The Bureau of Labor Statistics estimated that over 41,000 paving equipment operators were working in 2022 in the US. Paving contractors are responsible for installing parking lots, repairing driveways, and fixing America’s roadways. Suppose you are interested in how to start a paving business. In that case, this article will explain the steps, like hiring employees and getting insurance coverage. Keep reading to find out more.
Paving and surfacing operators have a median average hourly wage of $22. They have a median annual wage of $47,000. In the 90th percentile, paving operators make $39 an hour and $82,040 annually.
It may seem daunting to start a paving business initially. However, it becomes more manageable once you break the requirements into steps. See the list below for the steps that are part of how to start a paving company.
Decide on a business plan
Calculate business costs
Do market research
Determine what services to offer
Find Suppliers
Invest in equipment
File to form an LLC or Corporation
Open a business bank account.
Get the necessary licenses and permits
Hire employees
Build relationships
Maintain a website
Get the necessary insurance policies
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A solid business plan is the first step in discovering how to start an asphalt business. Your business plan is the strategy that outlines what you need to succeed. You will need to research what your ideal customer is and what competition exists in your area. Use strategic planning to understand the scope of your business and try to narrow your ideas down to the ones with the highest chance of success.
As part of your action plan, you need to establish what you will be focused on over the longevity of your business. You need to find a way to secure funding for your business and set reasonable goals to indicate if your business succeeds.
Ultimately the success of your business will lie in how profitable you can be versus your business costs. The next step in learning how to start an asphalt paving business is to get your business's finances on track. Below are some estimated costs to start your paving business.
| Incorporation fees | $100-$500 or more |
|---|---|
| Market research | $1,500-$8000 |
| Equipment | $14,000 |
| Office Space | $1,000-$5,000 a month |
| Website | $0-$10,000 |
| Insurance | $360-$4,000 annually |
Market research is essential to master when learning how to start an asphalt company. You want to consider the demographic of customers you are trying to attract. Gather information about what pricing these customers are receptive to, their demand for your services, and how competitive the market is.
You can use market research to fine-tune your business plan. Your market research will examine your ideal customer's behavior and make observations. Market research methods employ surveys, questionnaires, interviews, and focus groups to get the necessary feedback you need to make solid business decisions.
Your paving business can offer different services to your customers. Since you are starting out, you want to focus on a few. These services can include:
Paving patios
Concrete pavers with artificial turf
Paving pool decks
Paving driveways
Paving home entryways
Repair services
Cleaning services
Sealing services
You must find suppliers once you have narrowed down the services you want to sell to customers. This will require researching what local businesses sell the materials you need for your operations. You can rely on your business network for recommendations on suppliers. Look into your supplier's background and quality to know if they would make an excellent long-term business partner.
Your paving business will need specific equipment to perform services for clients. Some vehicles that you may use in your business are outlined below.
| Vehicle | Description | Cost |
|---|---|---|
| Sweeper | This cleans a road's surface after being milled from excessive dust and debris. This debris may prevent asphalt from bonding properly during the paving process. The debris can also come in the form of small rocks, which can fly up and hit the windshields of unsuspecting drivers. | $20,000 |
| Asphalt paver | A machine that delivers hot mix asphalt to a surface spread by a set of drills. This asphalt is leveled and compacted by a screed. The screed will also control the amount of material released and ensure the asphalt is properly flattened. | $30,000-$60,000 |
| Compactor | This machine applies weight to an asphalt surface and compresses the material under the contact area. This weight needs to be applied slowly to produce more compaction. | $10,000 |
| Dump truck | This vehicle moves hot asphalt from the manufacturing plant to where your project is. | $20,000 |
| Milling machine | A milling machine removes the surface layer of a road or pavement. It creates a grooved surface. This groove surface has a wider surface area, which helps with paving. | $30,000 |
You must decide the structure of your business. We recommend you choose either an LLC or corporation for a paving business. Below are some advantages and disadvantages of each.
| Business Structure | Description | Advantages | Disadvantages |
|---|---|---|---|
| Limited Liability Company (LLC) | A business that offers pass-through taxation and personal liability protection. | Avoids double taxationFewer regulationsBetter flexibility in management structure | Owners have to pay self-employment taxCan’t issue stocksFewer investor sources |
| Corporation | A business composed of shareholders, directors, and officers | Great for investorsStrong protection for personal liabilityThe life of a corporation extends beyond its owners | Stricter rules to followDouble taxation because of corporate income taxRigid management structureMore complicated |
A business bank account keeps your business finances separate. You can apply for loans with a business bank account to help grow your business. Business bank accounts make filing at tax time easier since your expenses will be more organized. The IRS requires a business bank account if you have an incorporated business.
