Starting your own business can be an intimidating but exciting experience. You get to harness all of the skills you cultivated and put them to use, you get to provide people with a product or a service, and you get to become your own boss and ditch traditional work life. While the excitement enough is sure to convince thousands of people a day to become entrepreneurs, it’s still nerve-racking when you think of all the new challenges that come with this major shift in your life.
Some of the most popular self-owned businesses are labor businesses. Construction, demolition, auto mechanic, carpentry, landscaping, and general contract work are great opportunities to get to do what you want and help others, not to mention that they can be highly lucrative. As you’d expect, you need to prepare for a lot when building your enterprise from the ground up, but it’s more than doable with a little knowledge from the business and marketing perspective of the labor industry. Here are some of the things you need to know to bring your business to life out of scratch.
1. Create a name and brand
Branding is part of the vast functions of marketing, but you want to know just what it is that you represent. This has to relate to your business plan because a landscaping business will require different branding than auto mechanic work. Come up with a name that’s serious, but has memorability. Many self-made business owners decide on a clever and catchy name, but it might not come off as serious. For this line of work, you need something that sounds dependable and can help your brand appear reliable. Making customers feel they can place their trust in you means choosing strong or powerful words for your slogan. This helps the name come off as equally valuable.
The first step for your business is coming up with the name and finding one that makes sense for your work. Try brainstorming a big list, then cut it down to 5 or 10, then make a pro and con list of which ones you do or don’t like, and it never hurts to ask for input from family or friends.
2. Filing for a business license
Once you have your name chosen, you want to make it a legally valid business. There are three main types of business classifications: sole proprietorship, incorporation, and partnership. The sole proprietorship is the most common for small businesses, and it simply means that you and your business are one and the same. All legal culpability is on you, as well as all income, debts, and finances. Incorporation is the opposite where it’s more complex, and it creates a separate business entity from you. Incorporating requires a lot more paperwork and documentation, but it allows for protection against certain debts, and you can even issue shares, but this is unlikely for a labor business. The partnership is as expected. It’s a sole proprietorship split among two or more individuals who share those responsibilities like finances.
For your interest, a sole proprietorship or incorporation are the two you should consider picking. Incorporation helps protect you from certain legal issues if they arise, and a sole proprietorship makes more sense when starting small.
3. Additional paperwork and licensing
Every business needs paperwork and licensing that’s relevant to their work. Restaurants need liquor licenses, and any business that uses vehicles needs licensing that allows them to operate these work vehicles. This is often done through your municipal government. Labor businesses fall into this category because you’ll more than likely be using company vehicles for equipment and getting to and from job sites, as well as zoning licensing for working in fields like plumbing, electrical, or heating. Labor businesses require this licensing because of the risks associated with the work.
Other paperwork and documentation you need is business insurance. You can get this through various brokers, and even combine it with your other personal insurance (in case something goes wrong on the job site, it’s handy to have) for protecting you and your assets. Any employees you bring on have to be protected under insurance, and you have to comply with safety regulations.
4. Purchasing the necessary equipment
Now, it’s on the fun part – shopping for your equipment. Whether you’re an electrician or a demolitionist, you need the right tools for the trade to provide efficient services for customers. If you look here, you can see that work trailers can be useful, depending on your job site. An electrician may not need it, but if you want to run a landscaping or construction company, you definitely need a reliable work trailer. Pickup trucks with capable towing capacity and bed space are also a must, and allow you to store your tools in them when you purchase a lockable tool chest that can be installed in the back. Drills, drill bit sets, hammers, nails, screws, measuring tapes, pliers (multiple varieties), and saws are among some of the handy tools that every laborer should have in their toolbox.
You must provide yourself and any employees with safety gear as well. Earplugs, hi-vis vests and clothing, steel toe boots (employees can provide these, or you can offer to match them on it/half of the cost), hard hats, safety glasses, gloves, respirators/masks, harnesses, and earmuffs are things you should have plenty of. You’ll run out of a lot of personal protective equipment (PPE) very fast, but putting yourself and employees in harm’s way is disastrous for your business and is morally wrong.
5. Creating a business bank account
Running your business expenses through your personal account isn’t advised. If you run a sole proprietorship, it could be manageable because you’re not separate from the business as an entity, but it can get rather confusing and hard to manage your money this way. Going to your bank or a business-oriented bank to open up an account in the name of your business is an excellent way to keep your affairs in order and make them more manageable. With this account, you can open up credit lines to help pay for supplies or get a business credit card, which makes it easier for tax deductibles during tax season. You can also set up a budget when you make your new business account to help track spending and forecast how much money you need to break even, make a profit, and redistribute funds to help your business stay healthy financially. Opening your business account also allows you to build a credit score for it, which is good for loans and credibility for customers.
6. Hiring employees
It’s entirely possible to run many labor or contractor businesses solo. Plumbers, electricians, HVAC mechanics, and carpenters do it all the time because they want to limit liability, or keep payroll between them and the business alone. The problem with working solo is that you get less done, and you may miss out on more opportunities to make money with contracts. Hiring employees is advised if you’re stable enough to support them with income, cover their insurance, and the business needs to grow. Just like finding a job, there are plenty of resources out there now to help you find good applicants. Experience is often a must, but sometimes, you can give some wiggle room to help a young kid out of college. Hiring employees should be a thorough job on your part because you’re trusting this stranger with your source of living, and if someone messes something up, you’re on the hook at the end of the day because it’s your business. Experience, good references, good grades out of trade school, and someone you like during the interview process are the most important indicators of a potentially good investment in a future employee.
7. Creating a marketing plan
Labor businesses have a problem with how well they are marketed. Sometimes, a great business could be underperforming not because of the work’s quality, but because no one knows they exist. Create a budget for things like advertisements, a website, radio spots, TV ads, and graphics that you can use to get the word out. Going back to branding, you want a recognizable logo with a distinct color scheme that will allow potential customers to get familiar with you. With a good marketing plan, you can help improve your potential for profit and give your new business legs.
Becoming a business owner is getting easier and easier, but that doesn’t mean it’s without challenge. These seven steps are essential for beginning your dream of being an entrepreneur. In the labor industry, you have similar and different needs to be met before you can be an operating enterprise, but using this advice, you can see how it can become a reality sooner than you think.