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How Much Does It Cost to Start a Scaffolding Business? (Sales Forecast and Breakeven Analysis Included)

If you are planning to start a scaffolding business, you should plan to spend at least $200,000. Anyone who wants to start a standard scaffolding business with several sizes of scaffoldings must be ready to spend over $500,000 to get the business up and running.

This is so because scaffolding businesses provide equipment and services essential for construction projects.  They supply temporary structures, known as scaffolds, to support workers and materials at heights during building, maintenance, or renovation work.

Estimated Cost Breakdown for Opening a Scaffolding Business

  1. Purchase of Scaffolding (tubes, boards, couplers, etc.): $100,000
  2. Safety Equipment (harnesses, helmets, etc.): $10,000
  3. Trucks for Transporting Equipment (2 used trucks): $40,000
  4. Lease Deposit and Initial Rent for Storage Yard and Office: $10,000
  5. Office Furniture and Equipment: $5,000
  6. Business Licenses and Permits: $2,000
  7. Liability Insurance: $5,000
  8. Vehicle Insurance: $3,000
  9. Initial Advertising Campaign (online, local ads, flyers): $5,000
  10. Website Development and Maintenance: $3,000
  11. Initial Payroll (first month’s salaries for staff): $10,000
  12. Employee Training and Certification: $5,000
  13. Legal and Accounting Services: $3,000
  14. Miscellaneous Administrative Costs: $2,000
  15. Contingency Fund (unexpected expenses): $2,000

Total Estimated Cost – $200,000

3-Year Sales Forecast and Breakeven Analysis

  • Main Revenue Source: Renting out scaffolding equipment to construction firms, renovation contractors, and other commercial users.
  • Additional Revenue: Offering services like scaffold setup, dismantling, and transportation.

Assume an average rental price of $1,000 per scaffolding setup per month.

  • Starting Capacity: Enough scaffolding for 20 setups.
  • Monthly Rentals: Assume 15 setups rented out monthly in the first year, growing as market presence and reputation increase.

Growth Rate: Expect a 15% increase in the number of rentals annually due to increased demand and marketing efforts.

  • Fixed Cost (storage, office rent, insurance, salaries): $80,000 annually.
  • Variable Cost (maintenance, fuel, transportation, and setup services): 30% of revenue.

Year 1:

  • Revenue: 15 setups × $1,000 per setup × 12 months = $180,000
  • Variable Cost: 30% of $180,000 = $54,000
  • Total Cost: $54,000 (variable) + $80,000 (fixed) = $134,000
  • Profit: $180,000 – $134,000 = $46,000

Year 2:

Increased capacity to 17 setups (15 setups + 15% growth):

  • Revenue: 17 setups × $1,000 per setup × 12 months = $204,000
  • Variable Cost: 30% of $204,000 = $61,200
  • Total Cost: $61,200 (variable) + $80,000 (fixed) = $141,200
  • Profit: $204,000 – $141,200 = $62,800

Year 3:

Increased capacity to 20 setups (approximately):

  • Revenue: 20 setups × $1,000 per setup × 12 months = $240,000
  • Variable Cost: 30% of $240,000 = $72,000
  • Total Cost: $72,000 (variable) + $80,000 (fixed) = $152,000
  • Profit: $240,000 – $152,000 = $88,000

Break-Even Point

Contribution Margin per Dollar of Revenue = 1 – Variable Cost Ratio

: 1 – 0.30 = 0.70 (70%).

Fixed Cost: $80,000 annually.

Break-Even Revenue = Fixed Cost ÷ Contribution Margin

: 80,000 ÷ 0.70

Break-Even Revenue = $114,286

The break-even revenue for the scaffolding business is approximately $114,286 per year. Given that the forecasted revenue for the first year is $180,000, the business is expected to be profitable from the outset. This model assumes consistent demand and effective cost management to maintain profitability as the business scales.

Factors That Determine the Cost of Opening a Scaffolding Business

  1. The Number and Sizes of Scaffoldings You Want to Start the Business With

For example, if you intend to start your scaffolding business with less than a handful of scaffolding, you can spend about $100,000 or more because the average cost of low-level scaffolds can be between $500-$1,000 depending on options and accessories. Accessories: Wheel kits (must be lockable): $35-$55 and planks (must have handrails): $300-$800.

  1. The Size of Your Storage Facility

You are not supposed to store your scaffoldings indiscriminately on the street or main road. By law, before you can get approval to start a scaffolding business, you should be able to at least secure a storage facility for your scaffoldings.

The cost of leasing a secured storage facility in a centralized area that is large enough for over 10 dozen scaffoldings is going to form a significant portion of your budget.

For example, it will cost you between $2,000 to $10,000 per acre per year to lease a secured storage facility in a suburban area, and between $10,000 to $100,000 or more per acre per year to lease a storage facility in a prime commercial area.

  1. The Cost of Registering the Business, and Obtaining the Necessary Licenses, and Permits

The fact that you cannot start a scaffolding business without first registering the business means that you would need to budget for business registration, and also pay for the needed licenses and permits.

Before you can start a scaffolding business, you should have in place the following licenses and permits: a general business license, which allows you to operate legally within your jurisdiction; a contractor’s license, if required by your state or local government for construction-related services; liability insurance to protect against potential accidents or damages; and permits for erecting scaffolding structures, ensuring compliance with safety regulations and building codes.

  1. The Cost of Hiring and Training Your Employees

The fact that you cannot solely operate a scaffolding business means that you should make provisions in your budget for hiring and training your employees.

If you want to start a scaffolding business, you should make plans for competent people to occupy the role of scaffold erectors, safety inspectors, and project managers.

  1. Your Budget for Marketing and Branding

If you are planning to start a scaffolding business, then you must create a robust budget for marketing and branding that covers your website, the designing of a logo, printing your business cards, and other promotional materials.

  1. Your Operational Cost, and Contingency

You cannot operate a scaffolding business without having a budget for operation and contingency. Under your operational cost and contingency, you should be able to budget for:

Fueling your trucks and utility vehicles, servicing and maintenance, toll fees, parking fees, towing fees, emergency scaffolding, vehicle repairs, unforeseen maintenance costs, unplanned vehicle downtime, legal fees (if facing any legal issues), accidents and collision repairs, and medical expenses (if injuries occur), et al.