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Starting a construction company? Keep these things in mind

Starting a new business in California can be exciting and daunting at the same time. There is no guarantee it will be a success, but with the proper legal help and advice, a new business owner can start off on the right foot.

While forming any type of new business can have its own set of challenges, the formation of a construction company is unique. The industry provides a service that no one else does, and can be highly volatile.

Beyond the requirements of forming a business, the Small Business Administration mentions several things that someone considering starting a construction company should keep in mind:

  • Licensing, bonding and insurance. Construction companies need to be properly licensed and bonded, and carry the necessary insurance.
  • Regulations. The construction industry is heavily regulated. Business owners need to stay on top of worker safety and other rules.
  • Hiring. The construction industry has four main ways of hiring workers: direct hires, independent contractors, subcontractors and labor brokers. The relationship between company and worker changes depending on how the worker was hired. Which type of labor is best for your business may depend on where you are located, the size of the company and other factors unique to you.

These and other factors go into the formation of a new construction business. Good preparation is the best way to minimize the chances of legal problems later. A business attorney with experience in the construction industry will know the potential pitfalls and opportunities in the formation stage.