Many great businesses today started from humble beginnings, with some owners achieving such feats with no money.
If you’re into construction and looking to establish your own business, you might find this guide on how to start a construction company with no money attractive.
Doubtful as it might sound, it’s something anyone with a strong drive for success can achieve.
How to Start a Construction Business With No Money
Starting a construction company with no money set aside isn’t for the faint of heart. In this guide, we begin by setting the records straight. Is it possible? You may want to take the franchise route.
Other ways to achieve this objective without money include sourcing soft loans, government grants, and seed money. Also, consider selling shares and applying for a bank loan.
Setting the Records Straight
The importance of financing in starting any enterprise of note can’t be overruled at all. In this case, setting up a significant business operation like a construction company requires sufficient startup capital.
However, this might sound conflicting when compared to the topic being discussed. So, is it even possible to establish such an operation without money? Read on for answers.
While the importance of capital cannot be diminished in any way, this guide only shows ways to raise external funding, especially for people with no money set aside for a major undertaking like a construction company.
You can use other people’s money, not necessarily your own, to achieve set objectives. That said, let’s proceed with the main discussion.
Is it Possible to Start a Construction Company With No Money?
How possible is it to start a construction company with no money?
Has it been done before? Can it be done now? While this is a valid question, it’s important to note that the answers will depend on multiple variables.
There are successful construction companies that were started with money or capital sourced externally.
In other words, the owner(s) didn’t have much money aside but utilized other means to access critical funding. We mean this when discussing ways to start a company with no money.
In a nutshell, the answer is yes! Starting a construction company with no money of your own is possible.
However, you must understand that this isn’t a walk in the park, as the right actions need to be taken in sourcing funds.
The Franchising Route
Ever considered franchising as an alternative to establishing a construction company with no capital? The franchising business model has many advantages.
However, unlike traditional businesses started from scratch, a franchise allows you to become its partner by owning part of its operations.
The advantages are numerous, including using its proven construction business model.
While true, a franchise fee and other investments are needed to join a construction franchise. So, how can you own a construction franchise without money?
You only need to consider financing construction opportunities made available by some franchises. Some of these include in-house financing offered by the franchisor itself.
There are also financing provisions made possible by arrangements or agreements between the franchisor and third-party funding sources.
Irrespective of the type of financing, these cover critical aspects of the business, such as the initial franchise fee, equipment costs, training, and a range of others as deemed necessary by the agreement.
Of course, franchisees must meet set requirements to access such financing provisions.
Having explained the franchising route to starting a construction company with no money, it’s also necessary to identify some notable examples of construction franchises to join.
These include Insulation Commandos, Mighty Dog Roofing, and Garage Living.
Sourcing for Soft Loans
Sourcing soft loans is another way to start a construction company without money. Unlike traditional or commercially available loans, these typically come with more generous repayment terms.
Also known as concessional or soft financing, these loans have more extended repayment periods, may come with interest holidays, and have zero interest rates.
It’s evident from the information provided that soft loans place less burden on you while enabling you to achieve your key objective.
Soft loan sources include microloans, Small Business Administration (SBA) loans from family and friends, peer-to-peer lending, and grant funding. You may also have access to soft loans through equipment financing.
Any of these could help in establishing your construction company. It’s also important to note that the loan amount here may not be much, depending on the scale or scope of your business idea.
Some soft loan programs may offer amounts ranging from $5,000 to as much as $100,000. You’ll have to research to figure out funding amounts before applying.
Government Grants and Seed Money
You can also start a construction company without money by leveraging opportunities such as government grants or seed money. There are lots of these you may qualify for.
Some examples include Women Business Centers (WBCs), State Small Business Grants, the Angel Capital Accelerator Program, the Startup America Partnership, and local small business grants.
Other government grants or seed money to consider applying to for funding your construction company idea include the Shuttered Venue Operators Grant (SVOG), the Minority Business Development Agency (MBDA), and the State Trade Expansion Program.
These are just a few government grants and seed money programs that can offer critical funding for your business idea.
You must understand that each of these programs has its unique requirements. One that’s common to all is your business plan.
You must carefully draft a coherent or comprehensive construction business plan for your company. This document allows investors to determine the viability of the business.
Selling Shares
Another helpful tip for establishing a thriving construction company without money is selling some of your shares. Some investors would want some control over what goes on.
This is especially true when the business idea is appealing. Selling shares to raise startup capital has been in practice for ages.
However, you’ll need to have a detailed valuation of your business to know how much a share is worth and the number of shares you need to sell to raise capital and maintain the majority shareholding.
This requires in-depth business understanding.
These are helpful tips for starting a construction company with no money. We must also say that successful companies have been established this way, which can be your story.