The construction business industry is constantly facing changing processes that have allowed it to consolidate itself as one of the strongest in the economy. These processes involve housing projects and construction of public establishments, as well as engineering works and industrial facilities. Today, creating a construction company is to entering a dynamic sector in constant evolution. This is confirmed by figures from Oxford Economics. They predict that the industry will have a growth of 3.9% per year by 2030. Future reaching a figure of 15.5 billion dollars per year.
With the above, it is clear that this is a business with very high chances of success and profitability. For this reason, in this article, we share information on how to set up a construction company and we will provide a guide on key steps to undertake in this millionaire market.
Knowing how to create a construction company implies understanding the operation of the sector and the business itself. In the first step, there are 3 main categories within the industry: building works, civil works, and industrial works.
The first refers to the construction of houses, residential and non-residential buildings, and public buildings. The second is related to civil works such as bridges, highways, airports, and ports. And the third, of industrial works such as the assembly of equipment and processing plants.
All of them can be public or private, depending on the entity or company that invests in the projects. Then, there are the construction companies that are in charge of managing these projects through construction contracts. These contracts contemplate the term of execution, the arbitration clauses between the construction company and the investment company, and the budget. Keep in mind that each project is different, so the contractual terms may vary depending on the nature of the work.
The work process in the industry is divided into four stages
- Project: The objectives of the work are determined and feasibility studies are carried out.
- Design: Evaluation of the land and architectural, structural, and facilities design.
- Construction: Obtaining permits, planning and programming of the work, preparation of the budget, description of the work, and execution methodology.
- Start-up: Evaluation of the quality of the work through periodic controls.
The last two stages are the entire responsibility of the construction company.
Now that you are clear about the general operation of the business, it is time to talk about how to set up a construction company. Next, we will see a series of basic steps to start this business.
The first step in creating a construction company is to develop a business plan that is the basis for action for the development and start-up of the enterprise. Here the objectives of your business and the activities that you will carry out to achieve them will be recorded. Within this plan you must include the following sections:
Description of the business idea: Business details such as name, mission, vision, objectives, and values are specified; as well as its competitive advantages and the benefits that it will bring to the partners.
Analysis of the environment: It includes a study of the legal, economic, social, and ecological factors present in the reality that the business faces. As well as an analysis of the behavior of the sector, the competition, and the target audience.
Marketing plan: Marketing objectives are defined based on the general objectives initially set. Then, the promotion and advertising strategies to achieve them are listed.
Financial plan: Contains the business’s financial structure according to previous studies and research. The investment budget and maintenance costs are established and the economic viability of the idea is projected.
In this step, the requirements to create a construction company are contemplated, which change depending on the country. Therefore, you must seek advice from the entities in charge of regulating these procedures. However, there are many requirements in common to legally register a new company.
- Define the legal structure: This can be a natural or legal person (stock company, simplified, by shares, etc.).
- Reserve the name: Verify that the name of the business is available and reserve it.
- Prepare the minute of the constitution and/or public deed: This must be signed by all the partners and certified by a lawyer at a notary’s office.
- Choose a legal representative.
- Specify the economic activity.
- Carry out the registration in the Trade Registry.
Creating a construction company implies being governed by certain parameters, legislation, or special regulations according to its economic activity. Well, here there is an affectation of the soil and the environment. Such is the case of the Territorial Ordering Plan (POT). This is one of the documents that a construction company must have in mind to carry out its activity.
Through this, the criteria, policies, programs, and regulations are specified to direct and manage the development of the territories and their soils. That is why it is an instrument of vital knowledge to guide the work of all construction companies.
Regarding licenses, these will also depend on the location of the construction company. Generally, the following must be managed and obtained:
- Construction license (new construction, extension, reform, restoration, demolition, etc.)
- Municipal or departmental
- health license
- Land use license
- environmental or ecological
Another essential step to creating a construction company is the search and selection of suppliers. Here you will have to make alliances with companies that provide you with certain products and services necessary for the operation of your business. Ideally, according to the activity of your company, you classify suppliers according to your needs. We recommend doing it as follows:
- Cement factories.
- Final cleaning companies on site.
- Plumbing companies.
- Sand dealers.
- Rental of specialized construction machinery (mixers, excavators, water pumps, concrete trowels, etc.).
- Wholesaler of materials, tools, and equipment (plaster, bricks, steel, glass, drills, saws, scaffolding, etc.).
- You may be interested: Successful construction businesses
Setting up a construction company also requires locating the business center in a strategic location. The idea is that you choose a place, whether local or office, that is easily accessible to customers, both by public transport and by private vehicle. And that in turn, be a safe area with all hygiene conditions. In addition, it is important that in the surroundings it is feasible to find related parking services, shopping centers, banks, law offices, and notaries.
Regarding the office, it must have enough space to accommodate the reception and waiting room, as well as a meeting room and a bathroom. In addition to this, it is suggested to have at least two independent spaces that function as offices for the administrator and the accountant.
As for the supplies that you should consider, these include computers, audiovisual equipment, printers, cubicles, desks, chairs, and tables. In addition to the decorative and setting elements that you include to give it the differential touch, do not forget that this space must have access to electricity, aqueduct, telephone, and internet services.
Questioning yourself about how to create a construction company means thinking about the staff and workforce to hire. Generally, these types of companies work by work or project, so they tend to have a high staff turnover.
That is, they present a constant movement in the entry and exit of workers since there are also changing requirements for labor in different specialties. However, there is also room for permanent jobs, which are those related to the company’s organizational structure.
In that order of ideas, the personnel required especially for construction work on site are:
- Machine operators
On the other hand, some of the fixed charges in the company are:
- Executive Director
- Project manager
- Project coordinator
- HR director
- Marketing staff: sales and marketing
The last step in the process to create a construction company is to execute the marketing plan contained in the business plan to promote the company. This is to generate sales, attract potential customers, retain buyers and position the business.
Implementing traditional marketing tactics such as BTL, ATL, print advertising, radio spots, or merchandising is possible. Similarly, digital marketing techniques such as SEO and SEM positioning, content marketing, and video marketing. Not forgetting email marketing and social media advertising.
Keep in mind that everything has to focus on the needs of the target audience and be based on previous research. In addition, the marketing plan must be executed before, during, and after the start-up of the business, since its results will be seen in the medium term.