Are you interested in starting a construction business? here is a complete guide to starting a construction business with no money or experience .
Ok, so we have provided you with a detailed example of a construction business plan template. We also took it a step further by analyzing and writing a sample construction business marketing plan backed by actionable guerrilla marketing ideas for the construction business. In this article, we will cover all the requirements for starting a construction business. So put on your entrepreneur hat and let’s move on.
Why start a construction business?
The construction industry can comfortably be responsible for the development of global infrastructure. The development of any country or city is made by crafts or construction companies and other stakeholders. In other words, all of the buildings, bridges, dams, roads, estates, campuses, shopping malls, airports, seaports, office complexes, skyscrapers and massive structures that you see yourself around – these are all products of the construction industry.
Starting a construction business is capital intensive simply because of the type of heavy equipment required to complete a construction project and the cost of managing a large workforce. Although the construction industry requires huge start-up capital, it is very profitable, especially if you have the experience and the ability to do quality jobs. The main clients of construction companies are governments and the private sector.
Construction giants around the world are heading to developing countries because they know they are going to get some succulent construction contracts there. Unlike advanced economies, there is a lot of construction work in developing and underdeveloped countries.
The fact that they have an infrastructure deficit means that the government must be prepared to build roads, build bridges, build public facilities (hospitals, schools, offices and estates, etc.) and build dams.
After the war, the construction industry was one of the main players contributing to the reconstruction of the country. In doing so, they are working with governments to ensure that basic infrastructure is rebuilt, and of course, this will always lead to a win-win situation for both parties. The government gets what it wants, and the construction company and contractors get good returns on the projects.
In addition, the success of a construction company depends to a large extent on its relationships with the largest customers in the industry; government of any country. There is no doubt that construction contracts are always sufficient, if the construction company is competent and well positioned, it will not have construction contracts from the government or the private sector.
Start a construction business with no money and no experience Complete guide
- Overview of the construction industry
Statisticians and experts in the construction industry estimate that around 40% of construction projects are currently fast-paced constructions, as opposed to what could have been achieved before the 21st century. India, the United States, China, Japan, France, Germany and the United Kingdom were among the countries with the highest construction volumes in their economies in 2015.
- Interesting statistics on the construction industry
In the United States, America is registered, and the construction industry generated approximately $ 960 billion in annual revenue in 2014, according to Census Bureau statistics. In 2005, there were approximately 667,000 registered construction companies in the United States, employing 1 million contractors, and the average contractor employed at least 10 people.
Overall, the construction industry employed approximately 5.8 million people in the United States of America in April 2013 and approximately 828,000 women were employed in the construction industry in 2011. The construction industry construction is undoubtedly the largest employer of the United States of America workforce and almost everyone.
The construction industry is a growing industry despite the fact that it has been around since the beginnings when people started to build the Tower of Babel. One thing is certain: the construction industry is evolving and new technologies and approaches are used to implement standard and safer construction projects.
That’s not to say the industry is oversaturated just because there are areas a construction company can specialize in, and if you’re well versed in what you do, you won’t have to fight much. to continue to attract customers.
Factors and incentives that motivate entrepreneurs to take risks in the construction industry the ability to achieve a good return on investment with minimal risk. For example, when you enter into a contract to complete a construction project, the norm is that you will be raised financially to start the project. This means that you are not expected to spend your money on a construction project.
People are also encouraged to start their own construction business because on average it is profitable to run a business / workforce, it is accepted in construction companies to only hire experts and workers temporary if they have construction projects.
We start a construction business without a money market study or feasibility studies
- Demography and psychography
The demographic and psychographic makeup of the construction industry encompasses governments at all levels and countries, the organized private sector, and people of different classes and walks of life. Below is a list of people and organizations that require the services of construction companies;
- Organized private sector (business organizations)
- Land owners
- Businessmen and women
- University campuses
- Foreign investors
- Government at all levels
- Religious centers
- Sports organizations
List of niche ideas in the construction industry that you can specialize in
Although most of the standard construction companies in the world are involved in all aspects / areas of construction, this does not mean that there are no areas of specialization in the industry. In fact, if you are just starting your own construction business, it will be to your advantage to choose a niche that you are known for.
Here are some niches in which a construction company can specialize;
- Road construction
- Construction of bridges
- Construction of dams
- Construction of airports and helipads
- Construction of seaports
- Skyscraper construction
- Construction of public facilities (hospitals, schools, stores, shopping centers, office complexes and industrial facilities, etc.)
