funding for your business:
- SBA-guaranteed loans: A business loan issued by a bank or online lender that is partially guaranteed by the United States Small Business Administration (SBA).
- Crowdfunding: These websites allow people to donate to a fund that you can use to start and grow your business.
- Investors: Anyone could be an investor, including friends and family. Investors loan the company money in exchange for an agreed-upon share of the company.
- Personal: You can opt to use your personal finances to fund the business and pay yourself back as the company turns over a profit.
6. Apply for Licenses and Permits
Even if someone has years of experience working with concrete, when that person becomes a business owner, licenses and permits ensure they operate within state and local regulations. Every state is different for legally operating as a concrete contractor, so it’s best to start with individualized research that pertains to your service area.
In general, concrete contractors may need the following:
- State-provided concrete license or commercial contractor’s license
- City-provided concrete or masonry license
- State sales tax permit
- Resale certificate
- Certificate of occupancy
You may benefit from consulting with a local small business lawyer who can offer guidance and assistance in obtaining the licenses, permits and certificates required in your service area.
7. Open a Business Bank Account and Credit Card
All businesses should have their own bank account and credit card to keep their finances separate from the business owner’s personal bank account. Doing this makes it easier to track the company’s income and expenses. Even if the business is run as a sole proprietorship, having separate financial accounts can make the business owner’s life easier.
A company can also opt to get a credit card for business-related spending. This can make tracking expenses even easier and often comes at a better interest rate than a personal credit card.
Opening a business account or applying for a company card is fairly similar to opening a personal account. If the business owner knows who they would like to bank with, they can bring their legal documents to their bank and open the account on the same day.
Always call ahead before going into the bank to ensure you gathered all the necessary information. Legal documents that you need to bring to the bank may include an Employer Identification Number and documents proving the business is registered as a legal entity.
8. Insure your Business
When first starting, many businesses may overlook getting business insurance. However, it’s truly the best way to protect a business in the event that something unfortunate takes place at work.
While there are many insurance policies that a business could purchase, general liability insurance is the most comprehensive policy that acts as coverage for all business situations and protects everything from injury to property damage. If you’re looking for more individualized policies, you might want to consider the following insurance:
- Business property: Coverage for the equipment owned by the company.
- Equipment breakdown insurance: Breakdown insurance offers coverage that can help with the cost of repairing and replacing equipment that has run into mechanical issues.
- Worker’s compensation: If an employee is injured on the job, a worker’s compensation policy helps the employee receive payment while they can’t work.
- Property insurance: If the business owns a physical lot, building or workspace, property insurance covers it.
- Commercial auto: Insurance that covers any vehicle the company owns.
- Professional liability: This coverage protects the business and the owner against clients who claim negligence or malpractice against the business.
9. Build Your Team
Now that legalities and insurance are in place, it’s time to build a reliable team of employees. Concrete companies take a lot of work, and in many cases, require more than one person. From marketing to management to labor there are multiple parts of the business that may need hiring out.
Here are some positions to consider hiring:
- General manager: A general manager is someone who can handle all aspects of the business while others report to them. A general manager may take on the responsibilities of scheduling, staff management, accounting, job estimation and more.
- Accountant: An in-house account is helpful if the company has a considerable amount of cash flow. If the company is small enough, a general manager can do the basic bookkeeping while a certified public accountant on retainer can handle the other larger accounting tasks, like filing taxes.
- Concrete foreman: The foreman is the head of each project and takes on the supervision of the concrete laborers that get assigned to the job.
- Laborers: These are the concrete specialists on the job site to assist in and complete the projects from start to finish.
- Marketing manager or coordinator: A marketing manager or coordinator creates, maintains and oversees the making of marketing materials such as a website, social media pages and physical marketing materials.
A business may not need to fill every one of the above positions while it’s in its startup phase. Instead, you can use this as a reference as the team grows.
10. Develop Marketing Materials
As the company launch gets closer, get your name out there and start securing clients. Marketing is all about advertising a business and bringing in brand awareness through different channels. From a website to social media and billboards, here are some of the most common marketing materials to create while starting a concrete business.
- A logo: A logo should be unique yet easy to recognize. Make sure it’s not too close to another brand’s logo or it might cause confusion.
- A website: A website is essential for practically any business. This is where you can list your services, show off your work and list contact information. A project quote page or calculator may also be a helpful resource for potential clients.
- Social media: Instagram and Facebook are the two most popular social platforms for businesses. While you can use social media to generate organic leads, you might also consider using ads to promote the business.
- Emails: As the business grows, you can collect email addresses to which you can send promotional emails and newsletters. During the startup phase, decide on the email service that works best for the company and start collecting email addresses.
- Blog: Many businesses add blogs to their websites to boost their search engine optimization and position themselves as experts in their field.
- Physical marketing materials: While digital marketing is an effective method to grow your brand awareness, you may want to consider using handheld materials like business cards, flyers and brochures that you can hand out at networking events.
