One Man Construction Company: Pros & Cons of Going Solo

Should you do all the work yourself or hire help?

By
George Leon | Updated September 26, 2022

Are you looking to start a construction company with yourself as the sole employee? To help you get started, we’ve listed the benefits and drawbacks of starting your own construction business without hiring help.

Understanding the pros and cons associated with owning a construction company will help you navigate the journey better.

There are many advantages to owning a construction business as a sole proprietor

Entrepreneurs can manage a profitable construction business independently. It can be great to be your own boss and not have to rely on a team.

A one-Man construction contractor is a sole proprietor who manages all aspects of his construction business.

All business operations are under your supervision, which allows you to see all areas of the company. These are four of the benefits that one-man construction businesses will offer:

  • Higher Profit Margin: When it comes to the running of a business, profitability matters. A steady cash flow is essential to the operation of your business. However, the bigger your team is, the more overhead will consume your revenue. If you’re an independent contractor in construction work, your profits won’t be used to pay wages.
  • Competitive Prices –  You may be searching for ways to distinguish yourself from others. As your business grows, you will incur more overhead costs. You might have to increase your prices in order to maintain your profit margins. You can set your prices more competitively if your team is just you. This will make you the top choice for construction services in your market.
  • Management – Managing a team is hard. The job of managing a team involves a lot more than just ensuring that their work meets or exceeds expectations. It also requires monitoring that they arrive on time. The more people in your team, the more complicated it can become. It also takes up valuable time which could be spent bringing you new customers. You’ll spend more time in the field working with your team than you do in an office.
  • Business Health – It’s easy to lose sight of the business operations when your team grows. However, you, as an owner, must be aware of how your company is doing. If you are the sole employee of your construction business, you will be familiar with every aspect of the company. This will allow you to make good decisions.

Key Takeaway: Starting a solo construction company can be very rewarding. When you’re the sole employee, you’ll have a lot of hands-on experience with the day-to-day operations.

One-man construction contractor: the downside

Let’s now discuss the disadvantages so that you can make better business decisions knowing both sides.

The greatest problem with a small construction business is its impact on your business growth.

What do you see for your construction business in five years’ time? Ten years from now? What will it take to make your company a success in ten years?

Although it is a good thing to be the only employee on your team, it can also hinder your ability to grow your business.

Your marketing efforts and outreach to the community will help you start to get leads. There might be more leads that you can handle on your terms after a while.

Customers who are unable to wait will be less likely to book appointments with you weeks in advance. If they have a time sensitive job, they will call a contractor who can accommodate them.

If you don’t want to lose out on opportunities due to a lack of manpower, think about subcontractors or employees. If your construction business is getting a steady flow of leads that are beyond your ability to handle, hiring can keep your sales growing.

Although this may reduce your profit margins slightly, you’ll be able to handle twice the number of jobs.

Should you hire employees?

Once you reach the point where more leads are coming in than you can physically manage, it is time for you to decide if you want your team to expand. There are many different ways to add to your team.

Before making the best decision for your business, it is important to know the differences between subcontractors and employees. There are legal responsibilities that you will have to fulfill if your goal is to hire permanent employees.

Employers would be responsible for:

  • Hiring a competent, skilled team who you can trust to complete the tasks you assign.
  • Your employees should be provided with all necessary supplies and materials to complete their job.
  • Offer your employees health benefits, sick leave, and family leave, if applicable
  • Your employees should be paid a salary, regardless of how much work they do.
  • Processing payroll and dealing in taxes for employees

It can be great to work with the same people on all your projects. However, hiring employees can prove costly when you start as a contractor.

This is why many owners of construction businesses choose to either hire subcontractors or do the work themselves. Which we will discuss next.

Is it a good idea to hire construction subcontractors

Sometimes, you might need additional hands, but you don’t want to have to hire your own team.

A subcontractor can be hired to do a few jobs in a busy period. This gives you the flexibility you need, without the commitment of hiring an employee.

Because subcontractors will work for multiple companies, you won’t be responsible for their equipment, health benefits, and paid time off.

They can be a good choice if you notice an increase in leads during a season but not for the entire year.

You must remember, however, that your business reputation is at risk every time you or an employee enters a customer’s home.

The Verdict: It’s possible to run a single-person construction company

Yes, it is possible to run a successful one-man construction business. But it is crucial to ensure that your growth goals are met.

Although this arrangement may be effective in the initial stages of your business, it is not ideal as you grow in market authority and reputation. You might need more staff to keep up with the demands of leads.

You should weigh the pros and the cons of being the sole employee to decide if this is the right plan.

Written by George Leon

George Leon

George Leon is a Managing Partner at Scalebloom (Parent company of BusinessHue). He used to be a partner at a painting company in Charlotte NC. George loves to help business owners scale their business with modern marketing strategies and branding.