How to Start a Small Concrete Business

Target Market

You will need to decide what type of market you want to work with. For example, you could sell to homeowners. Another option is to become a concrete subcontractor for general contractors doing larger jobs.

LLC or S Corporation?

You will need to choose your business model. A sole proprietorship may sound appealing at first. It is easy to set up and requires little paperwork or fees. Typically, you just start working and pick up any income or losses on your personal taxes. However, liability can be an issue. If someone gets injured on the job, they can not only go after your business assets, but also your personal assets.

Therefore, contractors pick a business model that protects them. Normally, contractors choose a Limited Liability Company (LLC) or an S Corporation.

An LLC shields you against any personal liability for your business. Only your business assets would be vulnerable, not your personal assets. LLCs also allow the ability to have an unlimited number of owners if you do not want to be the only decision-maker.

Corporations also protect owners from being personally held liable for businesses. There are C Corps and S Corps. C Corps are more for larger companies with unlimited shareholders and their profits are subject to double taxation. S corps are great for businesses who have several years of experience, a larger number of shareholders than a startup, and do not have to deal with double taxation.

An LLC could be the best option because it is easier to set up than a corporation and it still provides the separation necessary to protect your personal assets. S Corp is more suitable for someone who is experienced and wants to expand their business to the fullest potential.

Acquire the Proper Licenses and Insurance

Before beginning operations, you need to acquire the correct business license from the local city, county, or state. In general, a new business needs the following types of insurance:

• General liability insurance
• Property insurance
• Commercial auto insurance
• Worker’s compensation

Pricing Strategy

Determine how you will price your services.

• Hourly basis
• Fixed price per job

Also, estimate the direct costs of each job:

• Materials
• Supplies
• Equipment rentals
• Hired labor wages

Buy the Required Equipment

A rugged truck or van is key to a concrete business. You have to transport the equipment, supplies, materials, and protective gear necessary for each job.

Supply Source for Materials

If it is a small job, purchasing bags of cement that are already mixed with sand and gravel will suffice. Larger jobs may require purchasing ready-mix concrete that gets delivered to the job site may be necessary.

Raise Capital

The start-up costs of the business include the purchase of equipment and supplies and enough money to pay for the overhead of the company until a positive cash flow is developed.

Sources of Funds

• Savings
• Loans
• Business credit cards
• Outside investors

Create a Marketing Plan

• Construct a website
• Place classified ads in the local newspaper
• Submit a press release announcing your new business
• Print flyers and post them in the community
• Create a contact network of local businesses and contractors and ask them for referrals