Advice for new start building/construction firm

[New_Start_Construction]

Hi,


I am a qualified carpenter and have been for 12 years, I have also been working for the same firm for 11 years.

The company i currently work for has been sold to another building company and long and short of it they bought the business only for the long term contracts with public sector and private businesses.

They have no interest in carrying the staff over. This has led me to want to start up on my own i have decided to use 5k of my savings to get this up and running.



My initial options are to:

A) Start up as a carpenter/kitchen fitter which would basically be me on my own and use my contacts as and when I need them.

The benefits would be lower overheads as opposed to the other two options but the disadvantage is I would miss out the opportunity on Lofts, extensions and refurbs etc as around my way if you have a certain service on the side of your van people would only call you for that particular service and nothing else.

B) Start up as a building company (and possibly property maintenance). I could get a couple of the other lads from the firm on board and would mean we could tackle pretty much most building work.
The advantage is I would get access to the lofts etc and could provide a lot more services and generate a lot more of a turnover and in turn profit than option A. However would mean I would have the disadvantage of having the added burden of employing two additional people which is a massive burden and could ruin the business before it takes off.


I would prefer to go with option B but would drain my budget rapidly. A variation to this would be to market the business for the two and a half months I have left in employment to gather interest in the business with the possibility of having lined up enough work to successfully carry it out.

The second disadvantage is with the whole rouge trader lookout mentality, customers would want to see examples of previous works which might not be a problem however the previous examples would be work conducted in the old company's name. I have pictures of previous projects which I can add to a website etc.

My third and biggest issue would be generating work. I have registered with trader websites previously however have found that genuine customers have been few and far between and you can easily spend 100's of pounds before you get a decent job that turns over a decent return.

What will set me apart from the competition will be a corporate feel to my companies image. I've seen sprinter vans with pictures galore and full of writing of the services they provide. I simply want to go with an excellently designed logo, email, website and telephone number and possibly a mobile contact too.

This is my initial plan. And would like any suggestions of areas i may have overlooked, Ideas i could look into or experience from anyone that wishes to share.

Thanks in advance.

 

[ForbesWatson]

Hi,
Sorry to hear that your firm is being sold, but it's good that you are looking on this as an opportunity to do something for yourself.
My initial advice would be to do it. Speak to one other person you think may be interested in helping you and see if they want to do it with you.
As you take more work on you will always be able to take subcontractors on to help. This could be a cheaper and less risky option compared to employing lads from day one.

As far as marketing the business we have always been big believers in local networking groups, such as BNI. They are great to meet other local business owners and a great way to spread the word about yours.

The next thing I would do is put together a Cashflow projection to get an idea of how much money you think you may need to set up; for tools, van, signage, marketing etc.

We would be happy to help you with this, or if you would like to chat about any other questions relating to starting up please don't hesitate to contact us free of charge.

Good luck

Simon
Forbes Watson
Forbeswatson.co.uk

 

[alex-a]

Hi,


I am a qualified carpenter and have been for 12 years, I have also been working for the same firm for 11 years.

The company i currently work for has been sold to another building company and long and short of it they bought the business only for the long term contracts with public sector and private businesses.

They have no interest in carrying the staff over. This has led me to want to start up on my own i have decided to use 5k of my savings to get this up and running.



My initial options are to:

A) Start up as a carpenter/kitchen fitter which would basically be me on my own and use my contacts as and when I need them.

The benefits would be lower overheads as opposed to the other two options but the disadvantage is I would miss out the opportunity on Lofts, extensions and refurbs etc as around my way if you have a certain service on the side of your van people would only call you for that particular service and nothing else.

B) Start up as a building company (and possibly property maintenance). I could get a couple of the other lads from the firm on board and would mean we could tackle pretty much most building work.
The advantage is I would get access to the lofts etc and could provide a lot more services and generate a lot more of a turnover and in turn profit than option A. However would mean I would have the disadvantage of having the added burden of employing two additional people which is a massive burden and could ruin the business before it takes off.


I would prefer to go with option B but would drain my budget rapidly. A variation to this would be to market the business for the two and a half months I have left in employment to gather interest in the business with the possibility of having lined up enough work to successfully carry it out.