11. Rent or Purchase Concrete Equipment
With funding secured and a team to back the business, it’s time to get your hands on the right equipment. Regarding equipment, you have three options: renting, leasing or buying.
For equipment that the company will use every day, it may make sense to purchase, but don’t overlook the option to rent. Renting construction equipment is often a money-saving solution for jobs that require specialized equipment that employees won’t use daily. Renting equipment can also save the company time since you aren’t in charge of transporting and storing it.
Whether you decide to rent or purchase equipment, here’s a brief list of the equipment you may need to start a concrete business:
- A portable concrete mixer
- Concrete truck
- Groove cutter and edge saw
- Laser level
- Hand sprayer
- Concrete grinder
- Water pump
- Concrete vibrator
Not all concrete businesses are built the same, so you may not need all the equipment listed above—sometimes you may need more. Now is the time to consider all the equipment you’ll need to complete even the most complex jobs and decide on what to purchase or rent.
12. Launch Your Concrete Business
After all this preparation, you’re likely feeling both excited and anxious about officially starting your concrete business, but there is still plenty of work to do. As you open your business, start bidding on and securing projects for the company.
Whether the company focuses on pouring concrete for residential or commercial projects, you are now part of a $76 billion and growing industry. Here’s to a lucrative business as a new entrepreneur!
Starting a Concrete Business FAQ
Now that you know the basics of starting a concrete business, you might have a few questions. Here are the answers to the most commonly asked questions about starting a concrete company.
Is a Concrete Business Profitable?
As with many businesses, owning and operating a concrete company can be profitable as long as you plan accordingly and use correct business practices. While there is no guarantee that starting a concrete business will turn a quick profit, research shows that there is considerable growth potential in the industry.
The only way to determine if your concrete business can be profitable is to research, analyze and plan. Look at your competitors, target audience and the cost of starting and operating a business. With this information, you can determine if there’s a need for a new and improved concrete business.
How do I Advertise my Concrete Work?
A large part of owning and operating a concrete business is attracting new clients. That is where advertising and marketing come in handy. Here’s how you can advertise your business:
- Social media ads
- Email marketing
- Billboard advertising
- Yard signs in front of completed projects
- Logos on employee wearables
- Networking with non-competing contractors
- Create a Google Business Profile
- Post completed work on social media
- Encourage satisfied customers to leave reviews on Yelp or Google Business
- Boost your website’s search engine optimization
What Makes a Good Concrete Contractor?
The number one thing people look for in a contractor is proven experience. Even if the business is new, you can reflect on the past experience you and your team gained before starting the business.
One way potential customers can see your proven experience is through customer testimonials and reviews. If you have a well-satisfied customer, ask them for a testimonial that you can publish on your website. And it never hurts to ask past customers to recommend your business to their friends and family for future projects.
A good concrete contractor is dependable and follows through with set deadlines. If you cannot complete a project by the predetermined deadline, clear communication is essential. Kindly explain to the project owner the difficulties you’re experiencing and ask what you can do to set it right.
How do you Bid on a Big Concrete Job?
If you’re in the concrete business, there’s a high likelihood that bidding on jobs will become a regular part of life. A construction bid is when a contractor — in this case, a concrete company — submits a proposal to a potential client to “win” the project over other contractors.
The bidding process helps the potential client compare and contrast each contractor and what they can contribute to the project. All bids should include the estimated cost, scope and schedule of a concrete project. A well-written bid can give you a leg-up against other contractors since it shows that you’ve already put a significant amount of thought into the project before winning it.
Here are the elements that you must place in a bid:
- Contact information: Place the names and contact information of the concrete company and the potential customer at the top of the document. You can also list the name and address of the project here.
- Project scope: The scope is a written summary of the bid, it should include the grade of the work, the schedule, materials, costs and anything your team may need to complete the project.
- Existing conditions: A contractor should always perform a site assessment before preparing a bid. It can show any documentation of the existing conditions at the worksite and what must be done to remedy any pre-existing issues.
- Estimated costs: This section gives the project owner an estimated cost for all the materials and labor the project will require.
- Payment terms: Set out your payment expectations, including how and when your company expects payment.
- Relevant documents: This is where you’d add any necessary permits you may need and information about other teams that may have a hand in the project.
- Work schedule: The construction schedule is more than the start and end date — it should also list various milestones along the way.
- Formal bid and signature: The end of the bid document must include a formal statement of intent to provide services along with a signature from all owners of the concrete company.
Get the Equipment You Need
Now that you know how to start a concrete business, it’s important that you have all the right tools and equipment to get you started. When you’re first starting out, purchasing equipment can be expensive and leave you with large monthly payments. Instead, consider renting equipment to save your business money and time.
With service areas in all 50 states, BigRentz is readily available with specialized equipment for all kinds of construction projects.