- Construction of residential buildings / estates
- Property conversion services
- Construction and consulting services
The level of competition in the construction sector
To survive in the business world as a construction company, you need to know not only how to complete standard projects, but also how to work online. with the key people who matter; decision makers who can decide who the project is and everything.
There are undoubtedly many large investors interested in the construction industry, but one thing is for sure, there is enough space to accommodate both large construction companies and small construction companies. To survive in the industry, small construction companies need to focus on developing estates, schools, hospitals, hotels, etc., before betting on large construction contracts such as building roads, building bridges, building dams and skyscrapers, and dr.
List of well-known brands in the construction industry
Here are some of the world’s leading construction companies;
- Julius Berger
- Laing O’Rourke (United Kingdom)
- Royal BAM Group (Holland)
- Kevit (United States)
- Bouygues Construction (France))
- Balfour Beatty (United Kingdom)
- Skanska (Sweden)
- Hochtief (German)
- Bechtel (United States)
- Grupo ACS (Spanish)
- Vici (French)
- Arab entrepreneurs
Starting a construction business isn’t the same as starting a mom-and-pop business on a street corner in downtown Los Angeles; this is a really serious business, so a critical economic analysis should be done to ensure that the risks and other threats associated with starting or investing in a business are mitigated.
If you are considering starting a construction business, your concern shouldn’t be limited to buying and equipping offices or hiring the best workers in the industry; You should also be interested in how to attract investors who can receive the funds necessary for the successful implementation of projects, as well as how to provide shareholders / partners with a good return on their money.
Finally, it’s important to note that heavy construction equipment and machinery can be expensive, and a good thing about construction equipment and machinery is that it can be rented. But you have to make sure that you do a detailed economic analysis to find out what you rent or buy the appropriate construction equipment and machinery is benefiting in the short or long term.
Is a construction company worth starting from scratch or is it better to buy a franchise?
However, it is possible to buy a franchise from a construction company or even partner with a construction giant if you are considering investing in a construction company.
One thing is for sure, people are motivated to start a business based on various factors and incentives. If you want to start a business that will have more control over the business, it is best to start from scratch. But if you just want to make money and increase your wealth, you can also buy a franchise from a successful construction company that is willing to sell their franchise.
Threats and potential challenges you will face when starting a construction business
Typically, in the construction industry, established construction companies and start-up construction companies are exposed to threats from government policies, global economic downturns and unforeseen natural disasters (natural disasters (disasters) that can lead to failure).
Another threat that you are likely to face when starting your own construction business is the emergence of a large construction company in a location where your business has a strong presence.
Starting a construction business No legal problems, no money
- The best legal entity to use in the construction industry
Starting a construction business is indeed a serious business, so the legal entity you choose will largely determine how far you want the business to grow. There is no doubt that choosing a legal entity for a business such as a construction company makes sense, especially if you decide to expand your business.
When it comes to choosing a legal person for your construction business, the choice is yours. by choosing from a general partnership, a limited liability company, an LLC, a “C” corporation or an “S” corporation. It is important to make it clear that these different forms of corporate legal structure have their own advantages and disadvantages; This is why you should carefully weigh your options before deciding on the legal structure on which your construction business will be built.
Here are some of the factors to consider before choosing a legal entity for your construction business; limitation of personal liability, ease of transfer, acceptance of new owners and investor expectations and tax issues If you take the time to critically research the different entities to use in your construction business then you are ok with this limited liability company; LLC is the most appropriate. You can set up your bank as a Limited Liability Company (LLC) and turn it into a “C” or “S” corporation in the future, especially if you plan to go public.
Switching to “C” or “S” company will give you the opportunity to grow your construction business to compete with the major players in the industry; you will be able to receive capital from venture capital companies, the stock market, you will have a separate tax structure and you can easily transfer ownership of the business; you will have flexibility in ownership and in your management structures.
Eye-catching business name ideas suitable for construction companies
When it comes to choosing a name for your construction business, there are no hard and fast rules to follow. This is because construction companies are not like other businesses that hope their name can help them attract passers-by who may just want to keep busy. deals.
