Ongoing Expenses for Virginia Construction Businesses

The United States economy is highly dependent on the number of small businesses across the country. Millions of these companies start each year, and the number of jobs they provide is a crucial factor in the growth of the economy. Plus, these small businesses often provide key services that larger corporations sometimes overlook. 

Perhaps you have an entrepreneurial spirit and want to start a business in the state of Virginia. One type of business you can create that has a lot of potential is a construction brand. This industry consistently grows each year, providing a lot of space for new business owners to get in on the action if they are willing to work hard. 

Running a new business is not easy. First, you must overcome the startup costs, which can be hefty for construction businesses. Then you have to build a customer base to start generating revenue. Finally, you will have to cover all the ongoing expenses that occur again and again. Let’s talk about some of these ongoing expenses that your Virginia construction business will face. 

Equipment

Every construction brand has equipment needs. Whether you work as a plumber, a carpenter, an electrician, or a general manager, your company has to have the tools and machines needed to complete construction projects for your clients.

Not only will this be a startup cost, but it will also be ongoing. Heavy equipment may need to be replaced every few years if it breaks down or endures too much wear and tear. When you don’t own the tools needed for a specific project, you may need to rent them. Equipment costs can add up quickly, so factor them into your financial projections. 

Maintenance

For the tools and equipment you do own, they need to be taken care of. Since you spent the money to purchase them, you want the greatest return on your investment. If you ignore all repair and maintenance needs, then your equipment is not likely to last, forcing you to buy replacements sooner than you should. Investing in preventative maintenance is an ongoing task that construction brands must deal with, especially if they want their tools to last a long time. 

Insurance

Every business that has more than one employee should have an insurance policy. You must protect your employees, equipment, and business in the event of an incident that could cost a lot of money. This could be an equipment breakdown, a work site injury, or even a natural disaster that puts the business’s future at risk. Insurance is a monthly cost that your company will have to pay for, so remember to include it in your budget each year. The more your company grows, the larger the policy you will need to pay for. 

Marketing

You cannot earn money as a construction business if you don’t secure contracts to complete projects. To accomplish this, you need people to be aware of the company. Marketing is an important pillar for any business because you need to prioritize brand awareness, especially in the early years.

However, the need for advertising will never end, so you must be willing to invest in a smart marketing strategy. Whether you regularly create high-quality videos or employ an email marketing service, these costs add to your overhead. 

Continuing Education

To serve as a contractor in the state of Virginia, you must obtain and keep your license. Otherwise, you cannot bid on projects and take on clients. Even after the initial expenses of studying for the Virginia contractor license exam, you have to continually engage in educational opportunities to keep that license. This is an extra cost that will be necessary for you and any other contractors you employ. Though this expense is not very large, it is nonetheless something to keep in mind. 

Building Expenses

If your business operates out of an office or building, then there will be a lot of building expenses that are part of your budget. For example, perhaps you pay rent for a storage unit for your equipment. Maybe you bought a building to be a base of operations and you have to cover the mortgage, taxes, and utilities.

There may also be amenities or services you pay for that the landlord provides as part of the lease contract. These building expenses are necessary and must be considered when balancing revenue and business costs. 

As You Can See, Running a Construction Business is Expensive

Not everyone is built to be a successful entrepreneur, especially in the Virginia construction industry. Not only is the work difficult, but there are a ton of overhead costs that can make it challenging to turn a profit. Understanding what it takes to be a construction business owner is the first step to building a successful company, so if you have a good vision of the overhead costs, you will know what your revenue goals have to be.