The proliferation of interest rate cuts and the putative willingness of financial institutions to hand out loans more readily may indicate that it is finally time to start the building business of your dreams. You might be a tradesman that is finally confident in their skill-set and intuition and as a result, yearn to take on the adventure and rewards of being your own boss. You could also be an investor with a substantial amount of disposable capital that is seeking to participate in highly lucrative commercial builds. The possibilities are endless. But your motivation should not be. In any case, starting a building business in Australia is not everyone’s piece of cake, and there are many things to consider before taking that leap of faith.
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Drafting Your Building Business
Building an unsuccessful business is not only pointless, but it is also hurtful on a financial and psychological level. Building businesses that continually succeed are ones that have invested a lot of time and effort in drafting out the skeleton of the business. The key purpose of drafting is to construct a vision for your business – one that is capable of both sustaining itself during downturn periods and accelerating growth during expansionary periods. Don’t even think about registering your business before you have constructed a palatable vision. Being conceptually unprepared will only come back to bite you later on.
The best way to start imagining your intended vision is to divide this task into two components. Therefore, your company vision is composed of a core ideology and an envisioned future.
Core Ideology
Core ideology is the soul of your prospective business. Without it, you would be running a business that is only characterised by the products or services it produces. In other words, a business that has no defined values or no planned future. The core ideology can be broken down into two further components:
Core Purpose
Before you run off and start your business, you as a future director need to understand why you want to start this business in the first place. Is the reason for your business’ existence one that is worthy of pursuing? Is the sole purpose capitalistic, or does it implicitly attempt to contribute to a stronger social fabric? Either way, do not confuse the core purpose with targets or goals.
Core Values
Now that you understand why you want to create a building company, you should think about a set of enduring characteristics that will be valuable to your target market.
For Example
There are two prominent ways of building in Australia. The first is to build with raw speed and horsepower at the compromise of quality. This is extremely common in new builds that occur in newly created suburbs. They appear magically overnight for a reason. The second is to build with a rigorous loyalty to quality. This method is inefficient from a production perspective but demanded by affluent clients that appreciate finesse and craftsmanship. Therefore, you need to choose whether quality should be a core value of your building company if most of your clients are developers of new builds.
Even though core values should respond to changes in the industry, Lawpath believes that innovation should be a core value that should never be abandoned no matter the circumstance. Innovation is the key driver that differentiates stellar companies from the masses.
Envisioned Future
The envisioned future is where you want your building company to be in x amount of years. This future does not necessarily have to be one that can be achieved with your current capabilities. However, it does have to be one that you believe to be achievable.
For Example
We will be an industry leader in the construction of affordable housing within the Inner Sydney region
Registering Your Building Business
Now that you’ve assembled the key conceptual components of your building company, it’s time to add some features that will optimise business operations and maximise profits. You should select a company structure that corresponds to your company ‘s vision. Furthermore, you also need to ensure that you have applied for the relevant licenses that permit you to carry out construction work.
Choosing your business name
Selecting an attractive business name is just as crucial as brainstorming value-building strategies. Your name is your reputation. Thus, a disagreeable name may severely compromise the depth of your client pool. Once you have decided a suitable name, you should register an ABN number as this will augment the credibility of your business.
Choosing the type of business entity
There are three types of business structures from which you can select from:
- Sole Trader: Business run by one person who carries all the risk and receives all the returns.
- Partnership: Business run by a group of people who collectively share the risk and return:
- Company: The company is an incorporated entity that has a separate legal personality. This means that in most cases, the company will be legally liable.
The project of creating and running a construction business is a journey that can look intimidating, but it can also be extremely fulfilling. There is relative stability in the construction industry as there is always going to be a demand for the provision of housing. Your vision is the engine that will drive your building business to success in both favourable and unfavourable economic conditions. If you would like to learn more about the legal obligations of business owners, it is recommended you consult a Business Lawyer for further advice.
