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“You should read this if you want to develop a construction company.”

Why approximately 90% of construction enterprises fail within the first year or two of operation?

This is because there are a lot of contractors who are excellent on the job but lack of business knowledge. They cannot generate new leads, win projects, or supervise a team.

The following strategies will allow you to establish your firm on a solid foundation and expand it indefinitely if you execute them closely, which are provided below. For that, you need help. We are here to provide you with an estimation for busy contractors.

For contractors and subcontractors, find out more about Construct QTO. We can assist you.

Strategy 1: Choose an Area of expertise

Choosing a specialism will be the first step in launching your construction business. This will depend on your prior experience and overall goals.

Typically, subcontractors (smaller projects) and general contractors (larger contracts) rarely earn that much profit on the projects between 10-30% profit.

Both have advantages and disadvantages, but ultimately, while deciding what to specialize in, consider the following factors:

Residential vs. Commercial (or both)

Most development construction company have experience working on both residential and commercial projects. Your ability to fund the initiatives and your cash flow make the most difference.

You can often gain a deposit of 10 or 20 percent to get the job started in residential projects. You get to work right away after submitting your offer. Your close rates will probably be significantly higher because there is typically less competition.

The disadvantages are that they are smaller projects and that because it is their own house, the homeowners will be quite fussy as you deal with their “feelings.”

They are often bigger projects with higher contract values when they are commercial. There is more competition and typically no upfront payments made for deposits.

Within three months of beginning the employment, you typically receive your first payment and submit a monthly invoice. For business, having a solid credit line with your bank and favorable conditions with your supplier are essential.

Strategy 2: Begin to look for proposed projects

Most new contractors are stuck at this point and cannot expand their businesses. Finding projects to submit your proposals for and win contracts has never been simpler.

One benefit of working with Construct QTO is that we may use our national project database to assist you in finding the projects in your region.

The secret to lead generation is to establish a consistent system of leads from which you can continuously submit bids for projects and increase staff.

Your chances of getting jobs increase as you place more bids.

Use lead generating platforms like Dodge, Building Connected, or Home Advisor if you don’t mind investing in the effort on your own project search.


Strategy 3. Begin Estimating and Submitting Bids

Estimation is your business’s lifeblood. If you want to establish your construction firm and guarantee your success, you must make a commitment to consistently submitting several bids each month.

If you have the funds available, I suggest you hire an internal estimator and set up an office for them so that you can focus on running your business and bringing in new clients.

The main issue for contractors is a lack of time to estimate projects and interact with potential clients. The goal is to have your own personnel do your estimates as you seek and accept more construction bids.

In addition, Construct QTO is an expert in estimating, therefore we can help you with your estimates.

Strategy 4. Get your Insurance and Licenses in order.

While you are estimating work and your firm is operating profitably. You should check that you have all your insurance and licenses right away.

That this is number 4 strategy shows it is not as crucial to starting your business as most people may believe.

Before you even receive your first potential project, it shouldn’t take you six months to set up all your licenses and insurance. There is a delay between when you submit a bid and when they accept it, so you may apply for your license and arrange all your insurance within that time.

Both general liability insurance and workers’ compensation insurance are often required.

You may get it set up by contacting a commercial insurance agency.

This will depend on your city, county, or state for the license, however in certain cases you may get one by just applying to the building department.

Before applying, you might need to pass a test if you’re applying for a specialty position or something like a general contractor.

Strategy 5.Need to Follow Up

Estimating and bidding has a follow-up phase that is by far the most crucial.

A lot of contractors spend hours creating a bid, submit it, and never follow up to see where their prices in relation to their competitors, or even invest any time in getting to know the estimator or the project manager on the other end.

In my article, how to get a successful construction business, I highlight the importance of following up and building relationships with clients/estimators. You will have a preference when it comes time to award projects.

Many contractors avoid doing this since it takes so much time, but it takes longer to submit 10 proposals and win one than it does to submit only four offers and win one. And when you establish that relationship with the client, they will keep using your services repeatedly.


Although launching a construction firm might be quite difficult, using these five strategies can increase your chances of success.

With the aid of our consulting Construct QTO we can assist you at any stage of the procedure, including lead generation, project estimation, and even follow-up.

Send us an email if you’re interested, and we can go into more information about your business.

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