Here are some catchy business name ideas that you can choose for your construction business;
- Shannon Berg Construction Company
- Kings Contractors
- ITW Group
- Jewish entrepreneurs
- Dell Civil Engineering API
- Daniel and Davidson Group
The best insurance needed for a construction company
c In the United States, and of course most countries around the world, you cannot do business without some of the basic insurance policies required by the industry in which you want to work. Additionally, the nature of the construction industry requires you to have proper insurance coverage otherwise you will be forced to go out of business if any of your projects fail or fail. Therefore, it is important to budget for insurance and possibly consult an insurance broker who can help you choose the best insurance policies for your construction business.
Here are some of the top insurance coverages to consider when buying if you want to start your own construction business in the United States of America;
- General insurance
- Health insurance
- Risk insurance
- Payment protection insurance
- Liability insurance
- Workers compensation
- General expense insurance for disability expenses
- group insurance for business owners
Does a construction company need intellectual property protection?
The nature of the construction industry does not in any way guarantee that you should seek intellectual property protection if you wish to start your own construction business; this is optional.
However, the only reason you want to protect your intellectual property may be to protect some important documents of your business and possibly your company logo. Additionally, you can successfully run a construction business without intellectual property protection.
Do you need professional certification to start a construction business?
The construction industry is one of the industries highly regulated to prevent unsuccessful construction projects. For example, damage from destroyed bridges or a collapsed stadium is unimaginable, so it is imperative that major builders receive certification to prove that they are indeed inspected. and trustworthy.
Here are some of the professional certifications that you or your key employees must obtain;
- Certified Construction Manager (CCM)
- Gold seal certification
- Certificates from the National Association of Security Professionals
- Certified Specialist in Construction Industry Finance (CCIFP)
List of legal documents required to run a construction company
In the United States of America and of course around the world, the construction industry is one of the industries most regulated to avoid failed construction projects. If you are planning to start a construction business, you must comply with the legal requirements as stipulated by the constitution of your country.
Here are some of the basic legal documents that you should have with you if you want to start a construction business in the United States of America;
- Registration certificate
- Business license
- Business plan
- Non-disclosure agreement
- Memorandum of Understanding (MoU)
- Employment contract (letters with proposals)
- Operating agreement
- Company charter
- Operating Agreement for LLC
- Insurance policy
Writing a business plan for a construction company
If you are looking to start a construction business, one of the first steps is to consult with experts to help you write a good, achievable business plan. The truth is that in order to successfully run a construction business, you need to have a good business plan.
A business plan is a preliminary outline required for a successful business; Having a workable business plan will help you reduce the trial and error approach to doing business. You will be able to run your business with purpose and possibly with precision; You will know what to do at all times and how to deal with challenges and growth.
So, if you want to start your own construction business, you need to write a detailed construction business plan that can pass the test of reality when submitted; You have to work with facts, figures and other measures in the construction industry, as this applies to the country in which you intend to start a business.
The whole idea of writing a business plan is not just to have a business document in place; but a detailed guide on how to effectively run your business from scratch. Your business plan should describe and describe the management and growth strategies of your construction business.
A rule of thumb when writing a business plan is to do your best to be realistic and never overdo the project. when calculating income and profit, etc.
These are the key areas to cover in your business plan;
- Company CV and Descriptions : You should write about your business concept, descriptions of your company, a statement about your company, your company’s mission and location, as well as whether you intend to sell a franchise or to open outlets in different cities The United States of America and other parts of the world.
- Other key elements that should not be missing from your business plan are product offering, SWOT analysis, competitive analysis, marketing and marketing analysis / sales strategies, target market, business objectives. market, prices, costs and financial forecasts, advertising advertising strategy, expansion and growth strategies, budgeting and initial capital formation, etc.
Detailed analysis of the costs of starting a construction business
There are a number of expenses that you will need to make before successfully starting your own construction business. It is important to note that the location you choose to start your business will definitely affect the overall cost of starting a business, so it is very important to prepare and analyze your feasibility studies and market research before proceeding. budget and find sources. to finance your business.
Here are some of the top costs to consider when starting a construction business in the United States of America;
- The total fee for registering a business in the United States of America is $ 750.
- Budget for insurance, permits and licenses $ 10,000
- Amount required to purchase a suitable property with sufficient space in the United States of America (facility reconstruction included) $ 500,000.
