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.
1. Determine Your Business Structure
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 licensing and insurance requirements will be necessary.
There are four main business structures you can choose from:
1. Sole proprietorship
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. 2. Limited liability company
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.
3. Publicly held company
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 licensing 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.
2. Register Your Company
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.
3. The Licencing Process
Once you’re officially registered with the Australian government, the next step is to obtain the required business licenses. As a building company, you’ll need to apply for construction-related licenses before you begin work.
The first license necessary will be an individual contractor’s license. This license 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 license. This license will allow you to establish contracts and subcontracts with other companies.
Another license that may be required is a high-risk work license (if you’ll be operating cranes, forklifts, and other heavy machinery). For more information on the required licenses, visit the Business.gov website.
4. Safety Requirements
When applying for the relevant licenses, 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 minimize hazards on the construction site.
5. Insurance Regulations
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 licensed 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 fulfilled within the company.
6. Marketing Tips
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 organization. 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.
7. Use Estimating Software
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.