Construction Business Management


Before You Start a Project

There's a lot of pressure to get a project started once the owner and contractor reach agreement in principle, but first be sure all the i's are dotted and t's crossed. Requirements vary from job to job, but here is a basic list of some contractor must-haves for small to medium-size projects. Most are obvious and general, but it is good to use a checklist. Of course you must customize your checklist to take into account the requirements of the project at hand.

Be sure you have:

  • All necessary permits, entitlements and approvals (including right-of-way, development, land disturbance, environmental, building, etc.)
  • Final contract documents executed by all parties
  • Confirmation that the owner's financing for payment to the contractor is in place
  • Contractor bonding, banking and other financial arrangements in place
  • Major supplier agreements in place
  • Long-lead-time materials and equipment arrangements complete
  • Satisfaction that environmental studies were performed and show no indication of contamination (usually arranged by the project owner but equally important to the contractor)
  • Registration with the local secretary of state
  • Professional contractor's license where required
  • Local business license
  • Subcontractor agreements in place
  • Formal Notice to Proceed from the owner if required
  • Insurance coverage including builder's risk, commercial general liability, worker's compensation, and other insurance required by the construction agreement and as otherwise prudent
  • Verification that the owner has in place all insurance he's required to provide, that your company is named as Additional Named Insured on his policies, and that all parties have waived subrogation rights
  • Copy of the policies of all other parties' insurance coverage that affects you
  • Your firm shown as Additional Named Insured on all subcontractor policies
  • Subcontracts signed and delivered
  • Insurance certificates from all subcontractors before they begin field work on the project
  • Location and flagging of underground utilities by the local Call Before You Dig center
  • Project boundaries clearly shown onsite

The author of this article, Nick Ganaway, was a successful general contractor for 25 years. He is a consultant in Atlanta, Georgia for contractors and other small business owners. Nick has described how to set up and manage a construction business that is profitable, enjoyable, and enduring in his book Construction Business Management: What Every Construction Contractor, Builder & Subcontractor Needs to Know.


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