How Do I Start My Own Construction Company?

. 6 min read
How Do I Start My Own Construction Company?

Is Construction Business Profitable In India?

  • It can be very satisfying for a business owner to start a construction company.
  • However, it will call for a lot of hard work, resilience, and persistence.
  • Starting a construction firm is not easy, but if a business owner has made up his or her mind and is excited about driving it then it is worth pursuing this business.
  • In the early or later phases of market tenure, building company owners should be well prepared for all the difficulties and barriers that may occur.
  • To understand how to start a construction company in India, let us look at some principles and essential moves.

Steps For Beginning A Construction Business

Establishing A Strategic Strategy

  1. A well-drafted strategy that consists of all business specifics should be created by the business owner.
  2. The business plan should provide details relating to the purpose of the business, the venue, the cost of investment, the budget, the operating capital needed, the machinery or raw materials to be acquired, and the employees or staff.
  3. The strategy should also include resources and inventory statistics, planning strategies information, publicity and advance guidance, strategies for ads, target consumer base, etc.

Carrying Out A Detailed Study

  • To analyse the building conditions in the target venue, region, or community, company owners should also conduct a comprehensive marketplace analysis.
  • The laws and regulations regulating the start-up of a building firm differ from state to state, or from country to country.
  • The criteria for building are unique to the area and depend on the type of property, whether it is industrial or residential.
  • Some sites allow the construction of new homes or residences, some allow the construction of only commercial projects, such as retail buildings, malls, and shopping centers, and other forms of the property allow only restoration and refurbishment.

Company Registry or Legalisation

  1. The most critical role in the building industry is to legalise the company or get it registered.
  2. The building corporation must be registered with the Ministry of Corporate Affairs (MCA) as a private limited or public limited company, sole proprietorship, partnership firm, or Limited Liability Partnership under India's Company Act 2013 (LLP).
  3. The corporation owner has to receive the GST and Sales Tax identification number after obtaining the company registration certificate.
  4. TIN No, PWD Certificate, the bank account in the name of the firm, and EPF registration required are other documents to be acquired if the company wishes to hire more than 20 employees.

Network Building And Staff Recruiting

  • Owners of building firms need to cultivate healthy partnerships as well as a broad network to establish and extend their businesses with manufacturers, builders, consultants, brokers, partners, and property dealers.
  • For a company owner, these organisations are the only outlet from which he/she can extend the construction industry.
  • Owners of building firms often depend on the workforce or staff.
  • The workforce is recruited by building firms such as brokers, mediators, subcontractors, hired workers, and private contractors from the following agencies.

Contracting A Truck Fleet

  1. Logistics is an important part of the building industry and is also used at various construction sites to supply machinery and raw materials.
  2. The business owner can on a permanent or conditional basis, hire a fleet of vehicles from a transport firm to operate his/her business with a lower burden.

Insurance Coverage For The Company And Staff

  • It is often advised to insure the firm, as well as the hired employees to prevent risk and damages in the industry.
  • When covered by the employer and employers, their compensation covers injuries, injury, maintenance, worker sickness or death, and much more.
  • Company and job pay eliminates a great deal of uncertainty and anxiety from the mind of the business owner.

Funds Or Loans Sourcing

  1. Large-scale investment is required to buy and operate a building firm.
  2. Therefore, the demand for immediate cash is a given, at any time.
  3. This is needed to fulfil the needs of working capital or to control the cash flow.
  4. Company owners may apply for different forms of business loans issued by financial institutions to solve this cash crunch situation, such as term loans, working capital loans, building equipment loans, equipment financing, letters of credit, overdraft, etc.
  5. Company owners can search and compare different types of business loan products at competitive interest rates with flexible repayment terms from leading banks and NBFCs at

About the Building Industry of India

  • India's construction sector is forecast to expand to hit $738.5 billion by 2022 at a compound annual growth rate (CAGR) of 15.7 percent.
  • India's building sector accounts for 55% of the steel industry, 30% of the glass industry, and 15% of the painting industry.
  • During 2016-20, the building sector was expected to rise by 5.6%, compared to 2.9% between 2011-15.
  • You have to plan out what constitutes your target audience.
  • A large portion of the money will be needed for real estate development company land expenses.
  • You may have to scout for suitable land where people may wish to settle down and can pay the price you might be looking for.
  • People typically look at amenities when purchasing houses, such as connectivity with schools, universities, hospitals, shopping malls, etc.
  • You may choose to fund it yourself or take a bank loan when you shortlist the land and finalise the amount.
  • Today, land prices would depend on the area and the place you choose to work.
  • You will have to call the bank if you want to raise a loan.
  • They have loans worth up to 85% of the value of the ground.
  • Usually, it comes with some T&C you need to look at.
  • When people book houses or flats, most builders have a payment plan.
  • You can create your own if you want to.
  • You may also contact the Construction Loan Bank.
  • When construction is over, you will sign over the property after the deposit has been paid then pay back the bank and others.

Also Read:

How Do I Start A Scrap Business In India?

How Can I Start Spice Export Business In India?

When does a Startup Stop being a Startup and Become a Normal Company?


Q- Will I secure a home loan to construct a house?

  • Yes, you're going to get a home loan to build a building, just as you're going to get a house to buy.
  • After buying the property you intend to develop or after you buy a plot in your name, you can apply for a home loan from any leading bank.

Q- What factors should I keep in mind before starting a construction company?

  1. Communicate with your municipal leaders, the Chamber of Commerce, trade associations, and people in the business to make sure you understand the local environment.
  2. The population of the city, the demographic estimates, should also be taken into account.
  3. Having clients may take a great deal of marketing expertise.
  4. When you are employed in a business environment, the construction group or landowner maybe your client.
  5. Your client could be the bank or credit union that owns the property and wishes to re-sell it if you specialise in remodeling repossessed homes.
  6. Your client could be a municipality or other governmental agency whether you specialise in utility services or public works programs.
  7. Make sure you understand who will determine whether to bring your business or a rival to the market.

Q- What civil, trade, and regulatory requirements will I have to satisfy and comply with?

  1. Construction is a heavily regulated sector overall.
  2. Be sure that you understand the code, rules, Occupational Safety and Health Administration (OSHA) policies, standards for insurance, and regulations that you will have to comply with.
  3. Some criteria can vary from industry to industry, from state to state, or from locality to locality.

Q- What would I need to rent or purchase for cars, small appliances, and heavy equipment? What instruments or other materials do I need?

  • You will also need to decide what tools, supplies, and equipment you have, and what you will need to rent or buy, much as land and office or retail room.
  • Use this also as an opportunity to get to know the suppliers of equipment and materials in your field, as you can rely on them to get you the instruments and materials you need to fulfil your work.