- The cost of office equipment (computers, printers, fax machines, furniture, telephones, filing cabinets, security devices and electronics, etc.) $ 15,000
- Cost of purchasing heavy construction equipment $ 2,000,000
- Website launch costs $ 700
- Additional costs (business cards, signs, advertisements and promotions, etc.) $ 5,000
- Working capital (investment fund)) $ 3,000,000 ($ 3 million)
Based on our research and feasibility report, we would need around $ 7 million ($ 7 million) to start a mid-size construction company in the United States of America.
On average, you will need around $ 1 million to start a small construction business, especially if you lease most of your construction equipment and machinery. If you decide to start a large construction business, you should consider a budget of around $ 10 million or more. This money includes payment for expert services to be included in your employee / payroll.
- Finance your construction business
If you decide to start up If you are starting a small business, you may not need a lot of money to start a business, but if you decide to start on a large scale, you will definitely need to raise the start-up capital that you need. you need to start a business.
If you are starting your large-scale construction business, you will need decent office space, office equipment and furniture, as well as funds allocated from the budget for salaries and utilities, for at least 3 months. and you will also need tons of cash to buy standard construction equipment and machinery. Basically, you have to generate your start-up capital.
When it comes to financing a business, one of the first and perhaps the most important factors to consider is writing a good business plan. If you have an effective and achievable business plan, you might not have to work hard before convincing your bank, investors, and friends to invest in your business.
Here are some of the options you can explore when looking for start-up capital for your construction business;
- collect money from personal savings and sell personal stocks and property
- raise funds from investors and business partners
- Apply for a loan from your bank / banks
- Transfer your business idea and apply for business grants and seed funding from donor organizations and angel investors
- Source of loans on favorable terms from your family. members and your friends.
Choosing a location for your construction business
Choosing a location for your business is not something you should do without proper consultation, the truth is, if you are wrong about where you have decided to dismantle your business, you will likely struggle to be successful. … One of the main reasons a business struggles, fails and ends up shutting down; The point is, the owners decided to pick the wrong location for the business.
However, if you can successfully build a successful construction business brand, you can crush your business anywhere in the world while still being successful. bankrupt. But if you are just starting out; especially if you are new to the construction industry it is important that you locate your business in an area where there is still a lot of construction going on. This may help you reduce your advertising and promotion costs. If you decide to pitch your tent in a bustling business district of a big city, you need to be prepared for networking, advertising, and marketing.
Handling of technical staff in the construction sector
You should also make sure that you have the required software applications. You will need design / civil engineering software applications such as Computer Aided Design (CAD) application, Auto Cad and other related software applications (payroll software, accounting software) software, CRM software, etc. .).
When This Happens When it comes to the workforce, of course, you shouldn’t start building a business without taking on some key roles with trained and qualified staff. Ideally, if you want to start a standard construction business, you should consider the following roles in your organization:
- CEO (president)
- Project manager, civil engineer
- Civil engineer
- Land surveyor
- Lawyer / company secretary
- Administrator and HR manager
- Business Developer
In construction companies, it is customary to hire employees on a contractual basis. like construction workers.
When it comes to choosing between renting or renting a facility for your office, you should be guided by your business plan and your long and short term business goals. If you have enough cash, you should consider renting a property, but if not, renting a property is not a bad deal to start your construction business.
On average, you will need about ten full-time employees to start a construction business without ignoring the fact that you have to plan for temporary workers.
Manufacturing process involved in the construction industry
Typically, the process involved in the construction industry begins with entering into a construction contract; sign the necessary legal documents. Once the contractual documents have been signed and the contract / project mobilization costs have been paid, all the experts / engineers will mobilize to carry out the construction / project work as agreed.
If you want to make sure that you start and finish the construction work on time, you have to work on perfecting the plans to get everything you need to get the job done on time. Remember that you will need sand, rods, cement, blocks, and other building materials.
Starting a construction business marketing plan
- Marketing ideas and strategies for the construction industry
A construction company is not what you need to retail products, so you should do whatever you can to maximize any opportunities that come your way, because in the construction industry your job previous is your primary marketing tool.
So, when developing marketing ideas and strategies for your construction business, make sure you create a compelling personal and business profile that should include the profile of your board of directors and management team. The truth is, if you have a highly skilled, trustworthy, and successful professional on your board and core management team, you can get market leverage.
Here are some of the platforms you can use to market. Your construction company;
- Promote your business in relevant business magazines and become available for construction talk shows and interactive sessions on TV and radio.
