With the rising urban planning and expansion in India, construction businesses are earning enormous business potential. A construction company can reap tremendous earnings and grow a thriving business.
Even a mid-scale construction business makes a revenue of crores in a year. However, deciding to begin your own construction company can be an overwhelming but challenging experience.
Also, with so much analysis, recording, business loan online procedure, and paperwork to complete, it is obvious to get lost in the organisational aspects and overlook the passion that motivated you to start your own construction business.
However, with sound industry knowledge and business planning, you can effortlessly open your construction company in India and start earning profits right from the first year.
Tips for beginning a construction company in India
The construction sector witnessed a steady positive growth trend from the past few years, with around a 5.6% rise between 2016 to 2020. Given this significant positive trajectory of the construction industry, many people find it a lucrative business opportunity for the upcoming years.
Even though the construction industry seems to be brimming with capital opportunities and employment, it still contains a generous share of impediments for steady operation.
That is why any person who chooses to kickstart their own construction business should follow the tips mentioned below:
1. Research the construction market thoroughly
The initial step towards starting any company is doing a meticulous analysis of the industry.
Thorough market research will assist you in understanding more about this business, the services required, abilities, marketing plans, and many more. This knowledge will be pretty crucial in starting and building your business.
Also, construction businesses can be of different varieties like commercial, residential, industrial, and consultants. All these companies remain connected to the construction industry but provide entirely diverse assistance.
For instance, consultant businesses only assist in devising and planning the construction, but civil construction firms look after the project’s concrete structure. All these diverse assistance need varying expertise levels, and you will discover about them through thorough research.
In addition, careful research will aid you in understanding the distinct specifications within the industry. It likewise helps you remain up to date with modern technological trends and innovative business ideas and help you grow your business better.
2. Draft your business model
Once you have performed your analysis, you must begin drafting your construction business plan. A business model is a distinct business strategy that outlines your business.
It notes down the services granted by your company, your objectives, specialisations, and many more.
Also, after thorough research, drafting a business model will become effortless. You now solely have to pick between the sort of business you want to begin and how you intend to go about it.
Your business model should likewise incorporate the scale at which you need to start your construction business.
It involves defining your capital and financing requirements. A good business strategy will be crucial to get an instant business loan or onboard investors.
In addition, since your business strategy includes short and long-term goals, it will assist in creating a distinct path for your business and the actions required to take to accomplish those goals.
3. Ensure legal compliance
Legal compliance is vital before starting a construction company in India. Also, any falsity in compliance can point to economic damages and harm your reputation or lead to the closure of your business.
Consulting a solicitor is essential to meeting all the legal obligations. Some of the fundamental necessities for commencing a construction business are:
- Business Registration: Whether you are a sole proprietor or a company, getting your business registered with the Ministry of Corporate Affairs (MCA) is required. Even when this registration is not a compulsory process if, the annual business turnover remains below a set limit), registering your business holds numerous tax benefits. Therefore, registering your construction business can be advantageous, and you can readily complete the registration process online on the MCA website.
- GST registration: To claim input credit and business expenses on raw materials, having a Goods and Services Tax (GST) registration for your company is compulsory. Even for obtaining raw materials and collecting payments, possessing a GST registration is a must.
- Trademark: Creating your brand status is crucial for any company. Trademark certification warrants that your brand name and logo never get copied by your rivals. While obtaining trademark registration is not compulsory, it is advantageous to create a brand identity.
- Licenses: Depending on the type of your construction company, you will need to collect specific permissions before beginning your business. These vary from business to business and often even state to state. Hence, it is best to discuss this process with an expert.
4. Plan your investments
Starting your construction business might require investing some funds. While you can choose the scale of your company and expand/limit your investments, it is better to look for avenues for investment right from the beginning. The two principal ways to obtain investment are:
- Loans: Banks or financial institutions present loans for running a construction business. Nowadays, there are business loan facilities available for startups and small businesses. Hence if you wish to avail the loan facility to kickstart your business, you can consider the loan option.
- Investors: You can likewise pitch your construction business plans to investors who invest money into your business. Business incubators, Crowdfunding platforms, personal networks, and many more such options will help you get an investor who can fund your business to get some stake or certain profit ratio from your construction company.
To sum up, we can say that starting a construction business in India needs lots of expertise and knowledge. While this might initially seem intimidating, you can develop a successful business by following the steps above.
A structured and well-planned construction business can grow into an influential lucrative business with consistent efforts.
If you are looking for a reputable business loan provider in Delhi or anywhere in India, Ziploan can be your perfect partner. Here you can get the instant MSME and small business loan at the most affordable interest rate.