Most business bank accounts have some fees you need to handle. Checking accounts have maintenance fees you must pay, though some banks waive these fees if you meet a minimum balance requirement.
A bank will charge you fees on transactions if you exceed the maximum number of transactions per month. You may not need to worry about a transaction limit if you have a small business without many transactions. The terms of your business bank account may charge you a fee if you cancel your account before the contract period ends.
Business bank accounts also make your brand more professional. Customers can make checks out to a business name rather than your name. This makes transactions feel routine and standardized.
Your paving equipment operators will need a commercial driver’s license to haul equipment and operate certain types of machinery. If they are properly built, basic paving in customer driveways will often not need a permit. However, cities often require special permits for resurfacing, restriping, or resealing parking lots.
Your paving business may need to submit paving plans to the city for review before you can install a parking lot for a customer. These permit restrictions protect the city from overdevelopment but can hinder your business operations.
Your employees will represent your business to customers while they carry out your paving services. It can be tough to find talented employees without a good recruiting strategy. You must create a good job ad that looks professional and sells potential recruits on the perks and benefits of working for you.
You can offer apprenticeships as part of your business so you have direct control over the training your employees will get. You can also partner with schools and other companies to access a pool of fresh potential employees. Reach out to suppliers to get referrals for potential employees. Make posts on specialized job boards to find candidates who can offer your team stability, relevant project experience, and flexibility.
Paving business employees must have a commercial driver's license to be vehicle operators and be at least 18 years of age. The most common degree held by pavers is a high school diploma. You will want to seek candidates that can meet these qualifications.
Business success is often about who you know. You want to build relationships with suppliers and local businesses in your area so you have a network of contacts to draw from. You can use these contacts to find employees to hire and spread your brand through your local community.
Networking can open doors to opportunities you might not predict. Identifying opportunities with your contacts can help generate leads and get updated about changes in your industry. You want to be informed about paving techniques and technologies as things happen. Having a good contact network also lets you keep a competitive advantage in your industry. Your network may have access to information and resources that a competitor might not have.
A business website is practically a requirement for your business in the digital age. Your website is a place customers can access 24/7 that provides answers to their questions, pricing for services, and helpful information to help them make a purchasing decision.
To create a website, you must pay for a domain name and find a web design service. You can use a template to design your website to Include customer reviews and testimonials to engage your community and assure potential customers that your services can be trusted.
You can leverage the customer expectation of a website to help promote your brand and establish credibility with your customers. An optimized website can help your business name rank highly on search engines and allow customers to find you organically.
Keep your website updated and ensure it can be accessed with a mobile device. Many people will use their phones to search the internet for services, and you want your business to look attractive to people no matter what device they use.
Get all the best quotes from leading providers in a click of a button!
Your paving business can only be successful with adequate insurance protection. The following insurance policies protect various aspects of your business from financial loss and lawsuits.
General liability insurance protects you from various third-party lawsuits. The policy protects from bodily injury, property damage, and personal injury claims. You can use this insurance to protect you from the losses of damage to a client’s house when paving their driveway.
Thimble offers short-term general liability coverage that you can set to cover the length of a paving project. Their insurance policies are scalable to the needs of your business. You can manage your policies through their excellent app and get quotes within seconds. Thimble has an A+ from the Better Business Bureau.
Your professional liability policy protects you from lawsuits relating to business mistakes. This policy protects you from negligence, errors, copyright infringement, personal injury, etc. It can protect you from legal costs for not fulfilling contracts with customers.
Hiscox is our recommended choice for professional liability insurance. You get flexible payment options with no additional fees. The company immediately assigned a dedicated claims representative to help you when a claim is reported. Hiscox has an A+ rating from AM Best.
You can protect your equipment and business building with a commercial property insurance policy. This policy covers several physically damaging events that include:
Fire
Theft
Vandalism
Burst pipes
Water
Wind
For commercial property insurance, we recommend CoverWallet. They offer an easy-to-use digital insurance platform with over ten highly-rated insurance providers. CoverWallet lets you skip the insurance form and call a representative directly if you are in a hurry. They offer an excellent selection of insurance coverage and have an A+ from the Better Business Bureau.
A commercial auto policy protects you from vehicle accident lawsuits and damage to your business vehicles. You can use this policy to safeguard vehicles you use to transport equipment and meet with clients.
