Staffing & Employment
What type of construction business do you have or want? General Repair? Painting? Asphalt, Cement and Masonry? Basement Refinishing? Roofing? New Construction only? The list is exhaustive. Except for the skilled trades where a government agency or entity requires licensing (i.e., electrical, plumbing, HVAC, etc.), most people who start a small construction business are generalists who can and will do almost anything for a customer. Be sure to investigate local licensing requirements, as in addition to a general business license, most construction or contracting businesses need specific licenses to operate legally. Also, a surety bond is not something many business owners think about, but in almost all cases construction businesses need construction bonds in order to operate legally. Finally, depending on the nature of your work and whether you employ workers directly, you will need several types of business insurance. Consider getting general liability insurance, as well as vehicle and property insurance. This will protect you against claims for personal injury and property damage, and cover the costs of legal proceedings. Most states also require businesses to carry specific insurance, such as workers' compensation, unemployment and state disability insurance. Organizationally, you will probably want your construction business to be a Limited Liability Corporation (LLC) to protect your personal assets.
Finding Talent and Staff
In all likelihood, if you have chosen a construction specialty for your small business, you are the subject matter expert in the technology and techniques required for your new small business. So, as you add staff to your LLC, you will be the teacher and quality control/subject matter expert. When you get larger jobs or ones that have tight completion deadlines, it is highly likely that you will need people working for you, at least on a temporary basis. Things to look for in filling these staff needs are: ability to learn quickly, reliability/dependability, and ability to do manual, as well as some skilled, work.
If you are not the subject matter expert and are instead the financier, accountant, marketer, grant writer, etc., then you will have to recruit or develop someone with the technical expertise your chosen business requires. For instance, if you want to become the expert in converting basements into rental apartments, your creative and marketing contributions may be the key to success of your small business and not the hands-on work of doing the renovation or construction. In other words, you are the “idea” person, and that’s what you enjoy doing most. There are many local trade schools that specialize in construction related skills and knowledge endeavors which will probably have students or graduates with the talent, knowledge and skill your business needs. A quick internet search on “trade schools near ‘____’ (fill-in the geography or zip code)” will give you a great starter list, and each institution’s website will provide you with the latest cutting edge training being offered. If you are acquiring someone else’s small business because they are retiring or getting out, it is very common to include as part of purchase negotiations an assurance of technical knowledge and help for a defined time period. This allows you to continue to operate the business while you find the new technical expert you will need.
Will you need help in your home office answering the phone, designing proposals, doing billing, estimates? If so, consider hiring someone you know who may need a little extra work on the side; or, perhaps, it is a spouse who would like to assist. A local high school or college may also have a co-op program where student hires might be a reality. The key point is to make sure you are well connected to the sources of finding skilled staff.
In today’s environment, it is probably best to minimize the number of full-time employees on your payroll. Not only do you have a number of tax obligations (social security, Medicare, unemployment, etc.), but legislation requiring paid benefits continues to place the burden of things like medical insurance, paid days off for sick leave, paid holidays, etc. squarely on the backs of business owners. Part-time and seasonal workers are a smart way to go.
Please refer to the Human Resource information for further suggestions and ideas on finding and hiring employees and staff.