Construction company advice with a start up idea

[Dan149]

Hello, I am 20 years old from Northern Ireland with 5 years' construction experience, 2-and-a-half years spent working in a high-end shopfitting firm as a carpenter that are now worth over £50m and I watched them grow from the start.

We built custom-made furniture for high-end clients and fitted it, so from the age of 15 I have seen what clients expect.

After this I worked in various housing developments, commercial buildings and picked up on other trades. I've been to London and been impacted by the financial and business side as well as attending events and I learnt alot of valuable knowledge.

Mainly every job I have worked on has been alongside a supervisor, manager or owner of a company so I have got to find out a lot about how to successfully run a company.

I've always wanted to start my own company and what I want to do is have my base in NI while doing work in UK although mostly in Ireland like my old firm. I'm not sure what effect Brexit will have on this though, which is why I'm researching.

I want to have a construction company that offers complete home renovations, from small demolition works to completed finishes. I have alot of contacts in the industry, and I want to offer joinery & painting services mainly at the start through workers I know and myself then I will hire other sub-contractors in to complete works when necessary.

I plan to pick a lot of my work from people at auctions, I am also very interested in property so this will give me access to commercial and residential premises that they own to renovate and/or buy. I am more interested in property than construction but getting a buy-to-let mortgage at my age is extremely hard which is why I'm taking steps to achieve this.

I would like to pick up clients that I can offer a bespoke service to them to complete their homes and once I have funds and see a deal I want at auction as I'm already attending, I will snap it up, renovate and remortgage. I have a lot on my mind with property but I need to gradually make my way there.

How hard would it be for me to start a limited company at 20 and access loans fit to pay for the companies necessities such as travel, accomodation, insurances, tools, wages etc?

I also want to know what effect Brexit will have on me as I plan on mainly recruiting NI workers to travel down south as this saves us a lot of costs. Will I need to pay 2 types of insurance as I will be mainly working in Ireland but I will also do the odd job in NI?

What type of insurances? And would it be best putting a sort of "manager" in between myself and clients to ensure the funds are received?

A lot of people have problems in the construction sector with payments, although I will let clients know it needs to be every 2nd week to ensure workers get paid.

Any advice given is appreciated and I hope youse all have a good day

 

[Scalloway]

How much could you raise by yourself to get started?

 

[Mark T Jones]

To be honest I got lost half wAy through that, which is a reflection of

1. My short attention span
2. A lack of focus or clarity in your thinking.

That said, it’s great that you are concerned about getting paid - something many start ups overlook, and I’ve no doubt that there are the bones of a business in there somewhere

Take a big step back and think about where you can start relatively easily then build a plan to scale that up towards where you want to be

Trying to do everything is never the foundation of a good business

 

[Mr D]

You will need funds to pay people. You cannot tell them to wait until you get paid.

Up to you what credit you give and to whom - and you will find people unwilling or unable to pay. Depending if you lend money to big firms you may find one or more of them going under owing you money that you may never see.

 

[Dan149]

How much could you raise by yourself to get started?

Maybe around £5k in a few months but the fact I want NI workers to come to Dublin I will need to pay for accomodation if they are required to stay overnight. I would need atleast a month of funds saved up to secure this. I also wanted to make sure I have atleast 2 - 3 months of wages saved to ensure my workers are paid without the reliance on clients. Any materials bought can be done so through a 0% for 12 months credit card but my main problem is wages & accomodation.

 

[Dan149]

To be honest I got lost half wAy through that, which is a reflection of

1. My short attention span
2. A lack of focus or clarity in your thinking.

That said, it’s great that you are concerned about getting paid - something many start ups overlook, and I’ve no doubt that there are the bones of a business in there somewhere

Take a big step back and think about where you can start relatively easily then build a plan to scale that up towards where you want to be

Trying to do everything is never the foundation of a good business

The start was mainly me introducing myself as this is my first post so apologies if it was too long. My end goal that I want is properties, this is merely just a way to get myself there.

I have been thinking of different ways to achieve my goals for 2 years now and I think starting of through a construction firm is my best guarantee as I have family members who are architects, engineers, joiners, painters and brick layers and have also built many other trade contacts.

Maybe providing small demolition works is my best way to go, once I am in the game I can then scale it up as I build more contacts but before I start I need to absorb as much info as I can to make sure my business is a success.

 

[Dan149]

You will need funds to pay people. You cannot tell them to wait until you get paid.