Tivly offers an excellent selection of commercial auto policies. Their platform has over 200 insurance partners to select from. You can get policy add-ons like gap insurance, rental reimbursement coverage, and more. Tivly has a 4-second phone answer rate for their customers. The Better Business Bureau gave them an A rating.
If you hire employees to help you with your paving business, you will most likely need workers' compensation insurance. This policy is required in most states for businesses that meet a specific employee threshold. The policy pays disability benefits to injured employees and helps them with medical costs.
The Hartford is our choice for workers' compensation insurance. With their policy, your employees can access 65,000 pharmacies and benefit from The Hartford’s 200 years of insurance experience. The company has a mobile app for your convenience. They are a reliable company with a 100% rating from the Corporate Equality Index. The Hartford boasts an A- rating from AM Best.
A business owner’s policy is the most comprehensive form of insurance you will commonly buy. This policy combines the protection of several policies like general liability and commercial property insurance.
NEXT offers an excellent selection of options for a business owner’s policy. You can get quotes entirely online that address the needs of your business. NEXT has a 4.7/5 rating from their customer reviews and allows you instant access to your insurance certificate. The company has an A- with AM Best and a B+ from the Better Business Bureau.
1 / 5
Use anyone except Employers. Period. They are non-transparent and shameful. After I complained long enough to warrant a call from a supervisor, the supervisor called back from a PRIVATE NUMBER (no caller ID), left a message that they are not reversing their decision (without any communication with me), and failed to leave a phone number for me to call back. She was hiding! They also fact find via email and phone calls, which is terrific for speed and communication. However, after setting a precedence of email or phone calls, they send time sensitive information via email, without any heads up... they are hoping you miss it and forfeit via expiration. Evil policies. Go elsewhere.
1 / 5
This place is an absolute joke of a company and should be ashamed of the way they conduct business. I was hurt on the job at the end of July and it took them just shy of 7 weeks to issue out a paycheck to me. Yes the amount was back dated but still. Not many have the luxury of not receiving a paycheck for almost 2 months. To top it all off, the original adjuster marked me down for the wrong state which caused a problem from the get go, I've had 3 different adjusters now since each one can't seem to figure out the simplicity of my claim. All my paperwork which includes, my job, house, and drs visits all are from the same state and city but yet some how I have been filed under a completely different state 1500 miles away. They do not answer your phone calls or emails no matter how many you leave. I've had to escalate my frustrations to the supervisors of each of these individuals in order to even get some kind of response. I've had more communication and information given to me about my claim from the customer service representatives then the actual adjusters.......... please tell me how that works?! A serious overhaul needs to happen here in order to serve your clients the way they deserve to be taken care of. 10/10 do not recommend this company to a single soul on earth
1 / 5
I have never had the displeasure of working with a more incompetent and disrespectful person in my life. I’m an injured worker and the adjuster that was assigned to my case was named Carrie Furgeson. In the past 6 weeks that I’ve been injured and out of work I have only been able to get ahold of her twice, not for lack of trying. I have left countless voicemails, countless emails, and she ignores them all. When I am finally able to get ahold of her I’m greeted with terrible customer service. She is rude, she talks over me and I’m hardly able to get a word in edgewise. She spelled my name wrong on my documents even after I spelled it for her properly countless times, this caused a whole new issue with my bank. I have bill collectors from the hospital calling me demanding payment and Carrie Furgeson won’t do a single thing to help, or to get them paid. All of my documentation is in Colorado, my job is in Colorado, my address is in Colorado, all my Dr offices and appointments have been in Colorado and Carrie still managed to hold my claim because she wasn’t sure what state she needed to file it under. It’s been 6 weeks since my Injury and my company still hasn’t received the wage paperwork to fill out so they can get me my correct wages. When she’s not ignoring me she’s answering my questions with “I don’t know” well I don’t know how she got this job, because apparently she doesn’t know anything about it. She is a disgusting morose individual inside and out and I genuinely wish her the worst in all of her future endeavors. I highly recommend you don’t use this company. Please if you are a business owner and your looking into this company please don’t use them. I’m sure they have the cheapest payment and that’s why companies use them in the first place, but you will be doing your employees a grave disservice by forcing them to venture into this absolute dumpster fire of a company. I would rate 0/5 if possible but 1 was the lowest I was allowed.
5 / 5
Their general liability insurance purchase process is simply the best online experience I've ever had in my life!
5 / 5
As long as they cover your line of business, you're literally covered! best rates, best coverage, best online experience, best professionals, can't be happier that I chose them!
Not all those who wander are lost.
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