How to start a construction business from scratch: a plan, step-by-step instructions and recommendations

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The main advantage of the construction business is the constant growing demand. Every day, several potential clients are looking for contractors who can do renovations, build a cozy home, or install a fence around an existing structure. Of course, there are many representatives of the stronger sex who will take up the job themselves, but not every man can install a double-glazed window, replace a pipe or build a cabinet.

About how to start a construction business and what pitfalls can lie in wait for a businessman in this field, and there will be further discussion. The main rule that every entrepreneur must remember is that you cannot refuse any client who is ready to pay money.

Market Monitoring

So, the idea came to my mind to try myself in such an area as the construction business. Where to begin? Many will say that by contacting the tax office. Not! With serious preparatory work related to detailed market research.

Currently, many companies are open, ready to build both an apartment building and a private cottage.

Each novice entrepreneur should understand that organizations that have worked on the market for more than one year can act as competitors. This means that they have the trust of customers and partner suppliers. Therefore, the only right decision is to stand out “from the crowd”. Leadership should be expressed either in the volume of attracted capital, or in a fundamentally new approach to construction.

Activity Registration

How to start a construction business? A thorough market analysis should be followed by formal registration. The most suitable form is a limited liability company.

After that, you can start choosing a suitable company name, finding the best office location, creating an authorized capital and selecting founders. More about each item.

How to start a construction business from scratch: a plan

1. From a unique and easily recognizable name.
2. From the location of the company's office in a place accessible to customers.
3. From the authorized capital invested by the founders or from start-up capital, without which the company will not be able to start its stable functioning.
4. From the collection of a package of documents necessary for registering a company - the passport of each founder, information about the location, the main type of activity, as well as the size of the chartercapital and the method of its formation.

You can do all of these steps yourself or ask the appropriate experts for help.

Professionalism and organizational skills. What's more important?

How to start a construction business from scratch and achieve success? Experience is an invaluable assistant in this matter. In this case, some problems disappear on their own. Although, according to statistics, there are a lot of people who started to realize themselves in this area from scratch and still climbed very high up the business ladder.

Organizational skills, the ability to create a professional team, to find a common language with any partner or client are the main components of success.

In addition, it is necessary to determine how the work will be carried out - independently or with the involvement of additional companies. Thus, the opinions of experts agree that it is better to go through the beginning of the construction activity together with good partners and solid sponsors who are able to support any, even a global project, or provide all possible assistance during the absence of at least some significant order.

Brigade

How to start a business from scratch in the construction industry? Need to find conscientious skilled workers. This profession is recognized as the most needed in the world.

A large enterprise with a talent pool can apply any measures to an unscrupulous employee, up to and including dismissal,without fear of anything. But a small company left without a specialist may lose an order due to missed deadlines.

Therefore, if a workable team was not assembled at the beginning of the activity, then it is not worth starting to work.

By the way, it is necessary to complete the basis of the team only from qualified workers, and then to recruit newcomers as the company expands.

Within the framework of the modern market economy, everything must be done quickly and efficiently. That is, a specialist hired yesterday should immediately begin to implement the plan.

Tougher requirements for personnel are observed due to the fact that construction is not only a responsible, but also a lengthy process. After all, the appearance of cracks or biting biting, not to mention collapses, is not an ordinary breakdown of household appliances.

Colleagues

How to start a renovation and construction business? Any competitive environment implies professional interaction - linking to the master plan, coordinating the project, connecting communications, etc. In view of this, it is necessary to notify colleagues in advance about the planned actions, about the niche found for oneself, about the sequence of work.

A sudden jump can turn into big problems, for example, a complete misunderstanding with the state structure, because development must be carried out in strict accordance with the law.

Financial part

How to open a construction business from scratch? Need to speak withinvestors and discuss initial injections with them.

The amount of investment costs is approximately 12,000,000 rubles. and includes the purchase and rental of several units of special equipment, the development of design documentation, as well as the conduct of geological and geodetic surveys. About 1,000,000 rubles will have to be spent on tools and overalls. Office rent will cost about 150,000 rubles / year. In addition, you need to think about travel and entertainment expenses - 200,000 rubles / year, as well as membership fees, promotional activities and website promotion - 100,000 rubles / year. Total initial expenses will amount to 13,450,000 rubles.

To calculate the income and payback period, you need to arm yourself with the average value of the profitability of a small construction company. In a metropolis, this figure may be 100%, but only a beginner is unlikely to be able to take root here. Subsidized hinterland is able to provide no more than 25-30%. Orders are also present here, but they require a large number of trips. The average profitability in Russia is about 60%, which results in a payback of 20 months. True, it must be borne in mind that winter time is mostly downtime.

Permits

How to start a construction business? From the decision to join the self-regulatory organization of builders. An entrepreneur who avoids this moment will have to pay a fine of at least 5,000 rubles. Each company that joins the SRO pays fees,the size of which is set by the local authorities of the region (but they are unlikely to be small). So, only the compensation fund requires 400,000 rubles. in year. Not all construction organizations are able to cope with such expenses, so semi-legal work is often preferred.

Entry into the SRO is not required for the following organizations:

• construction and repair companies, whose activities involve only the repair and decoration of premises and facades;
• construction and installation firms that install light structures: windows and doors.

How to start a construction business? From the following steps in sequence:

1. Collecting paperwork to enable construction.
2. Issuance of licenses for the design of various kinds of structures.
3. Obtaining permits for engineering surveys.

You will also need to visit Rospotrebnadzor and the Department of Emergency Situations.

What does a construction company do?

You can open a highly specialized or large format small construction business. Where to begin? Determine the range of services demanded by the population. So, a construction company can:

• build various buildings and structures, both partially and on a turnkey basis;
• do repair and installation work;
• rent machinery, equipment and construction tools;
• develop projects;
• trade constructionmaterials.

The breadth of the field of activity directly affects the number of investors needed to start.

Essential Personnel

Construction firm can't do without:

• architect or designer;
• accountant;
• HR;
• purveyor;
• foreman.

Your own lawyer will not be superfluous.

Each team must include qualified painters, plasterers, carpenters and electricians. The issuance of a state license largely depends on the availability of higher education for the main part of the company's employees.

If we are talking about a small company, it is much more appropriate to use the services of a hired accountant. The advantage lies in the absence of a monthly salary, since payment is made upon completion of work.

Where to look for orders?

You can receive an order through one of the following methods:

• Winning the tender. Please read the terms and conditions carefully before applying.
• Conclusion of an agreement with a construction company. For example, some can build walls, while others can finish.
• Become a subcontractor of a large organization - an executor of a large-scale project.

The most reliable way to become popular in the construction industry is a responsible approach to the implementation of any order. A good market reputation has never hurt anyone.