- List your business in local directories / Yellow Pages (online and offline)
- Attend exhibitions, seminars and trade shows, etc.
- Use online resources to promote your business
- Join local chambers of commerce around you for the primary purpose of networking and marketing your construction business.
- Introduce our business by sending cover letters along with our brochure to all businesses and government agencies in your target area.
- Effectiveness of tendering for contracts
- Create different packages for different categories of clients in order to work with their budgets and provide them with quality housing / real estate
Possible competitive strategies to win over your competition in the construction industry
It can be difficult to compete as a newcomer to the construction industry, especially in a highly organized market like the United States of America, so you need to be careful when choosing your board members. administration and your senior management team.
If you are a construction company, if you know that they provide standard and world class building, you are not going to have a hard time competing in the industry. The truth is that your main marketing tool as a construction company is the projects you have done in the past; your finished project should speak for you.
So be sure to do your best when you have the opportunity to tackle any project. You must be known for providing world class structures. Creativity, excellence and the on-time completion of construction projects must be our signature.
Finally, perform a wide range of construction work; jobs ranging from building estates and skyscrapers to building bridges and airports and more will be seen as a competitive advantage for your business.
Possible ways to increase customer loyalty for the construction industry
In the construction industry, you must comply with established standards when doing the construction work you manage, therefore the minimum you can do is comply with industry standards. Therefore, as a construction company, you should do everything in your power to retain your customers, especially when you are able to secure important customers like the government.
The truth is, if a business is able to achieve over 60% retention, it will surely experience huge revenue, and such a business can easily be classified as a healthy business. You just need to refine your plans to improve the customer experience every now and then in order to retain them and continue to contract with them or get referrals from them.
Above and above, if you want to increase customer loyalty for your construction business, you need to make sure to do standard construction projects for our customers, you should always get feedback from your customers and make sure that you are working within your clients’ stated budget. and also deliver all projects within the agreed time frame.
Strategies to promote your building brand and create a corporate identity
When it comes to building a brand image for the construction company, your construction projects should be your number one brand ambassador, which is why we need to deliver world class projects consistently. Make sure to work with your consultants to help you define advertising and promotional strategies that will help you penetrate the heart of your target market.
First of all, you need to make sure that your brand is visible and communicates well, so you should consider working with different categories of people in the company. All of your promotional and promotional material should be done by some of the best people in the business.
Below are the platforms you should rely on to increase your brand awareness and create a corporate identity for your construction business;
- Introduce your business by sending cover letters along with our brochure to all businesses and government agencies in your target area
- Promote your business in real estate magazines and websites
- Submit your business to local directories / yellow pages (online and offline)
- Promote our business on satellite TV channels and radios.
- Attend exhibitions, seminars and trade shows, and more.
- Get involved in direct mail marketing
- Use the Internet (social media platforms and your official websites) to promote your business
- Make sure your employees wear your branded shirts at all times during office hours, and also make sure to label all of your company’s official vans, trucks and cars, etc.
Build a network of suppliers / distributors for your construction business
If you are running a construction company then it will be your advantage to network and use the services of the major suppliers of construction materials in the area where you work. You don’t have to go to the market to start buying building materials when you’re about to start building a project, all you have to do is make a phone call or two and you’ll receive construction materials on construction sites. …
You are not going to achieve it overnight; you need to network and establish business relationships with stakeholders in the construction industry value chain. The truth is, you stand a chance of getting a cheaper supply of building materials if you can build strong relationships with your suppliers.
Tips for running a successful construction business
The truth is, no matter what type of business you run, you can see all of your team members on one page at all times. it is one of the keys to the success of the management of an organization.
As the CEO or president of a construction company, you are responsible for the direction of the company. Part of what you need to do is make sure you have time for office meetings; when problems, feedback, forecasts and topical issues are discussed. Meetings can take place daily, once a week, twice a week, or once a month. The bottom line is that your organization should have regular meetings.
Regular assessments and training of your employees will help you manage your organization effectively. Encourage your employees to obtain certifications in their different areas of specialization; this will help your organization’s profile and of course help individuals. You can sponsor some of the certifications in whole or in part.
Finally, you need to keep your doors open to suggestions from your team members and clients. It is very important to reward the excellent performance of your organization; this will go a long way in encouraging healthy competition in your organization.