Expert: Roger Zona - 5/20/2011

Question
hello;
please i need your advice on issues surrounding setting up a construction company my uncle who is an experienced civil engineer is thinking of setting up a construction company together he asked me to get an information about how many Tower crane,Bobcats, concrete mixers, scaffolds, pick ups, woods, forms etc(& how much every one cost).. ,the key personnel, the carpenters, electricians, concrete labors, plumbers, drivers and others. how many of them do we need in this company ). construction company can begin a projects with 3 million $ at the same time (build 3 towers    at the same time each towers cost 1 million)

please if you can answer me fast today or tomorrow because i need this information
THANKS..

MIDO.

Answer
Hello Mido,

You are in an envious position - sounds like you have the funding necessary to create a start-up company - even in this poor economy.

First of all - don't be concerned about all the machinery and equipment.  It can all be leased - long term or short term. This includes scaffolding, forms, etc.  A crane is best left to a crane subcontractor who has experienced operators and is well insured.  Owning a machine can get very expensive if it isn't operating everyday and earning money.

As for the subcontractors - get on the internet and enroll or subscribe to the Construction Blue Book for your area.  I get an annual copy for S.E. Florida and use it often to locate a contractor or supplier.

Also you probably have a contractors association in your city or the nearest big city.  They can be a wealth of sources for subcontracting.  Also contact the various labor contractors.  I use them for most jobs - whenever I need day labors, carpenters, etc.  The labor contractor pays all taxes and insurance.  You need an experienced supervisor.  Advertise and ask for resumes and references.  Check their previous employers and background.  Become a drug-free contractor.  What about your licenses and certificate of competency?  If your uncle is going to qualify the company be sure you process the paperwork for license.  Also you will need to establish a business name and address.  Then of course you need to install accounting software or hire an accountant.

It's not that easy and there are many pitfalls you must look for.  Certificates of insurance from your subs, your own general liability and workman's comp, etc.  Establish a line of credit with your suppliers.  Arrange your banking and have enough capital to sustain your projects until a payment is made.

I apologize for this brief answer but the process can be a tiresome ordeal because there are so many considerations that must be taken into account.  I have been contracting for nearly 50 years and still am learning.  If I can be of further help you can contact me directly by email at askthecontractor@live.com

I hope this has been helpful.

Roger
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