How Much Money Do I Need to Start a Construction Company?
Manage episode 509096130 series 3385001
Starting a contracting company doesn't require a huge nest egg—smart cash flow management and the right systems are more important than having six figures in the bank.
• Commercial contracting requires significant cash reserves due to 30-60 day payment terms
• Residential contracting has more flexible cash requirements, especially with weekly invoicing
• Basic startup costs include licensing ($200-500), insurance ($1,500-3,000/year), and minimal marketing
• Weekly invoicing strategy: bill for next week's work to maintain positive cash flow
• This approach creates natural client checkpoints and prevents end-of-project issues
• Capture all non-billable hours in your pricing (estimates, material runs, bookkeeping)
• Avoid unnecessary startup expenses like new trucks, office space, or expensive software
• Focus on essentials first: QuickBooks, Google Workspace, and basic marketing materials
• Set up proper systems from day one rather than trying to fix problems later
• If you're young with few responsibilities, now is the time to take the entrepreneurial leap
Ready to get started? Visit prostruct360.com or contractorcuts.com and contact us for help setting up your systems correctly from the beginning.
Join us January 11–13 in Nashville for the Chart the Course 2026 Planning Retreat. Sign up now and get three free coaching sessions before the event to finish 2025 strong and hit 2026 with a clear game plan. At the retreat, you’ll tackle systems, hiring, marketing, and leadership alongside ambitious contractors, leaving with a blueprint for growth. Spots are limited—visit prostruct360.com to learn more!
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Chapters
1. Introduction to Cash Requirements (00:00:00)
2. Commercial vs Residential Cash Needs (00:02:12)
3. Weekly Invoicing Strategy (00:10:52)
4. Start-up Costs Breakdown (00:19:11)
5. Capturing Non-Billable Hours (00:24:11)
6. What Not to Spend Money On (00:31:32)
159 episodes