It’s an attractive time to start a building business in Australia. Strong sector growth, growing demand for both residential and commercial projects, and a steadily rising population are leading many Australians to ask how they can get in on the action.
Starting a building company looks complicated on its face. However, by tackling the process one step at a time, you can navigate the challenges that lie ahead and get started on the front foot in the construction industry.
This blog outlines some of the essential steps of starting a building company in Australia.
Even before you start planning on laying bricks or establishing building foundations, you first need to determine how your business will be structured. The company structure will define how you run your daily operations, and which licencing and insurance requirements will be necessary.
There are four main business structures you can choose from:
A sole proprietorship simply means that you own the company yourself. You can still hire workers, advertise, and bid for contracts like many other companies. However, you’ll be the sole owner and primary decision maker.
Another option to consider is a limited liability company. This is essentially a private company (typically with multiple owners who invest capital). The major benefit is that your extent of liability to repay debts will only be as much as the capital invested.
A public company is one that’s open to investment from the general public. Australians will be free to purchase shares in your company, which you can use to raise capital. However, the licencing process is more complex and this is rarely appropriate for smaller businesses.
You can also establish your business through a trust, where a designated trustee manages assets within the trust. You can direct those assets towards starting a building company.
It’s always wise to seek the advice of a business adviser when choosing your structure.
After deciding on the best structure for your business, the next step is to register your company. Visit the Business Registration Service website to register your company name and to apply for a Business Registration Number. Fill in the required forms and provide the legal names of you and your partners.
You will also need to apply for a tax file number. This number will be used to track tax payment and expenses for your business.
Once you’re officially registered with the Australian government, the next step is to obtain the required business licences. As a building company, you’ll need to apply for construction-related licences before you begin work.
The first licence necessary will be an individual contractor’s licence. This licence is necessary before carrying out any residential or commercial building work. If you’re setting up a limited or public company, you should also apply for a company contractor’s licence. This licence will allow you to establish contracts and subcontracts with other companies.
Another licence that may be required is a high-risk work licence (if you’ll be operating cranes, forklifts, and other heavy machinery). For more information on required licenses, visit the Business.gov website.
When applying for the relevant licences, you will also need to provide a detailed safety plan for your business. The Occupational Health and Safety (OHS) department will confirm the steps you’re taking to ensure workplace safety and to minimise hazards on the construction site.
To prepare your business for potential accidents, you’ll be required to obtain insurance coverage. Public liability insurance is necessary to protect the public from any damages that your business might cause.
You can also obtain workers’ compensation insurance to protect your workers from any injuries that occurred in the workplace.
After being licenced and insured, the next step is to employ workers. Make sure you follow legal hiring processes such as fair work requirements (minimum pay and safe working conditions), employee-benefits, and tax-withholdings (with the Australian Tax Office).
You should also establish specific positions and roles that your workers will be fulfilling within the company.
Once your core business operations are set, you’re now ready to obtain your first customers. Marketing a new building company can be tricky, but there are useful strategies that can produce meaningful results.
First off, it’s best to join an industrial organisation. These groups connect builders to customers and also help you network within the industry. You should also use online marketing techniques and social media to build your brand and attract new business.
As a new building company, the importance of construction software cannot be overstated. Estimating software like Cubit provides builders with a natural estimating platform, allowing you to plan for better projects, to save on costs, and to improve performance right away.
For more information on growing your new building business, visit our popular eCourse today.
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