Up to you what credit you give and to whom - and you will find people unwilling or unable to pay. Depending if you lend money to big firms you may find one or more of them going under owing you money that you may never see.

My starting goal is residential premises meaning that I am not relying on lending big credit to larger companies but I am relying on home owners who have just recently got homes at auction. A lot of people at auction already have the funds necessary to pay me as they are buying houses cash but they will still try to stretch their funds as much as possible which is why I need to let them know that I need the money Max every 2 weeks. I still want to ensure I have 2 - 3 months of wages to fall back on for my workers which is why I'm considering a loan.

 

[Mr D]

My starting goal is residential premises meaning that I am not relying on lending big credit to larger companies but I am relying on home owners who have just recently got homes at auction. A lot of people at auction already have the funds necessary to pay me as they are buying houses cash but they will still try to stretch their funds as much as possible which is why I need to let them know that I need the money Max every 2 weeks. I still want to ensure I have 2 - 3 months of wages to fall back on for my workers which is why I'm considering a loan.

Then figure out what action you will take when someone is late paying or does not pay at all.
Just because they have the money does not mean they will pay you on time or in full when asked.

 

[estwig]

I did this for years, it's easy and still goes on today, very much so.

It only works for loft conversions and house extensions to home owners and you have to look credible, FMB and guild of master craftsmen are examples of t*ssers who will take your money and make you look credible. There are many more who will give you posh stickers with a gold crest.

Van on lease hire sign written, website, testimonials, business cards, etc. Geo targeted Adwords to generate leads, aim for winning 1:7 quoted for. Take a large deposit, plenty of people will pay, take large stage payments at the start of the job, walls going up looks dramatic people will pay, smaller payments towards the end of the job, leaving as little as possible for final payment. Get as much money as you can. as quickly as you can.

Materials are 30 days from date of invoice, stretch that another 30 days, you got 3 months credit, enough to finish a job.

Yay! You got a construction company up and running for an outlay of a few hundred pounds, all fronted by punters, builders merchants and lease hire.

This is why there are so many cowboys around, if you know how and are willing to blur the edges, it's easy!

 

[JessicaDarcey]

Before opening a new construction business, it is important to understand the amount of preparation and work that is involved. Establishing a new business of any kind is never easy, and there are always things to consider that may or may not be at the forefront of one's mind, even an experienced entrepreneur.
1. Put Together a Solid Business Plan
2. Find a Good Home Base for Your Startup
3. Get Your Legal Ducks in a Row
4. Understand Your Tax Requirements
5. Arrange a meeting with an insurance agent and talk with him or her about the coverages required for your business. You need to protect not just business assets, but also yourself should work-related injuries, personal liabilities, or damage to clients' property occurs. Both you and your business need to be fully covered.
6. Secure Your Financing

 

[bodgitt&scarperLTD]

Thanks Jessica, what was it you wanted to sell us?

 

[Gordon - Commercial Finance]

If you were in mainland UK (not NI I mean), then I would say that getting funding for a new start business buying vans, diggers and the likes would be possible, although I'm going to take a guess that you're not a homeowner? That makes things much more challenging as a new start business.

Being in Northern Ireland, there are far less finance companies wishing to lend to you, and so that adds another layer of difficulty. For example say out of the 10 lenders that will consider lending to a new start, 1 of them will lend in NI. I've secured funding for a couple of business buying construction equipment in NI, but it has always been fairly established businesses and has still not been too easy.

So if secured credit (against the assets themselves) is going to be hard, then unsecured will be even harder. @Mark T Jones may be able to comment on the availability of something like Startup Loans for companies in the construction sector? It tends to be a business model that lenders are a bit nervous of due to the level of corporate failures across the market. Not really my area of expertise though.

Its a good plan, and I think it is definitely achievable, but just bear in mind that lenders looking at you from arms length are going to perceive you as high risk, for a number of reasons.

 

[APW]

Being from NI myself I know from experience there is a wealth of help and guidance available.

First thing I would do is speak to the princess trust they offer small grants to people under 25 then contact Invest NI.

Invest NI will help you with your business plan (they will complete one for you) and put you infront of banks that work with them to help get funding.

The other bonus is that if they create a business plan and you can't get funding from a bank then they will fund you upto £25K (last time I checked) for start ups under 2 years.

Also check out nibusinessinfo.co.uk for help and advice.