Considerations for Starting A Construction Company

Starting a construction company can be a profitable venture under the right circumstances. So if you have experience in construction and want to start your own company, be sure to research the necessary business considerations, requirements and laws before launching your business.

Tips for Starting a Construction Company

Pricing and Estimating Process

Develop a pricing and estimating process for the work you intend to perform.  Most clients want a fixed lump sum price for the work they want done, so make sure you fully understand all your direct labor, materials and equipment costs, your overhead costs, and your profit expectations for the work you quote.

Just ask Scott Mayhew, owner of Scott Mayhew Contracting Ltd. in Penticton, who attended several Small Business BC seminars and went through the Community Futures Okanagan Similkameen self-employment program to start his business six years ago.  From experience he says, “Clients want accurate fixed quotes and this can be done through construction estimating software. However, accurately quoting for residential renovations can be tricky because who knows what we will encounter when we’re doing the renovations”.

Completion Schedule

Scott continues to say, “The key is to be open and up front with your clients from the beginning and throughout the project so they know about the potential unknown variables that may arise during the renovation of their homes.”  So make sure you have enough time for your projected completion schedule to properly perform the scope of work.  Always put some contingency time in the schedule; minor delays, weather, equipment problems, etc., that may occur.


Develop a comprehensive contract form to use for your work with clients.  Make sure all your contracts have at least a well defined scope of work, good terms of payment, an achievable schedule and a good extras/claims clause.  Do not do any work on verbal orders; get everything in writing, always, no exceptions.  “Be sure to document all change orders throughout the course of the project. There are so many aspects in a job that it’s essential to be detailed and clear within the contract to protect us and our clients,” says Scott.


Insurance is another important asset of your construction company.  Secure the proper business insurance, including WorkSafeBC coverage, to better protect you and your company against claims for personal injury and property damage.  Insurance will provide you with protection of those claims, which may arise out of your company’s operations.

Incorporate Your Construction Business

Bridget Field of Small Business BC recommends, “Due to the nature of the industry, being medium to high risk, we advise construction companies to consider incorporating in order to provide limited liability protection of their personal assets, in addition to having business insurance.” If you want to learn how to properly incorporate yourself, Small Business BC has a listing of seminars and sells an incorporation kit, designed to assist business owners who want to incorporate their business without using a lawyer.

Business Permits & Licenses

Visit your local municipality or visit to find out what types of business permits and licenses you will need to secure for your new company and the type of work you intend to perform.  Secure all required insurance, permits and licenses before you start your first job.

What advice would Scott give aspiring entrepreneurs? “Work within your means and try not to grow too fast.  I recently downsized my staff from thirteen to four so I can have a more hands-on approach.  I find clients are happier because I’m at the job site for quality assurance,” says Scott.

Careful planning and attention to detail will ensure that your construction company stays afloat during the first few years of operation. With the qualified task force, proper business considerations, legal requirements and a desire to succeed, your construction business will reap benefits.

Here to Help

No matter what stage of business, or what problem you face, Small Business BC offers a range of seminars and one-on-one advisory sessions to suit any business.

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