The second disadvantage is with the whole rouge trader lookout mentality, customers would want to see examples of previous works which might not be a problem however the previous examples would be work conducted in the old company's name. I have pictures of previous projects which I can add to a website etc.

My third and biggest issue would be generating work. I have registered with trader websites previously however have found that genuine customers have been few and far between and you can easily spend 100's of pounds before you get a decent job that turns over a decent return.

What will set me apart from the competition will be a corporate feel to my companies image. I've seen sprinter vans with pictures galore and full of writing of the services they provide. I simply want to go with an excellently designed logo, email, website and telephone number and possibly a mobile contact too.

This is my initial plan. And would like any suggestions of areas i may have overlooked, Ideas i could look into or experience from anyone that wishes to share.

Thanks in advance.

I would play safe as christmas is just around the corner, you could jump and work for lots of agencies and perhaps at weekends work for another limited company, this will get your foot in the door to better things.

I would keep the £5.000 safe, you have a skill and the country is turning to better things, I hope this helps.

Thanks

Alex

 

[New_Start_Construction]

Thank you for the replies. ForbesWatson If you could kindly pm an email address where i can forward my projections etc.

Again thanks guys

 

[businessfunding]

I would suggest that you see this more in terms of long-term goals with steppig stones to achieve them

Hence you may set out as a sub-contractor but with a clear goal that when turnover/cash in bank or whatever is £xxx you will start to take on your own projects

Perhaps in the meantime start putting together a team of trades who you can project manage.

As you have pointed out, cash is key here - your industry is sadly not great for cashflow (mostly), so do try to work within your reasonable means.

Whilst my business is to lend I would strongly suggest you don't rely on borrowing until you are confident that you have a sustainable work & cashflow.

 

[New_Start_Construction]

Thanks for that.

Over the years i have worked with people who have gone it alone and have been unfortunate to fail for various reasons which i have factored for and as you suggest most of the failures have been due to cash flow issues.

I have prospects of ongoing work after, for another company and will not take the final leap as it were until i have generated enough leads and have booked in a few projects to get me on my way.

I have a good list of contacts that i can call on when necessary only disadvantage is most of the good tradesmen are either booked up for weeks and could cause an issue around whatever project i have booked in.


I have approached a few of my current colleagues in my opinion they would compliment the business and produce a superior quality of work. They will be more than happy to be on board however with bills to pay there would have to be the opportunity of ongoing work.

From my budget start up would be circa 1.5k with projected monthly costs around £250 without any works. Obviously once projects have been booked/started this will rise and will vary depending on what project is being worked on.

Hope this gives a little more insight.

 

[Gecko001]

Thanks for that.

Over the years i have worked with people who have gone it alone and have been unfortunate to fail for various reasons which i have factored for and as you suggest most of the failures have been due to cash flow issues.

I have prospects of ongoing work after, for another company and will not take the final leap as it were until i have generated enough leads and have booked in a few projects to get me on my way.

I have a good list of contacts that i can call on when necessary only disadvantage is most of the good tradesmen are either booked up for weeks and could cause an issue around whatever project i have booked in.


I have approached a few of my current colleagues in my opinion they would compliment the business and produce a superior quality of work. They will be more than happy to be on board however with bills to pay there would have to be the opportunity of ongoing work.

From my budget start up would be circa 1.5k with projected monthly costs around £250 without any works. Obviously once projects have been booked/started this will rise and will vary depending on what project is being worked on.

Hope this gives a little more insight.

What do you mean by "more than happy to be on board"? Do you mean work as a salaried tradesman or as paid on an hourly basis if and when the work is there?

 

[New_Start_Construction]

Happy to work as either salaried or on a day rate.

Obviously salaried would mean more of a commitment on my part to generate enough work to stay afloat.

Day rate would be helping me out depending on their availability and whatever commitments they would have at the time.

 

[businessfunding]

The key point here still revolves around cashflow & employing (whether subbies or PAYE) makes that even more crititical

Your start-up budget isn't huge (but isn't tiny either) - as has been suggested, sit down with a cashflow forecast & start working with it

Be honest (bordering on negative) with your assumptions - this is probably the most valuable exercise any start-up can do.